The Australian Local Government Association (ALGA) says the Direct Action plan is going to need a fair bit more work if it is to truly help communities.

The Federal Government passed the Bill in recent weeks that backbone of its Direct Action climate policy – through the Emissions Reduction Fund (ERF).

The ERF will provide carbon credits to selected emission-reduction projects, based on the overall reductions promised compared to the current emission levels.

But an official statement from ALGA says that while the Bill has passed, and should receive Royal Assent before Christmas, there are still elements of the proposed ERF mechanism that need to be managed and fine-tuned.

ALGA says the passage of this Bill also brings back into the spotlight the issue of what to do with uncollected Carbon Price Mechanism (CPM) funds.

It is a significant concern for councils, and ALGA says it has communicated them to Environment Minister Greg Hunt.

Work is allegedly underway to determine a fair and equitable process to enable councils to utilise landfill-related uncollected CPM funds for the benefit of local communities.

But this mechanism is still under development by the department, and ALGA says it hopes details of the transitional arrangements from the CPM to the ERF will be released by early 2015.