Kate Lundy (ACT, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

Thanks, Senator Colbeck. The carbon price will provide incentives for biomass because it will be zero rated. I have some additional information here on a complementary related policy, the RET. The RET rules will protect native forests but allow for biomass to be used as an energy source. This is because the use of biomass for electricity generation or heat energy will not attract any liability under the carbon price—as I mentioned, it is zero rated—which will provide a competitive advantage to all power stations which use biomass as a fuel source. The exclusion of biomass emissions from liability is specifically provided for in section 30 of the bill. Those generators that use biomass, including wood waste from native forests, will become more cost competitive relative to generators that use fossil fuels, which will be subject to the carbon price.

However, the additional incentive from the RET for the burning of native forest wood waste to generate electricity could lead to unintended outcomes for biodiversity and the destruction of intact carbon stores. The current RET rules provide for the eligibility of native forest wood waste where wood wastes are from ecologically sustainable harvesting operations and wood wastes are manufactured wood products—that is, old furniture, construction wood waste, timber from demolished buildings or offcuts from construction or furniture or sawmill residue. The RET regulations are being amended to exclude wood waste from native forests as an eligible renewable energy resource, and this includes products, by-products and waste associated with or produced from the clearing or harvesting of native forests, subject to appropriate transitional arrangements for existing accredited power stations.

We have released an exposure draft of these regulations for consultation with interested stakeholders and, while the RET has not been a driver of the clearing of native forests, removal of native forest biomass from eligibility will provide one less potential financial incentive to clear native forests. There has been very little use of native forest biomass for bioenergy to date, so this change is not expected to impact significantly on investment or jobs in the forestry or wood processing sectors. I hope that is helpful to you, Senator Colbeck.