Farmers could save more than $50,000 a year on interest costs for hybrid, electric and hydrogen-powered utes and methane-reducing feed for their herds under a new tranche of cheap loans.
The nation’s federal green bank on Friday announced $100 million would go to farmers as part of a $300 million green finance incentives package open to agribusinesses and equipment purchasers.
Farmers for Climate Action chief executive Natalie Collard welcomed the government “using the carrot rather than the stick” so farmers could choose how they wanted to reduce greenhouse gas emissions while remaining profitable.
“This is exactly the sort of program our 8400 farmer members have been calling for … 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,” she said.
The commitment from the Clean Energy Finance Corporation offers farmers discounts on interest rates of 1.15 per cent for eligible borrowers through the National Australia Bank.
Farmers can opt to keep the saving or reinvest it in low-emissions fertilisers and methane-reducing livestock feed additives, such as the red seaweed product developed by the CSIRO.
The announcement has been made alongside a new CSIRO-developed tool known as the pathfinder to help farmers understand the carbon footprint of their properties and explore ways to cut emissions.
Loans under the Emissions Reduction Incentive program are expected to range from $1 million to $5 million.
Businesses now recognise the opportunities of going green, NAB Group executive for business and private banking Rachel Slade said.
“Providing lower-cost, green finance makes it easier for Australian businesses to invest in technologies and practices that reduce emissions and operating costs, drive long-term business growth and enhance their competitiveness,” Ms Slade said.
The announcement follows federal green bank the Clean Energy Finance Corporation arranging with Rabobank to offer concessional loans to landowners for the upfront cost of planting native trees to attract carbon credits.
“The agriculture sector is at the heart of the net-zero transition, with challenging climate conditions impacting Australia-wide,” the corporation’s head of natural capital Heechung Sung said.
“In lowering their carbon footprint, farmers can become more resilient to climate change while also lifting the appeal of their produce, as consumers increasingly preference sustainable products,” she said.
Investments in recycling facilities, manufacturing solar, wind and battery components or making low-emission cars, trucks, buggies and earthmoving equipment will attract a 0.5 per cent interest rate discount.
Customer loans for investments through the $200 million NAB Green Finance for Vehicles and Equipment program are expected to range from $10,000 to $5 million.
The Clean Energy Finance Corporation is a specialist net-zero investor with access to more than $30 billion from the federal government.
