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Department of Premier and Cabinet

National opportunities

Emissions Reduction Fund

The Australian Government's Emissions Reduction Fund (ERF) is helping Australia to meet its Kyoto Protocol commitment of reducing carbon emissions to 5 per cent below 2000 levels by 2020, and 26-28 per cent below 2005 emissions by 2030.

The ERF provides incentives to businesses to reduce their emissions via a ‘reverse auction’ approach. Businesses submit project bids to reduce emissions at a specific facility, or for a specific type of activity like energy efficiency in commercial buildings. In each auction round, the projects with the lowest cost per tonne of carbon emission reductions will receive funds.

Businesses can add together emissions reductions from multiple locations, as well as multiple types of emission reduction activities, into a single project bid. For example, a dairy farm could propose a project where methane from dairy manure is captured (reducing emissions) and energy is generated from it (energy efficiency).

The Clean Energy Regulator manages the crediting and purchasing of emissions reductions. In 2014, the Government allocated $2.55 billion to the ERF. On 25 February 2019 The Australian Government announced the Climate Solutions Fund, which provides an additional $2 billion to the ERF.  This funding is expected to deliver around another 100 million tonnes of emissions reductions by 2030.

For more information visit the Clean Energy Regulator website or subscribe to the Clean Energy Regulator e-newsletter.