Mr COMBET (Minister for Climate Change and Energy Efficiency) (10:34 AM) —I move:

This bill provides for the establishment and maintenance of a robust Australian National Registry of Emissions Units to underpin implementation of the Carbon Farming Initiative.

An efficient electronic registry, governed by clear rules and supported by appropriate enforcement mechanisms, will allow farmers, landholders and other participants with offsets projects under the initiative to receive, hold and transfer their carbon credits securely, with minimum costs and delay.

This important piece of infrastructure will be based on an existing registry that the Australian government established in 2008 to meet key obligations that Australia has under the Kyoto protocol. The bill will put the Kyoto registry, which has operated on an administrative basis to date, on a legislative footing.

Combining the registry functions of the Carbon Farming Initiative and the Kyoto protocol means that anyone who owns tradeable units issued under both systems will be able to hold those units in a single account. This will significantly reduce account establishment and operating costs, and streamline all transactions for account holders.

All accounts that exist in the current registry will be transferred to the statutory registry at the commencement of the Carbon Farming Initiative, without disruption to current account holders.

The bill provides for the recognition in Australian legislation of the emissions units created under the Kyoto protocol. It sets out how these units can be issued and transferred and is consistent with Kyoto protocol rules. The Carbon Credits (Carbon Farming Initiative) Bill 2011 deals with the process for exchanging Australian carbon credit units issued under the Carbon Farming Initiative with certain Kyoto units, which can then be sold in international carbon markets.

Other types of international units may also be recognised through regulations. This would allow other international carbon trading systems to be recognised and possibly linked to the Carbon Farming Initiative.

The bill will clarify that Kyoto and non-Kyoto units held in the registry are to be treated as personal property for the limited purposes of laws relating to bankruptcy, external administration, wills, intestacy and deceased estates, and any other prescribed purpose. This reduces any legal uncertainty surrounding the units in these circumstances.

A range of information in the registry will be made publicly available, including the name of account holders, and the regulations may require publication of the total number of specified Kyoto units held in accounts. This information is required to meet requirements under the Kyoto protocol and is currently available on the Department of Climate Change and Energy Efficiency website. Publication of information will also provide a high level of transparency to ensure public confidence in the Carbon Farming Initiative.

Users of the registry will expect the administrator of the registry to protect their accounts from misuse and to safeguard their carbon credits from theft.

High standards of security and a range of antifraud measures are already being applied to the existing registry. For example, the registry complies with IT security standards set by the Defence Signals Directorate and the United Nations Framework Convention on Climate Change. Anyone seeking to open a registry account must also undergo an identity check.

The bill will introduce additional safeguards to minimise the risk of fraud and misuse of the registry. These safeguards include: criminal penalties for fraudulent or dishonest conduct; powers to suspend registry operations temporarily to address threats to the system; the administrator will have discretion not to transfer units where there are reasonable grounds to suspect that the transaction is fraudulent; powers to correct unauthorised entries in the registry; and powers to close the accounts of any persons who breach their registry obligations.

This bill provides for an efficient and safe system to hold and track carbon credits and other units used to implement the Carbon Farming Initiative and to meet Australia’s international obligations under the Kyoto protocol.

I commend the bill to the House.

Debate (on motion by Mr Turnbull) adjourned.