What’s Happened? Commitment to Remove ‘Water Rule’

12-month anniversary of election commitment to remove the ERF water rule – what’s happened?

Thu 27 Apr 23


Timber Queensland has welcomed the announcement by the federal Minister for Agriculture, Fisheries and Forestry, Murray Watt, of $108m in new grants to support wood processing and innovation across Australia. This announcement forms part of the Albanese Government’s election platform, A Future Grown in Australia: a better plan for forestry and forest products released in 2022.

However, it has also been 12 months since the Australian Labor Party (ALP) made a commitment under the same election platform to remove the so-called ‘water rule’ under the Emissions Reduction Fund.

Under this rule, new plantations for timber production are not eligible to bid for carbon sequestration projects in areas that receive over 600 mm annual rainfall, unless the Minister is satisfied there are no adverse impacts for water allocations. Plantation forestry is the only vegetation management activity that requires such a rule in the Fund. For a number of timber growing areas including in Queensland, Northern Territory and parts of New South Wales, this rule remains firmly in place.

Industry has long argued that this acts as a perverse barrier to any new plantation investment as without carbon payments most plantation projects would fail to deliver an adequate rate of return. At the federal election there was strong bipartisan support from both major parties to remove the water rule as a barrier to new plantation investment, carbon sequestration and timber supply. The strong commitment to remove the water rule was lauded by industry and Timber Queensland at the time, where the area of timber plantations has actually declined due to the lack of a supportive investment environment for new plantations.

Labor berated the Morrison Government for taking three years to start to look at this issue.

On the anniversary of this significant election commitment made on 27 April 2022, it begs the question – what’s happened since?


  • Mick Stephens

    Mick Stephens, CEO, Timber Queensland. Resource economist and executive leader, former Deputy CEO, Australian Forest Products Association.


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