Financial incentives for businesses to reduce their carbon emissions

Overview

The Emissions Reduction Fund (ERF) incentivises Australian businesses to cut the amount of greenhouse gases they create and to undertake activities that store carbon.

This can be through projects involving:

• new technology
• upgrading equipment
• changing business practices to improve productivity or energy use
• changing the way vegetation is managed to store more carbon.

Eligible projects include those associated with:

• vegetation management
• agriculture
• energy consumption
• waste
• transport
• coal and gas production
• industrial processes.

Participants in the scheme can earn Australian carbon credit units (ACCUs) for every tonne of carbon dioxide equivalent they store or avoid emitting. ACCUs can be sold and can generate participants an income.

To ensure emissions reductions aren't displaced by a rise in emissions elsewhere in the economy, the Emissions Reduction Fund includes a safeguard mechanism, which encourages large businesses to keep their emissions within historical levels.

Check if you can apply

Participation in the Emissions Reduction Fund is open to individuals, sole traders, companies, local, state and territory government bodies and trusts.

Emissions Reduction Fund projects must:

• be new
• go beyond business-as-usual activities
• not be required by law
• not be receiving financial support from specified government programs, such as the New South Wales and Victorian energy efficiency schemes
• follow an approved method, which sets out the rules for running the project and estimating emissions reductions
• not be an excluded activity listed in the Carbon Credits (Carbon Farming Initiative) Regulations 2011 under regulation 3.36 in Division 3.12