Australia: Seeing The Wood For The Trees: A Look At Recent Forestry Amendments To The CPRS

Last Updated: 20 July 2009
Article by John Clayton

Key Points:
The proposed amendments to the CPRS Bill in relation to forestry could mean more commercial flexibility in dealing with carbon sequestration rights arising from forestry projects and a streamlined integration of forestry into the CPRS.

In May 2009, the House of Representatives passed changes to the CPRS Bill 2009 ostensibly in response to feedback from stakeholders and as a result of the global recession, including amendments dealing with forestry.

This article takes a short look at some of the forestry amendments.

Scheme in a nutshell

The CPRS as it is currently proposed establishes a mechanism whereby eligible reforestation projects can participate in the CPRS and earn Australian Emissions Units (AEU). There are a number of steps which need to be satisfied in order to participate in the CPRS:

  • an entity must have an exclusive, enforceable right to forest carbon. The Bill sets out the criteria required to establish the exclusive enforceable rights. In general terms, the Bill picks up the provisions of the various State-based carbon rights creation and registration schemes, so that a carbon right which is a legal creature in a State jurisdiction will be a relevant carbon right for the purposes of the CPRS;
  • an entity will need to apply for and be recognised as a reforestation entity;
  • once accredited as a reforestation entity, the entity must include its forest in the CPRS. The forest will need to satisfy the requirements of the Kyoto Protocol, and may then be declared an eligible reforestation project.

Once the forest is declared to be a reforestation project, it may participate in the CPRS.

There are a number of other elements of regulation for a reforestation project established by the CPRS, but this article will focus on three significant amendments to the way forests are treated as a result of the recent changes to the Bill.

Multiple titles

Under the original CPRS Bill a reforestation project had to be confined to a single land title. This resulted in significant concern from stakeholders given that most large-scale commercial forestry projects would include multiple land titles. Further, there would always be the potential for subdivision of a single title at a later point in time. The compliance implications (including multiple reporting) caused by multiple titles was said to be a disincentive to participating in the CPRS.

The Bill has now been amended to allow reforestation projects over multiple land titles. The summary produced by the Department of Climate Change in relation to the Bill suggests that this will allow larger entities to manage forests across different geographical locations in order to reduce some sorts of risk, for example, from natural events such as fire.

There are also likely to be significant administrative benefits, enabling participation in the scheme to be defined by reference to landholders rather than lot boundaries

Transfer scheme liabilities

Under the initial version of the CPRS Bill, the person who held the carbon sequestration right for the reforestation project also held the liability to comply with the CPRS, including reporting and relinquishment obligations (relinquishment obligations arise, for example, when forests for which AEUs have been issued are cleared without being replaced).

Under the amendments to the Bill, it will be possible for the holder of the carbon sequestration right to enter into an agreement with another person to transfer the liability for complying with the CPRS to that person. The right to transfer liabilities is not untrammelled and must be approved by the regulating authority. The Bill sets out the criteria for approval.

These agreements may be unilaterally cancelled by the holder of the carbon sequestration right if it wishes to assume responsibility for compliance with the CPRS. The Department's summary says this will enable a broader range of legal and commercial arrangements for reforestation projects. We note that it will also allow a more flexible allocation of risk in commercial arrangements where reforestation is an element.

Forest maintenance

Under the initial CPRS Bill, an accredited reforestation project could be issued with AEUs on the basis of its estimated carbon sequestration over the life of the project. Having regard to the exigencies of carbon sequestration, it is proposed that the AEUs be calculated having regard to a risk of reversal buffer. This is relevant because where there is shortfall in actual carbon sequestration when compared to the AEUs granted for the project (such as in the example given above where a forest is cleared without being replaced), the holder would have to relinquish AEUs to have regard for this shortfall. The average calculation of AEUs and the risk of reversal buffer were designed to mean no surrender of AEUs in the event of natural occurrences such as fire, provided that any lost forest was reforested.

Where the forest is cleared or not replanted following harvesting or other destruction, the forest entity may be liable to surrender AEUs and there may be a notice issued on that entity to surrender the AEUs. If the AEUs are not surrendered as required then a forest maintenance obligation will arise.

Under the initial CPRS Bill, the forest maintenance obligation rested on the forestry right holder (usually the landowner). The forest maintenance obligation was an obligation to re-establish the forest if it had been cleared or maintain an existing forest. The obligation would be enforced on the forestry right holder even if that entity did not receive the AEUs in the first place.

Under the amended CPRS Bill, the forest maintenance obligation is converted from a positive to restrictive obligation and is a broad-based obligation. It now applies to all persons with an interest in the land and, in effect, requires that a person must not engage in conduct that will have the effect of reducing the long-term carbon stores of a forest. Because this obligation applies to "persons" in general rather than the forestry right holder, the burden of the forest maintenance obligation will be spread more broadly and contraventions of the obligation will be easier to prove. The Department's summary notes that this approach reduces the risk to landowners for allowing reforestation projects on their land.


The proposed amendments to the CPRS Bill in relation to forestry are likely to have the effect of allowing more commercial flexibility in dealing with carbon sequestration rights arising from forestry projects and may well have the effect of streamlining the integration of forestry into the CPRS.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.