Carbon sequestration rights on private and crown land
Parts 4 and 5 of the Climate Change Act 2010 create new, secure arrangements for the ownership, registration and transfer of forestry and carbon sequestration rights. These provisions ensure Victoria's natural resource and agricultural sectors can access the economic opportunities provided for under the Commonwealth Government's Carbon Farming Initiative.
Part 4 – Private land forestry rights, carbon sequestration rights and soil carbon rights
Part 4 of the Climate Change Act 2010 replaces the Forestry Rights Act 1996 with a new, comprehensive rights-based framework for carbon sequestered by forests and soil on private land.
The key features of the new legal framework are:
- the property rights of landowners, forest property owners and carbon investors are defined
- all parties must agree on management arrangements as part of the process of creating a Forest and Carbon Management Agreement (FCMA), which is then placed on land title
- Carbon rights are an interest that "runs with the land" – i.e. carbon rights remain attached to the land even if there is a change in land ownership.
The main benefits for private landowners, forest property owners and carbon investors are:
- landowners can directly sell carbon sequestered on their land. The reforms make it easier and simpler for private landholders to separately buy and sell forestry and carbon sequestration rights, without requiring a new management agreement every time a right is sold.
- all parties have greater legal certainty about management arrangements under the new FCMAs. These changes should minimise disputes about carbon claims under private agreements because the interests are now recorded on the title to land.
- improved investor confidence by positioning Victoria to take full advantage of national carbon markets or government-funded programs to establish carbon sinks.
While the Climate Change Act 2010 repeals the Forestry Rights Act 1996, these changes do not affect any existing forest property / carbon rights agreements made under the previous Act. People with arrangements under the Forestry Rights Act 1996 can choose to continue with those agreements or negotiate a new FCMA.
For further information about the customer information bulletin or forms published by Land Victoria, contact Land Victoria Customer Service on (03) 8636 2010.
Part 5 – Carbon sequestration on Crown land
Part 5 of the Climate Change Act 2010 recognises the value of sequestered carbon on Victoria's public land and establishes clear rules under which Crown land can be managed and used for carbon sequestration purposes. The Victorian Government may manage its own land or by arrangements with third parties, based on a new instrument known as carbon sequestration agreements (CSAs).
The Government will maintain its stewardship role on all public land and forests by sustainably managing forests to maximise value for the Victorian public.
For carbon sequestration projects on Crown land, the Department of Environment and Primary Industries Secretary:
- declares specified Crown land to be available for carbon sequestration
- holds carbon rights over Crown land subject to existing licences, leases and agreements, except in certain specified instances
- can enter into CSAs with other parties for carbon reforestation on Crown Land and grant carbon sequestration rights and soil carbon rights to third parties.
A Carbon Sequestration Agreement may authorise a person to access Crown land, plant and maintain vegetation on Crown land for the purposes of carbon sequestration, control carbon sequestered within vegetation or soil, and manage the land for the purpose of carbon sequestration.