Dr WOODRUFF – Minister, the significant increase in forest valuation is a result of your so-called carbon mandate. This is part of the underlying budget, the way that you’ve managed to smoke and mirrors make it look as though Forestry Tasmania is making money. It’s a carbon mandate that you said to manage forest for carbon sequestration, which the Greens obviously support. We’ve always said that our forests are worth more standing. We’re glad that you have irrefutable evidence of the type that you agree with it. There are a range of questions and concerns about Australian Carbon Credit Unit (ACCU) notwithstanding there’s clearly a future in managing Tasmania’s forest for carbon. Are you going to shift to this model away from the logging and burning of forests, which are terrible for the climate?
Mr ELLIS – Thanks, Dr Woodruff. We use carbon as part of a mixed strategy because the opportunities that carbon represent, being an incredible carbon sequestering medium is very exciting and the opportunity to produce more timber and do evaluating and receive carbon payments is very attractive. Certainly, it was in my first dint as Forestry minister, an area that I was very pleased to contribute to. In response to STT’s business case to participate in carbon markets, the government updated and modernised STT’s ministerial charter in 2024 to account for emerging opportunities in areas such as carbon.
The Australian Government Clean Energy Regulator (CER) administers the Australian Carbon Credit Unit scheme (ACCU scheme). To date, STT has five plantation forest projects registered with CER and two in development and has accumulated 36,165 ACCUs. Based on the current ACCU spot price value, this equates to over $1.3 million. Now, the private sector in Tasmania has over 100 projects registered with the CER and often that is in a blended timber production and carbon or ACCU production process. Certainly, $1.3 million is good. It’s a small margin compared to the value of the timber products that we produce.
I suppose it makes the overall point that we manage our forest for mixed-use and that delivers the best outcome as part of the reason why we’ve been able to generate a profit again this year with STT.
Dr WOODRUFF – Thank you, minister. It’s an interesting situation where on the one hand, from what you just said, you recognise the value of sequestering carbon and at the other you’re actually destroying the carbon and the potential for sequestering from ancient forests which cannot be regrown in our lifetimes, unlike plantation timber.
What are your projections for Tasmania’s native wood and native forests? Are you planning on moving more in this direction? Could you talk about any conversations, negotiations you’ve been having at the federal level about ACCUs?
Mr ELLIS – Thanks, Dr Woodruff. I’ll make a couple of points. First, these are plantation schemes, so that’s important to note. Second, harvesting doesn’t destroy carbon. If you look all around this room, there is carbon that’s sequestered in the timber products all around us. It’s not destroyed.
Dr WOODRUFF – Seventy per cent of it doesn’t leave the floor; it gets burnt. So, it doesn’t. About 1 per cent turns up into timber like this, of everything that gets taken out by Forestry Tasmania.
Mr ELLIS – Thanks, Dr Woodruff. Of course, there’s a whole range of different areas where carbon is stored through products and even some of the lowest value products.
We were speaking with Ms Badger, your colleague, before about the exciting opportunities to displace some coal usage at the Railton Cement Australia facility by using forest residues and that’s really encouraging because again –
Dr WOODRUFF – We’re back to the federal schemes. Have you had any negotiations? Are you in discussions? Do you have any plans in terms of carbon credits for forests?
Mr ELLIS – Thanks, Dr Woodruff. There’s currently no Australian Carbon Credit Unit (ACCU) method that recognises carbon stored in managed native forestry. In 2024 CRE ran a proponent-led expression of interest process for new methods, including improvements to existing methods to broaden the applicability of the ACCU scheme. Two key proposals relating to native forestry were considered, the Improved Native Forest Management (INFM) method and the Enhancing Native Forest Resilience (ENFR) method. The INFM submitted by the New South Wales Government, Department of Climate Change, Energy, the Environment and Water was prioritised for development, noting the ENFR method required for the development.
The INFM offers conservation and carbon revenue opportunities but PDPZ is not suitable at ceasing or deferring. Harvesting actually conflicts with STT’s wood supply responsibilities and the overall benefit that that would provide to our communities. The ENFR provides a more balanced approach, integrating carbon goals with ongoing timber supply, making it more suitable for Tasmania’s industry and policy objectives.
A core requirement of any ACCU method is additionality and that is admissions reduction or carbon sequestration from a project above and beyond what would occur under business as usual conditions, meaning they’re not legally required, not already common practice and only happen because of the ACCU incentive. The principle of additionality does need to be carefully considered in this context of these methods as they’re being developed. Participation in the ACCU scheme is voluntary. Businesses can develop their own abatement projects and decide which methods to use.
