The decision by the Federal Government is a turnaround from its previous position, after local government and landfill operators lobbied for changes to the clean energy legislation.
Concerns were raised about the possibility of larger facilities diverting waste to smaller landfills in an attempt to avoid the tax, but independent experts claim that existing waste disposal contracts, land use planning and other restrictions would make using this loophole unlikely.
“In its consultations with the government, the Australian Local Government Association (ALGA) argued that, due to existing waste disposal contracts, land use planning and other restrictions, the risk of diversion of waste was low,” said ALGA president Genia McCaffery in a statement.
Councils and other landfill operators will also be able to discharge up to 100 per cent of their emissions using credits issued under the Carbon Farming Initiative over the period when the carbon price is fixed.
The move is designed to reduce carbon price liability for local councils and commercial landfill operators who earn credits under the Carbon Farming Initiative by implementing legacy emission avoidance projects like capturing and flaring methane emissions.
While smaller landfills will be exempt for the first three years of the scheme, the Climate Change Authority will be asked to review the issue in 2015-16.
?ALGA welcomes the outcome of the parliamentary process and introduction of a market-based approach to carbon pricing,? McCaffery said. ?The government has listened to this feedback which means that no landfill facilities with direct emissions of between 10,000 and 25,000 tonnes of carbon dioxide will be liable under the pricing mechanism.?
Opposition leader Tony Abbott is still claiming he will roll back the carbon tax should he win government at the next election, despite advice that such a move would cost in the realm of $37 billion and stiff opposition from Labor and the Greens in the Senate.