Carbon sink plans sunk by stalling of emission plan

TREE-planting schemes and other carbon-offset projects could be abandoned by organisations at the end of the month, another casualty of the federal government's delayed emissions trading scheme.

Many of the carbon-offset programs that have flourished under the government's Greenhouse Friendly program will not be covered by the Rudd government's new national offset standard, which comes into force on July 1 when the Howard-era Greenhouse Friendly is wound up.

Without the endorsement of Greenhouse Friendly, which regulates and accredits Australia's carbon credit or ''offset'' producers, many offset producers will be unable to claim their projects help reduce carbon pollution.

Already BP has put on hold its own carbon-offset program, and Qantas has confirmed it is considering its options after reviewing its offset scheme. A BP spokesman said the company had postponed a replacement ''until we get clarity around the regulatory framework''.

A Qantas spokesman said: ''We consider it vital that our carbon-offset program meets best practice standards and is credible in the eyes of our customers.''

Organisations fear eco-conscious consumers and businesses will abandon local greening and energy-efficiency schemes and instead buy credits from projects overseas, or not at all.

''The industry is at a crossroads,'' said Ric Brazzale, president of the Voluntary Carbon Markets Association.

The uncertainty comes in the wake of the government shelving its emissions trading scheme in April.

Although some offsets produced in Australia will be covered by the standard, offsets recognised by the Kyoto Protocol, including those produced by forestry and energy-efficiency programs, are not because they were supposed to be dealt with by the delayed carbon pollution reduction scheme.

And there is confusion around the standard, because it contains repeated references to the shelved scheme.

Carbon credits work by ''offsetting'' carbon emissions through measures such as tree-planting, soil sequestration or improved energy efficiency. Those producing them include non-profit and listed companies. Australia's voluntary carbon industry is worth about $150 million a year, according to industry sources.

The situation is a blow to the industry, which has fought hard for credibility and, in some cases, spent substantial time and money on Greenhouse Friendly endorsement.

''With the delay in the scheme and the [standard] being narrowly defined, there's no incentive for business and industry to move ahead and reduce their emissions in the meantime,'' said Paul Curnow, a partner at law firm Baker & McKenzie, who has acted for several offset producers. ''The government needs to find a way to encourage action now, even though the [carbon pollution reduction scheme] is on hold.''

Andrew Grant, chief executive of Australia's biggest carbon offset provider, CO2 Group, said Greenhouse Friendly had been ''rigorous and credible'', but its proposed replacement was ''dysfunctional''.

Sara Gipton, chief executive of Melbourne tree-planting operation Greenfleet, the first non-profit group to earn Greenhouse Friendly approval, said the group was frustrated by the government's ''failure to ensure that credible Australian action on climate change, particularly planting native biodiverse forests, is recognised''.

''If it goes on too long, there is a risk to our organisation. Accreditation gives people comfort that we are doing what we said we will do. We want to give people the assurance that what we do makes a difference,'' she said.

Various solutions have been put forward by the industry, such as extending Greenhouse Friendly or expanding coverage of the standard. But a spokeswoman for Climate Change Minister Penny Wong said Greenhouse Friendly would expire as planned. The standard would accredit carbon-neutral organisations and products, but she added: ''The government is continuing to consult with stakeholders in developing program details.''

Without the carbon pollution reduction scheme, the industry also lacks a register to ensure carbon credits are not double-counted. Crucially, forestry offset providers will be unable to tell customers the offsets they buy will be ''additional'' to Australia's Kyoto target, which, Mr Brazzale said, meant big polluters would not have to reduce their emissions as much.