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Is fuel used in forestry for the purposes of section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) when it is used in a tractor with a mounted mulcher to remove lateral growth from trees and remove ground vegetation in a forestry plantation?

Yes. Fuel is used in forestry for the purposes of section 35 of the EGCSA when it is used in a tractor with a mounted mulcher to remove lateral growth from trees and remove ground vegetation in a forestry plantation.

An entity operates a diesel-powered tractor with a mounted mulcher.

The entity removes lateral growth from the base of trees and ground vegetation within a forestry plantation.

The regular removal of this growth enables other machinery to spray and fertilise the trees as required.

The trees are in a plantation and are intended for felling.

Section 35 of the EGCSA defines 'forestry', in part, as: (a) the planting or tending, in a forest or plantation, of trees intended for felling; or (b) the thinning or felling, in a forest or plantation, of standing timber;...

The entity's activities do not constitute the planting of trees. Nor do the entity's activities constitute the thinning or felling of standing timber.

The remaining issue to be determined is whether the use of the tractor constitutes the tending, in a forest or plantation, of trees intended for felling.

The Commissioner has considered the meaning of 'tending' for the purpose of section 35 of the ECGSA in Product Grants and Benefits Ruling PGBR 2005/1. Paragraph 94 of that Ruling states: The 'tending of trees' means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour. 'Tending of trees' includes: • fertilising after planting; • spraying trees against pests and diseases; • eliminating weeds; • fire protection measures; and • watering.

Lateral growth and surrounding ground vegetation inhibit the access of machinery used to spray and fertilise the trees as required.

The regular removal of lateral growth from the base of trees and surrounding ground vegetation is an integral part of the systematic process of ensuring the trees are properly nurtured. Therefore, it is accepted that the use of the tractor in these activities constitutes the tending of trees intended for felling.

It follows that the use of the tractor in undertaking these activities constitutes 'forestry' for the purposes of section 35 of the EGCSA.