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The Emissions Reduction Fund (ERF) is an Australian Government initiative established to support Australian business, land managers and communities undertaking activities which reduce or avoid greenhouse gas emissions. The ERF aims to ensure that Australia meets its national emissions reduction targets. To date (1 March 2016), the Government has provided 22.55 billion to establish the ERF and is considering further funding in the future.

How Does it Work?

The ERF incentivises Australian businesses, communities and land managers to adopt more effective practices and technologies to reduce greenhouse gas emissions.

Through the Fund, Australian businesses, communities and land managers can propose new projects using emissions reduction methods covering all sectors of the economy.  These projects will include activities such as improving energy efficiency, capturing methane from landfills and storing carbon in forests and soils.

The ERF’s incentive-based approach supports Australian businesses to reduce energy costs and increase productivity while simultaneously reducing our greenhouse gas contributions. 

A large number of emissions reduction activities deliver valuable benefits not just for businesses but also for farmers and the community. The ERF is designed to provide these benefits and address climate change – a win for the environment, Australian farmers, households, and businesses.   

Safeguard mechanism

The safeguard mechanism due to commence on 1 July 2016 ensures that significant increases in emissions elsewhere in the Australian economy doesn’t offset emissions reductions paid for through the ERF. 

AusIndustry’s Involvement

The Department of Industry, Innovation and Science provides a project facilitation service through AusIndustry. This service includes raising awareness of the Emissions Reduction Fund and assisting businesses, land managers and communities to develop and submit eligible proposals to auction.

In particular AusIndustry will:

  • Provide information on the application process;
  • Provide guidance on eligible project opportunities;
  • Help applicants to demonstrate project eligibility;
  • Assist applicants in identifying the appropriate method to suit their project; and
  • Review draft submissions and ensure applicants have the appropriate level of evidence required.

Key Takeaways

The Australian government has many initiatives in place aimed at supporting SMEs. If your SME is undertaking activities which reduce or avoid greenhouse gas emissions, then the Emissions Reduction Fund could be relevant to you. If you have any questions or need further information on what initiatives are in place for your SME, let our startup lawyers know on 1300 544 755. 


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