The Federal Government has this morning announced the introduction of concessional tax treatment, which will apply to revenue generated by primary producers from the sale of Australian Carbon Credits (ACCUs) and biodiversity certificates.
Under this regime, primary producers will be able to treat revenue from the sale of ACCUs as primary production income which grants them access to income tax averaging arrangements and the Farm Management Deposit scheme. Biodiversity certificates are set to also be given the same treatment in line with this new regime.
The new tax regime aims to help Australia deliver on its goal of net zero emissions by 2050 by encouraging carbon abatement activities that are estimated to provide Australian primary producers with a $100 million benefit.
These changes will provide further encouragement for primary producers to diversify their income and explore opportunities in the burgeoning carbon industry.
The discussion around carbon in the agricultural industry continues to intensify as primary producers start to see the opportunities available. With increasing emphasis being placed on primary producers and their role in Australia’s emission reduction goals, this new regime provides them an incentive to contribute through an alternative source of on-farm income.
Hamilton Locke’s offers a unique combination of a market-leading food and agribusiness team working alongside our multi-disciplinary carbon markets team. Our team is at the forefront of transactional work and advisory work across a broad spectrum in the ESG space.
Our carbon markets team is deeply involved with many of the key market players including carbon credit traders, aggregators, project developments, technology holders and financiers and has acted on many market lead transactions in this space.
Our expertise and our connections provide clients with high emission mitigation requirements with clear insights and practical solutions to the evolving regulatory and market landscape and options to mitigate their emissions (including though the most valuable offset procedures) in both the voluntary and compliance markets.
Please get in touch with our team if you would like to understand more about the tax concessions for primary producers or if you require assistance with your carbon project.
