10 June 2014
How Food Manufacturers can gain from the Government’s proposed Emissions Reduction Fund
Wiley has been keeping a keen eye on opportunities for the food industry from the Australian Government’s proposed new $2.55 billion Emissions Reduction Fund and, now that the Fund is outlined in draft legislation, we have a much clearer idea of how our industry might benefit.
The Emissions Reduction Fund (ERF) is the centrepiece of the Government’s Direct Action Plan to abolish the carbon tax and reduce Australia’s greenhouse gas emissions by 5 per cent below 2000 levels by 2020. It has been developed with several rounds of community and business consultation, which concluded in May.
The ERF at a glance
How to secure the money
Under the draft legislation, which is due to go to Parliament in the upcoming winter sittings, the ERF would work like this:
The crediting and purchasing elements of the ERF would only start once the carbon tax has been repealed. (One of the government’s repeal bills is before the Senate and the government intends to re-introduce its others.)
So what does the ERF mean for you?
The Government says it’s designing the ERF to make it easy to participate. The concept is to encourage participation from large businesses covered under the National Greenhouse and Energy Reporting Scheme, as well as proponents in the waste, transport, building energy efficiency, and land sectors.
Initially there will be 30 emissions reduction methods allowable under the ERF. They’ll be of two types:
The methods will be broad rather than applicable to specific projects so that project developers can apply them to a wide variety of projects and be innovative in project design.
Technical working groups are presently developing suitable methods so that participants can hit the ground running as soon as the ERF is operational. Some of the methods they’re working on that are relevant to our industry include:
Industry energy efficiency
Building energy efficiency
Methods under the Carbon Farming Initiative (emissions avoidance methodologies)
Wiley’s Process Engineering Director, Steve Christie, sees plenty of opportunities for the food processing industry in the new ERF but advises companies to look more at productivity gains than energy efficiency.
“The real money and the real benefit would be in pursuing productivity gains because the value to the manufacturer of productivity gains far outweighs the value of the carbon credit.
“Projects under the previous government’s Clean Technology Investment Program tended to focus on energy, while only a few focused on productivity. But those that did look at productivity, such as amalgamating plants, also saved energy because they were putting through more units for the same amount of energy used”, he said.
“If you make productivity your focus, everyone wins. If you can fill up your conveyor and put more product through, you save energy and make more product.
“The scheme will credit reductions in emissions per unit of output. So I’d be looking past energy-specific projects to productivity projects because the prize is bigger”, he said.
Wiley can help you to structure your projects to access the new ERF and welcomes enquiries before the ERF starts.
“Wiley is one of the few companies specialising in both energy and productivity. It’s a tricky area and few companies are equipped to do it, but we certainly are”, Steve said.