On 31 October 2014, the Coalition’s Carbon Farming Initiative Amendment Bill 2014 (CFIA Bill) was passed through the Senate. The CFIA Bill as passed contains various amendments proposed by key members of the Senate to the Coalition’s Direct Action Plan (DAP), of which the Emissions Reduction Fund (ERF) is a key component.

A summary of the main elements of the CFIA Bill prior to amendment can be found here.

In order to pass the CFIA Bill, the Coalition needed the support of the Australian Labor Party (ALP), the Greens, members of the Palmer United Party (PUP) or the other cross-benchers. As the architect of the Carbon Tax, which was replaced with the DAP, the ALP was not in favour of repealing its own system to reduce greenhouse gas emissions. The ALP also raised questions regarding the cost and efficacy of the DAP as a substitute for the Carbon Tax. Similarly the Greens did not support the DAP. Therefore, passage of the DAP through Parliament ultimately depended upon support of members of the PUP and the independent cross-benchers, including Senator Nick Xenophon.

To gain the support of the PUP and Nick Xenophon, the Coalition agreed to amend the CFIA Bill and/or change its policy position. The main concessions made by the Government dealt with the following issues:

  • the safeguard mechanism, including penalties for non-compliance with the mechanism
  • international carbon credits and strategic reserves
  • crediting and contract periods
  • the Climate Change Authority
  • the prospect of a future emissions trading scheme

A summary of key amendments are listed in the table below, which identifies:

  • the original position of the Coalition Government and/or original provisions in the CFIA Bill as contained in the Exposure Draft of the Bill
  • amendments required by PUP and/or Senator Xenophon
  • final position of the Coalition Government and/or provisions of the CFIA Bill passed by the Senate.

Click here to view table.