Are you looking to undertake activities to reduce emissions from energy consuming equipment at one or more of your industrial or commercial sites?
Do you (or your staff) have an understanding of the detailed statistical, measurement and verification techniques required by this method, or are you willing to hire these skills?
If you have answered yes to all of these questions, the industrial electricity and fuel efficiency method
may be suitable for your business. Read on for eligibility and compliance details.
The industrial electricity and fuel efficiency method sets out the rules for projects that reduce emissions by improving electricity and fuel use in many different sectors. The method is activity neutral and provides flexibility for participants to determine what activities are most appropriate for their project. Some activities that could be undertaken to reduce emissions include:
Section 114 of the
Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) allows for methods to be revised and varied. This is to ensure methods continue to operate as originally intended. Variations to methods are developed and drafted by the Department of the Environment and Energy. Information on
draft methods and method variations is available on the Department of the Environment and Energy’s website.
The Clean Energy Regulator recommends making yourself familiar with proposed method variations relevant to your project should they arise, and how any changes between the original method and the varied method may affect your project plan.
You must read and understand the method and other legislative requirements to conduct an industrial electricity and fuel efficiency project and earn Australian carbon credit units (ACCUs). This includes:
This quick reference guide provides basic information about eligibility criteria and obligations that must be met to earn ACCUs from an industrial electricity and fuel efficiency project. It includes specific links to the legislation described above but should not be viewed as an alternative to reading the full legislative requirements. Additional information can also be found in the full method guide linked above.
Seven years – The crediting period is the period of time a project can apply to claim Australian carbon credit units (ACCUs). The crediting period starts from the project start date, which is nominated by the project applicant.
Relevant section of the Act:
There are general eligibility requirements in the Act, which include:
The method also requires that you have historical energy consumption data available, or that energy consumption is able to be measured before you commence the project.
Section 13 of the method also requires that specific information is included in a project application before the project can be considered eligible. You should ensure you refer to this section and provide all the required information in your application.
Relevant section of the Method:
A project involves activities that can improve the efficiency of installed energy consuming equipment, and thereby reduce emissions from that equipment. The method is technology-neutral, meaning that it does not require that a particular technology be used when carrying out activities. Examples of acceptable activities include:
A project is made up of one or more 'implementations'. An implementation is made up of one or more project activities. Due to the way baseline emissions are modelled, the number and types of activities that you can include in an implementation may be determined by whether their emissions can be jointly modelled.
For each implementation, there are three classes of equipment for which energy consumption is measured:
An implementation is said to be 'complete' when the implementation equipment has begun operating under normal conditions.
Excluded activities include:
In addition, green-fields projects that install new energy-consuming equipment 'from scratch' are also ineligible, unless they are replacing existing equipment or offsetting grid-supplied electricity use by existing equipment. This is because existing equipment is needed to calculate a baseline emissions model.
Abatement is determined by comparing baseline emissions with project (operating) emissions. Baseline emissions are those that would have occurred if there had been no equipment upgrade or replacement, while operating emissions are those produced by the upgraded or replaced equipment.
The baseline emissions are estimated using a statistical technique called regression analysis which models energy use prior to the project and uses this model to calculate the baseline emissions after the implementation has been completed. This means the baseline emission are adjusted to reflect the production conditions that are experienced in the reporting period. A thorough understanding of the requirements of the method is essential in developing baseline emissions models and avoiding zero abatement outcomes.
How operating emissions are calculated will depend on which of the sub-methods you are using:
You will need to determine which sub-method you will use when planning your project and you can only switch between sub-methods once during the project. More detailed information about the steps involved in calculating operating emissions using both sub-methods can be found in the
Using the industrial electricity and fuel efficiency method guide.
The abatement from each implementation is then calculated as the difference between baseline and operating emissions levels. At the end of each reporting period, the abatement for each implementation is added together to determine the overall level of abatement from the project.
In addition to the reporting requirements of the Act and the Rule, the method also sets out a number of method-specific requirements for offset reports.
For each implementation completed during the reporting period, you must provide:
Note that the above information is only required if it is different from the information already provided in either the project application, or a previous offsets report.
Relevant section of the Rule:
In addition to the
general monitoring requirements of the Act, projects must meet specific monitoring requirements in the method.
You must monitor variables that affect the emissions associated with the equipment to enable the development of a baseline emissions model (and for sub-method 2, an operating emissions model). The variables that you choose must be monitored for the entire duration of the project. Section 59 in the method outlines the general monitoring requirements of a project, while Section 60 and Section 61 deal with sub-methods 1 and 2, respectively.
In addition to the record-keeping requirements of the Act and the Rule, projects must also meet the specific record-keeping requirements in the method. Section 57 in the method explains that this includes records relating to the:
In addition, you must keep records identifying the location of:
All projects receive an audit schedule when the project is declared and must provide audit reports according to this schedule. A minimum of three audits will be scheduled and additional audits may be triggered. For more information on the audit requirements, see the Act, the Rule and the
audit information on our website.
Specialist skills will be required to carry out the project with the method. The emissions models must be developed using regression analysis and need to meet strict statistical requirements. A comprehensive understanding of statistics and measurement and verification techniques is therefore required. The Clean Energy Regulator recommends that you seek the services of an accredited engineer or statistician, or certified International Performance Measurement and Verification Protocol (IPMVP) professional.
Relevant section of the Explanatory Statement:
About The Clean Energy Regulator
Carbon Farming Initiative
Carbon Pricing Mechanism
National Greenhouse And Energy Reporting
Renewable Energy Target
Emissions Reduction Fund
Our Systems And Their Resources
Clean Energy Markets
Data and information
Subscribe to email updates
The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.
Follow us on Twitter
Follow us on LinkedIn