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Farmers for Climate Action (FCA) has warmly welcomed news that low-emissions heavy equipment, trucks and utes will be eligible for low-interest loans under a new scheme supported by the Federal Government.
The Emissions Reduction Incentive Program for farmers will offer loans at 1.15% less than market rates through NAB’s arrangement with the Government-owned Clean Energy Finance Corporation. Hybrid, electric and hydrogen powered trucks, utes and machinery, will be eligible.
The program was announced on January 31 by The Hon Chris Bowen MP, Minister for Climate Change and Hon Julie Collins MP, Minister for Agriculture, Fisheries and Forestry
Farmers, agri-businesses and equipment purchasers are now eligible for discounted loans to help roll out a range of long-term cost savings initiatives that reduce emissions, thanks to a $300 million commitment from the Clean Energy Finance Corporation (CEFC) supported by the Albanese Government.
Discounts on interest rates of up to 1.15 per cent will be available to eligible borrowers through NAB under the new green asset finance investment program with the CEFC.
A Green Finance for Vehicles and Equipment product is tailored to support the purchase of electric, plug-in hybrid and hydrogen vehicles, utes, trucks and heavy equipment. The Emissions Reduction Incentive product is designed to provide a cheaper financing solution for farmers to reduce emissions across their operations.
Loans from the Emissions Reduction Incentive program for farmers are expected to range between $1 million and $5 million, meaning farmers could save more than $57,000 a year in borrowing costs when they invest in technologies and practices that will deliver environmental and financial benefits.
Farmers can opt to keep the saving, or have it reinvested in on-farm practices, such as switching to higher efficacy enhanced fertilisers which reduce nitrous oxide emissions, adopting methane inhibitors, or undertaking changed land-use practices that can increase farm yield, capture carbon, and decrease emissions.
“Reducing emissions and making a profit are not mutually exclusive. Increasingly, we’re seeing international supply chains demanding cleaner, greener products and practices, with buyers either paying a premium for green goods, or penalising higher emissions products,” said Minister for Climate Change, Chris Bowen.
“We want Australian farmers, business and manufacturers to be as competitive as possible in global markets and be supported to get there as cheaply and efficiently as possible,” Minister Bowen said.
“The former Government were determined to ignore the huge opportunities for Australia’s farming communities. The Albanese Government wants more than that for regional Australia and for our farmers and discounted loans are another step towards making that happen.”
“Australian agriculture has a reputation internationally for high standards of environmental sustainability,” said Minister for Agriculature, Fisheries and Forestry, Julie Collins.
“It’s a track record we can be proud of, but we can’t rest on our laurels. Working together will help everyone continue to do better,” Minister Collins said.
“There is no one way to reduce emissions on a farm, but these loans mean our farmers can access the capital they need to make changes that are good for their businesses.
“Australian agriculture has a wonderful story to tell, and these loans are another tool our farmers can access to keep building sustainability into their businesses.”
- $300M program offers low-interest loans for low emissions trucks, utes and machinery
- Offers farmers a carrot, not a stick, to reduce emissions on-farm
- Farmers want to reduce emissions whilst remaining profitable
Some $300 million is available under the program, with loans expected to largely be in the amount of $1 million to $5 million. This means farmers could save in the order of $50,000 a year on interest costs.
FCA CEO Natalie Collard said it was fantastic to see the Government using the carrot rather than the stick with farmers on emissions reduction.
“This is exactly the sort of program our 8400 farmer members have been calling for. Farmers want to know how to reduce emissions whilst remaining profitable, and this program gives them a way to do that, if they choose. That’s how you keep farmers farming. Credit where credit is due,” Ms Collard said.
“Farmers know why we need to reduce emissions – this year’s bushfires remind us that climate change is hurting farmers now.
“We warmly welcome this scheme because it gives farmers choice. If a farmer wants to choose a hydrogen, hybrid or electric powered machinery, the farmer can choose to take a low-interest loan to get it. As the technology proves itself, other farmers can also choose low-emissions machinery if they wish.
“Australia’s farmers have a tradition of clean, green farming, and we want to continue that tradition so our kids can farm forever.”
