A key panel session at the Digital Agrifood Summit exploring Denmark's proposed carbon tax on agriculture has highlighted the need to avoid simplistic comparisons between Australian and European models.
GrainGrowers CEO Shona Gawel said the summit, attended by leaders across agriculture, technology, and policy, prompted robust discussion about the relevance and risks of similar mechanisms in the Australian context.
Ms Gawel said in the context of the overall discussions around the development of a sustainable domestic food system two aspects require careful consideration: the unique nature of Australian production and the need for agriculture to avoid becoming a default offset mechanism for other sectors unwilling to make genuine emissions reductions.
"What we need is for genuine discussion that considers the nature of Australian agriculture and how all sectors can accept responsibility for reducing emissions."
Ms Gawel said recently that there had been a focus on the EU's Carbon Border Adjustment Mechanism (CBAM), particularly in light of Australia's ongoing review into the issue of carbon leakage.
"The key aspect of this discussion is that Australia faces a fundamentally different structural landscape to the EU which operates a mature Emissions Trading Scheme and maintains significant domestic fertiliser manufacturing capacity."
She explained that Australia had ceased domestic production of urea, a critical nitrogen fertiliser, in 2022 with the closure of Gibson Island.
"All urea used in Australian agriculture is currently imported, primarily from low-cost producers such as the Middle East and China. Domestic production is not expected to resume until 2027, contingent on the completion of the Perdaman project in Western Australia's Pilbara region."
"This means that a CBAM-style policy would not protect domestic fertiliser manufacturers but would instead impose additional costs on farmers who rely on imported inputs to grow food and fibre."
Ms Gawel said that, unlike Denmark, the Australian Government has committed to not setting mandated emission reduction targets for agriculture, as reflected in the recently released Agriculture and Land Sector Plan.
"When it comes to emission reduction targets, the position of GrainGrowers is that agriculture must not become a default offset mechanism for other sectors unwilling to make genuine emissions reductions."
"Government policy must ensure Australian grain growers remain global leaders in low-emissions grain production, with greater incentives to encourage and expand local manufacturing capability of low-emissions inputs, such as fertilisers, in regional Australia," she said.
A link to GrainGrowers' climate change policy can be found HERE.
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