The National Association of Forestry Industries (NAFI) says Professor Ross Garnaut's report to Government released today, "reinforces what NAFI has said time and again" that in order for Australia to meet its emission reduction targets, forestry must be fully included under the ETS from the outset.

NAFI chief executive Allan Hansard says forestry has a significant role to play, and by 2020 Australia's forest industry is projected to contribute 81 million tonnes of carbon dioxide abatement, which equates to 20pc of Australia's total abatement task.

"This contribution has been recognised in the Garnaut Climate Change Review draft report with the recommendation that there should be unlimited carbon offset credits accepted from forestry under the emission trading scheme," Mr Hansard said.

"NAFI is particularly pleased that the review draft report also recommends the recognition under an emission trading scheme of carbon stored in wood products as this is another significant source of carbon abatement."

NAFI says there are four key areas of the forest industry that need to be included under the Government's ETS in order to ensure Australia can meet its emission reduction targets:

* plantations, which currently deliver around 20mt of CO2 abatement each year and could increase to around 50mt per annum by 2020;

* commercial native forests, which abate 23mt of CO2 each year, which is expected to remain constant;

* carbon in harvested wood products, which represents the equivalent of 5mt of CO2 abatement each year; and

* wood waste for renewable energy - NAFI sayst there is enough wood waste available from existing forest industry activities in Australia (without harvesting a single extra tree) to produce around 3 million megawatt hours of electricity per annum and provide a permanent reduction in Australia’s greenhouse gas emissions of 3 million tonnes of CO2 per year.