Joint media release: Government removes ACCU water rule to boost carbon farming and forestry jobs

Minister for Climate Change and Energy, the Hon Chris Bowen MP
Minister for the Environment and Water, the Hon Tanya Plibersek MP
Minister for Agriculture, Fisheries and Forestry, Senator the Hon Murray Watt


The Albanese Government is delivering on its commitment to remove the ‘water rule’ from the Australian Carbon Credit Unit (ACCU) scheme, another crucial next step in reforming the nation’s carbon crediting system and creating jobs in regional Australia.

The water rule – with its complex exceptions, has been an ad-hoc and ineffective way of managing water resources.

The Australian Government is addressing this holistically, in partnership with states and territories, as part of the renewal of the National Water Initiative.

Removing the ‘water rule’ creates certainty for forestry to better contribute to emissions reduction through increased participation in carbon farming and investment in new timber plantations.

Plantations and farm forestry plantings store carbon, enabling growers to participate in the ACCU scheme to generate carbon credits and earn additional income from selling these credits.

These credits are certified through the Clean Energy Regulator for compliance with the detailed requirements in ACCU scheme methods and rules to ensure they have integrity.

Applications to register new plantations and tree planting projects in the ACCU scheme with a start date after 1 June 2024 will now be assessed without being subject to the water rule.

The government has also approved 4 additional regions where tree planting projects can meet the water rule before its removal. They cover Regional Forestry Hubs in south and Central Queensland, North Queensland, the Northern Territory and Ord Valley, and southeast New South Wales.

These newly approved regions are in addition to existing regions in Western Australia, Tasmania, New South Wales, Victoria and South Australia.

To further support new carbon farming projects and Australia’s forestry industry, the Government is also providing $73.8 million in grant funding to support the establishment of new plantation forests.

The grant funding supports the establishment of new long-rotation softwood and hardwood plantations to help expand Australian timber supply, contribute to carbon reduction and create regional jobs. These grants opened for applications in June, with information available here.

Quotes attributable to Minister for Climate Change and Energy Chris Bowen:

“With the reforms announced today and grants, the government is supporting regional jobs, reducing carbon emissions and encouraging investment in Australian businesses. 

Quotes attributable to Minister for the Environment and Water Tanya Plibersek:

“The water rule was always an ad-hoc approach to address the much broader issue of water interception by plantations.

“The Australian Government is addressing this holistically, in partnership with states and territories, as part of the renewal of the National Water Initiative.”

“The immediate exemption of four additional low-risk regions and the full removal of the water rule by mid-2024 is a pragmatic pathway to remove unnecessary barriers to new plantations while making sure we look after our precious water resources.” 

Quotes attributable to Minister for Agriculture, Fisheries and Forestry Murray Watt:

“New long-rotation softwood and hardwood plantations will help Australia meet future demand for timber, while ensuring a sustainable and prosperous future for the forestry industry.

“The removal of the water rule demonstrates the Government’s ongoing commitment to support the plantation forestry industry.

“The plantation forestry industry is a big employer in regional areas, and this move will encourage industry to take a bigger role in helping Australia bring down emissions whilst also providing an important resource.”