Leaders seek full ‘scope’ of potential policy problems

Farm leaders want to help federal treasury knock any rough edges from rules that might negatively impact livestock producers.

“Considerably concerned” farm leaders have called on the government to hold a specific land sector consultation process to ascertain the full compliance and financial burdens expected to be heaped on livestock producers through its scope 3 emissions reporting mechanism.

While scope 1 and 2 emissions are a result of on-farm activity and energy use respectively, scope 3 emissions are produced in supply chains, such as in the manufacture of feed and fertiliser.

In a July 27 submission to the federal treasury, seen by The Weekly Times, National Farmers’ Federation chief executive Tony Mahar said the farm sector was worried about the potential impacts of its Climate Related Financial Disclosure reporting policy.

He said the industry was particularly “opposed” to the introduction of scope 3 reporting within the policy, scheduled to commence on July 1 next year, until any hidden shared cost and time commitment issues were revealed.

National Farmers' Federation CEO Tony Mahar. Picture: AAP Image/Lukas Coch

“The land sector is a complex area that sees an array of mechanisms utilised to adapt to, and mitigate the impacts of, climate change,” he wrote.

“It is troubling, and intellectually challenging, to have an inherent financial audit process intersecting with a biophysical multifaceted landscape that will inherently have challenges in providing hard data.”

He added that the reporting mechanism for reporting would “need to be the subject of significant consideration” as the land sector “is in a unique position as a sequester and emitter” and comprised of small and medium producers who currently do not have the capacity to make complex assessments of emissions status.

Meanwhile, the paper also said the supply of data, as evidence of environmental management, to financial institutions should be avoided where possible “to ensure they do not discriminate against individual industry groups”.

“This is a major identified risk and one that must be adequately addressed,” Mr Mahar said.

The news comes as Australia’s big banks increasingly tie lending to emissions reduction and ramp pressure on farmers to hit net-zero targets, with those who fail to take on-farm carbon action risking being shunned by lenders in the future.

Federal Treasurer Jim Chalmers speaks at the National Press Club in Canberra. Picture: NCA NewsWire/Martin Ollman

Treasurer Jim Chalmers is currently settling the government’s final scope 3 policy positions with a final consultation on legislative design scheduled for later this year.

Treasury has proposed a three-year scope 3 reporting transition period to allow people to build their capability over time.

A Meat and Livestock Australia spokesperson said its new carbon calculator would help producers quantify carbon emissions, and reductions, to help unlock domestic and international market opportunities.