ERF: A case of revenue model that rewards sustainable business practices

The Emissions Reduction Fund (ERF) provides incentives for emission reduction activities across the Australian economy. The Government has committed to reduce Australia’s emissions to five percent below 2000 levels by 2020. Carbon farming initiatives are an important aspect of this fund.

How does it work?

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Four steps to participate in the ERF:

(1)   Apply to become ERF participant and register your emission reduction project to receive Australian Carbon Credit Units (ACCUs – 1 per tonne of CO2-equivalent)

(2)   Contracts and auctions: Bid for a contract to sell your ACCUs to the Clean Energy Regulator (governmental market). The Clean Energy Regulator will run auctions to select bidders according to the price. Another possibility is to sell the ACCUs to the secondary market:

    • Help others fulfil their ERF contracts. Some of the Carbon Agents and/or project proponents, who have ERF contracts to fulfil, may, for reasons beyond their control, have need to buy extra Credits to cover a contract.
    • Go Direct to a Polluter.
    • Direct Selling via the website

(3)   Reporting and auditing: To receive ACCUs, submit reports on your registered projects, including reporting on your emission reductions. You will also need your project to be audited on a regular schedule.

(4)   Participants who have a contract with the Clean Energy Regulator will deliver Australian carbon credit units according to the schedule in their contract, and will then be paid at the price bid in the auction and set out in the contract.