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Eligible interest holder consent

17 June 2015

If you are applying to register an area-based emissions avoidance project or a sequestration project under the Emissions Reduction Fund, you must seek the consent of any persons or organisations holding an eligible interest in the land on which your project will run.

What types of projects require eligible interest holder consent?

There two types of projects conducted under the Emissions Reduction Fund where a project owner will require eligible interest holder consent:

  • Emissions avoidance projects prevent greenhouse gas emissions from entering the atmosphere.
    • An area-based emissions avoidance project is a project that avoids emissions of greenhouse gases from the burning of savannas. It also applies to any other emissions avoidance project where it is necessary to determine the size of an area in order to work out the amount of abatement for the project.
  • Sequestration projects store carbon in soil or in plants as they grow.
    • Sequestration projects affect the future use of land for up to 25 or 100 years, depending on the permanence period nominated by the project owner.

Who is an eligible interest holder?

An eligible interest holder under the Emissions Reduction Fund is a person or organisation that has a specific legal interest in the land on which a project is being, or will be, conducted. A complete listing of eligible interest holders is provided in sections 43 to 45A of the Carbon Credits (Carbon Farming Initiative) Act 2011.

The number and type of eligible interest holders will vary depending on the nature of the land title and project type, but will generally include those persons or organisations listed on land titles as having an interest in the property. These persons and organisations may include, but are not limited to, financial institutions that hold a mortgage over the land, registered native title bodies corporate, or in the case of Crown land, the relevant Minister.

How do I prove consent?

Owners of area-based emissions avoidance or sequestration projects must seek the consent of eligible interest holders and submit to the Clean Energy Regulator signed consent forms from each eligible interest holder.

A signed eligible interest holder consent form is a legal document. It confirms that eligible interest holders understand the details of the proposed project, including any risks and benefits to them resulting from the project.

If a project owner has not obtained signed consent forms from each eligible interest holder before submitting their project for registration, only conditional registration will be granted.

If a project is granted conditional registration, the project owner must obtain signed eligible interest holder consent forms before they submit their first project report. Failure to do so may result in the project owner not receiving Australian Carbon Credit Units (ACCUs).

An eligible interest holder consent form is not required from a party to an indigenous land use agreement if that agreement includes consent for the project activities to be carried out on the project land. If that consent is set out in a registered indigenous land use agreement, then for so long as the project is registered as an Emissions Reduction Fund project details of the agreement must not be removed from the Register of Indigenous Land Use Agreements without the written consent of the Clean Energy Regulator.

What is not covered by giving eligible interest holder consent?

Giving of consent by an eligible interest holder does not:

  • mean the eligible interest holder will automatically be responsible for restoring carbon stocks should they be lost
  • prevent the land on which the project is taking place from being transferred or sold
  • establish a legal right to undertake the project
  • assign carbon sequestration rights to the project owner
  • demonstrate permission to run a project on land owned by the person or entity holding the carbon sequestration right
  • prove that the proposed area-based emissions avoidance project or sequestration project is eligible or viable for participation in the Emissions Reduction Fund
  • transfer ownership of the proposed project to the eligible interest holder
  • establish commercial arrangements for allocating future ACCUs with the eligible interest holder
  • prevent the project proponent from withdrawing from the Emissions Reduction Fund at any time.

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