Sugar industry fears carbon plan impact

The sugar industry fears it could lose vast tracts of cane land to forestry under the federal government's plan to cut Australia's greenhouse gas emissions.

Canegrowers' chief executive Ian Ballantyne has welcomed the exclusion of agriculture from the government's carbon pollution reduction scheme until at least 2015.

But he warns the sugar industry is facing a substantial threat if companies invest in carbon sinks through forestry.

"With the taxation incentives to get involved, even a small increase in forestry is going to bite into us," Mr Ballantyne said.

"Why? We're in good fertile land, we're rain-fed and therefore there's a significant threat, even at a five per cent emissions target."

If the target for emissions cuts goes beyond five per cent, the threat will magnify, he said.

The government's targets of five to 15 per cent emissions cuts is likely to spark further expansion of between 5.7 million and 26.3 million hectares of plantation forestry across Australia, the government estimates.

"We are one of the industries that's right in the gunsight," Mr Ballantyne said.

The industry has already lost 14,000 hectares of prime cane land to forestry.

At a certain point forestry could also render sugar mills unviable, he said.

Mr Ballantyne said cane growers would face increased costs despite agriculture's exclusion from the early carbon reduction scheme.

"Sugarcane growing uses energy and energy-intensive inputs and growers will be forced to pay more with the introduction of a carbon pollution tax on energy, especially electricity, fertiliser, transport and water," he said.

International competitors would not face these increased costs, making it essential that a global agreement is struck before the 15 per cent target is introduced, Mr Ballantyne said.

Prime Minister Kevin Rudd on Monday said his government would seek to reduce the nation's carbon emissions by five per cent of 2000 levels by 2020.

The target would rise to 15 per cent if a global pact on climate change, including major emitters, is signed.