Impact of the carbon price on local council landfills

A number of local governments from around Australia have asked about how the carbon price will apply to pollution from local landfill sites and the potential impact this might have on rates for local communities. In a number of cases, the potential effect on rates has been overestimated, misrepresented or misreported.

In determining any impact, some basic facts need to be taken into account:

• 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 carbon price does not apply to pollution from waste deposited in a landfill before 1 July 2012.
• The government has made rules deeming landfill emissions in 2012/13 to be zero, so council 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 reinvested in the local community.
• Best-practice rates of gas capture can reduce methane emissions by more than 75% and reduce any carbon price liability to less than $8 per 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. Providing an incentive to cut pollution is what the carbon price is designed to do.
• 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.
• 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.
• Regarding waste after natural disasters: the Australian Government provides comprehensive disaster-recovery assistance and financial support to communities in recovery and clean-up activities. For example, Queensland communities received $6 billion in assistance following Cyclone Yasi.

The government is working with councils to provide guidance and information on the implementation of these policies to cut pollution and create clean energy. As part of this, federal Parliamentary Secretary for Climate Change and Energy Efficiency Mark Dreyfus has written to every council in Australia and provided a landfill factsheet. The Australian Local Government Association (ALGA) has also provided information in its weekly newsletter to councils.

The Clean Energy Regulator and the Department of Climate Change and Energy Efficiency have and will continue to hold information sessions for local councils. Councils can visit the CER website (www.cleanenergyregulator.gov.au) to work out if they are covered by the carbon price, and find more information at www.cleanenergyfuture.gov.au.