22 May 2012 – The federal government today said local councils could make money from the methane gasses in their landfills, rather than need to fork out huge payments under the coming carbon price regime.

Capturing greenhouse gas emissions and restricting the total emissions from a landfill site to less than 25,000 tonnes a year would remove liability, Federal Parliamentary Secretary for Climate Change and Energy Efficiency Mark Dreyfus said on Tuesday.

“Providing an incentive to cut pollution is what the carbon price is designed to do,” Mr Dreyfus said.

In most cases, council landfill will be too small to fall under the carbon price net.

“In a number of cases, the potential effect on rates has been over-estimated, misrepresented or misreported.”

In addition about $200 million in local council grants for energy efficiency retrofits in local council buildings and street lighting would soon be announced.

Mr Dreyfus said key points about the carbon price impacts included:

  • Most councils will have no carbon price liability at all from landfills. Only large sites generating more than 25,000 tonnes of carbon dioxide equivalent greenhouse gas pollution a year are covered. The majority of landfills are too small to be covered.
  • The carbon price does not apply to pollution from waste deposited in a landfill before 1 July 2012.
  • councils with large landfills will have no obligation in 2012-13.
  • Councils can capture methane gas to earn “carbon credits” under the Government’s Carbon Farming Initiative. Councils can use credits to meet their carbon price liability or generate income by selling them to high-emitting polluters. This income can be re-invested in the local community.
  • Best practice rates of gas capture can reduce methane emissions by more than 75 per cent and reduce any carbon price liability to less than $8 a tonne of waste deposited in 2012.
  • Capturing enough methane to reduce a council’s liability below the 25,000 tonne threshold will mean that the council will not incur the carbon price.
  • Councils can also use captured methane to generate electricity for the local community and generate another source of income under the Renewable Energy Target. Newcastle City Council currently uses its landfill gas to create enough power to supply 3000 homes.
  • Any potential increase in council rates are factored into the Government’s household assistance package.
  • Household assistance is, on average, $10.10 per household per week. It is being delivered through tax cuts, increased family payments, pensions and other Government benefits. Some payments have already begun.
  • By contrast, any council rate rises associated with a carbon price on landfill pollution are estimated to be as low as 13 cents per household, per week.

More information for councils is available at www.cleanenergyregulator.gov.au.