Rabbit attacks on planted seedlings are putting at risk growing carbon offset industry investments in tree plantings.

New research has found that two rabbits per hectare reduced tree regeneration by three-quarters, while five rabbits per hectare reduced regeneration to zero.

A new study on rabbits has found they have been increasing steadily over the past three years after being held low by rabbit calicivirus since 1996.

Tests on rabbits show that in drier parts of Australia they are developing genetic resistance to calicivirus.

"More than a quarter of sites with natural vegetation examined in south-eastern Australia, including Tasmania, showed that rabbits are having a sharp impact on tree and shrub seedlings," said Dr Tony Peacock, CEO of the Invasive Animals Co-operative Research Centre.

Many of the young trees that grew while calicivirus was at its peak are now being wiped out.

"Given that carbon sequestration through tree plantations and natural regeneration is firmly on government agendas, Australia needs to act now before the rabbit scourge returns," Dr Peacock said.

"Rabbits have the potential to kill vast numbers of tree seedlings, including those planted for carbon offset or sequestration benefits.

"To ensure that these carbon gains are not lost, the most costeffective solution is to work out how to get the most out of biocontrol agents, such as myxoma virus and calicivirus, or by looking for new agents."

Dr Peacock says it is critical to do the research now rather than waiting until rabbit numbers and impacts skyrocket.

A 2004 CSIRO study found the returns to Australia from the introduction of calicivirus were in the order of $0.5B to $1B for a research outlay of about $12M, while even 50 years after its release, myxomatosis is still killing about half of all rabbits that become infected.