An overview of project proponents' CFI obligations

Changes to the Carbon Farming Initiative

The legislative rules governing the Carbon Farming Initiative have changed. The Carbon Farming Initiative has been integrated with the Emissions Reduction Fund from 12 December 2014.

Content on this website will be progressively updated to reflect these changes. More information can be found on the Emissions Reduction Fund and other schemes page.

This page contains examples of project proponents' obligations under the Carbon Credits (Carbon Farming Initiative) Act 2011 and regulations. The tables below also link these obligations with examples of non-compliance and how the Clean Energy Regulator could take compliance action.

1. To remain a recognised offsets entity (ROE)

Non-compliance
  • person no longer ‘fit and proper’
    (eg convicted of certain offences related to dishonest conduct or insolvent)
Enforcement
  • Recognition as an offsets entity may be cancelled
Outcome
  • Person not able to participate in the CFI
  • After 90 days any projects that the ROE is still the proponent for may be revoked
  • Commercial arrangements may be affected.

2. To undertake eligible offsets project in accordance with CFI legislation & relevant methodology determination

Non-compliance

Project is declared an eligible offsets project but one or a number of the below activities occur:

  • Required regulatory approvals have not been obtained.
  • Eligibility requirements have not been met (eg project no longer conforms to relevant methodology determination).
  • Project proponent ceases to be a recognised offsets entity.
  • Person responsible for carrying out the project ceases to be the project proponent. (eg project is sold or proponent dies).
  • Clean Energy Regulator determines that project proponent provides false or misleading information.
Enforcement
  • Declaration of eligible offsets project may be revoked
  • Relevant land registration official notified
  • May be required to relinquish (hand back) credits and number of credits relinquished in relation to a project published on the Clean Energy Regulator’s website
  • The Clean Energy Regulator may agree to an enforceable undertaking that sets out actions by the proponent to bring the project back into compliance and publish this on our website
  • The Clean Energy Regulator may initiate a compliance audit at the proponent’s cost.
Outcome
  • Project not able to participate in the CFI (if revoked).
  • Potential reputational risk
  • Commercial arrangements may be affected.

3. To notify the Regulator of certain events

Non-compliance

Project proponent fails to notify the Regulator of one or a number of the following:

  • Project proponent is no longer responsible for undertaking the project (eg project is sold or proponent dies).
  • Matters and information that the relevant methodology determination requires the Clean Energy Regulator be notified of
  • A natural disturbance such as a fire or flood that has or is likely to cause a significant reversal of carbon stored.
  • Reversal of carbon stored due to interference of another person outside of the control of the project proponent.
  • Project becomes inconsistent with the natural resource management plan.
  • Person is no longer ‘fit and proper’ (eg because they have been convicted of a dishonesty offence or become insolvent)
  • Matters that the regulations require the proponent to notify the Clean Energy Regulator of
Enforcement
  • A court may set civil penalties of up to 2,000 units for individuals and 10,000 units for bodies corporate may apply per contravention.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk
  • Commercial arrangements may be affected.

4. Provide written reports for the project between 1-5 years from when the eligible offsets declaration took effect

Non-compliance
  • Failure to provide a report 3 months after the end of the nominated reporting period
Enforcement
  • A court may set civil penalties of up to 2,000 units for individuals and 10,000 units for bodies corporate may apply per contravention.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
  • The Clean Energy Regulator may agree to an enforceable undertaking that sets out actions by the proponent to bring the project back into compliance and publish this on our website
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk
  • Commercial arrangements may be affected.

5. Provide accurate and truthful information, documents, and reports

Non-compliance
  • Provide false and misleading information to the Clean Energy Regulator and/or errors in reports and/or calculation of emissions
Enforcement
  • The Clean Energy Regulator may require a person to answer questions or provide documents or copies of documents within a certain period
  • The Clean Energy Regulator may appoint inspectors to search the premises, examine an activity or documents, undertake tests and make copies and images with consent the proponent’s consent or under warrant.
  • The Clean Energy Regulator may agree to an enforceable undertaking that sets out actions by the proponent to bring the project back into compliance and publish this on our website
  • The Regulator may initiate a compliance audit at the proponent’s cost
  • A court may require a person to relinquish units by a certain time. Late penalty payments apply.
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk
  • Commercial arrangements may be affected.

6. Record certain information & retain the record for 7 years

Non-compliance
  • Failure to make and retain information required under the regulations, in the preparation of an offsets report or by the relevant methodology determination (eg regulatory approvals, operational logs, fuel receipts, maps and data sets)
Enforcement
  • A court may set civil penalties of up to 2,000 units for individuals and 10,000 units for bodies corporate may apply per contravention.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk

7. Monitor the project in accordance with the methodology

Non-compliance
  • Failure to implement and or demonstrate the monitoring arrangements set out in the relevant methodology determination (eg acquire and validate vegetation maps and monthly fire maps for savanna burning projects or gas flow information and calibration data for each meter for landfill and piggery projects)
Enforcement
  • A court may set civil penalties of up to 2,000 units for individuals and 10,000 units for bodies corporate may apply per contravention.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
  • The Clean Energy Regulator may agree to an enforceable undertaking that sets out actions by the proponent to bring the project back into compliance and publish this on our website
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk

8. Respond within the specified period to written requests for further information by the Clean Energy Regulator in relation to a CFI application

Non-compliance
  • Further information not supplied or alternative submission dates for that information not agreed
Enforcement
  • The Clean Energy Regulator may refuse to consider the application or refuse to take any further action in relation to the application
Outcome
  • Proponent unable to fully realise the benefits of participating in CFI.

9. Engage a registered greenhouse and energy auditor to audit the project

Non-compliance
  • Failure to engage a category 2 or 3 registered greenhouse and energy auditor to audit the project
  • Failure to engage a specified greenhouse and energy auditor where the project proponent has received a notice to do so
  • Failure to provide the audit team leader with reasonable facilities and assistance for the effective an effective audit
  • Failure to arrange for the audit team leader to provide a written report setting out the results of the audit
  • Failure to give a copy of the audit report to the Clean Energy Regulator on or before the day specified.
Enforcement
  • A court may set civil penalties of up to 2,000 units for individuals and 10,000 units for bodies corporate may apply per contravention.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk

10. Executive officers of bodies corporate do not contravene civil penalty provisions

Non-compliance
  • An executive officer of a body corporate was involved in contravening a civil penalty and knew that or was reckless or negligent as to whether that contravention would occur and was in a position to influence the conduct of the body corporate and failed to take all reasonable steps to prevent the contravention
Enforcement
  • A court may set civil penalties of up to 2,000 units for each breach.
  • A penalty unit = $170
  • Late payment penalties apply in relation to each day during which the contravention continues
Outcome
  • Reduced profitability of CFI project
  • Potential reputational risk
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