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Dividing a project into parts for separate reporting

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02 May 2018

Emissions Reduction Fund projects can be divided into parts for the purposes of reporting. This allows participants to submit a project report and apply to be issued with Australian carbon credit units (ACCUs) for parts of the registered project.

The extent to which a registered project may be divided is set out in Section 77A of the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act), and the applicable Emissions Reduction Fund method.

When a project is divided into separate parts, the participant may report on each part of the project as though they are an independent project, with each separate part having the same conditions, if any, and the same obligations for reporting and compliance.

How to divide a project

A participant may divide a project by providing the Clean Energy Regulator with a written notice by email to enquiries@cleanenergyregulator.gov.au. Each notice should include:

  • The project name and Emissions Reduction Fund reference code for the project that is to be divided.
  • The period for which the project will be divided with specific start and end dates. The end of the division period must be after the date the notice is given. The dates must be within the project’s crediting period.
  • The total number of parts the project will be divided into.
  • Details of which sites will be in which part of the divided project such that each part can be easily identified. If the project is an area-based offsets project, a scaled map identifying the project area for each part.
  • Details of how the division meets the applicable Emissions Reduction Fund method requirements.

A project can be divided at any time during its life, however the division must be for a period that ends in the future and must not include time for which the project has already been reported.

For example, a project with a crediting period start date of 1 January 2017 has submitted its first offsets report for a period covering 1 January 2017 to 28 February 2018. A notice to divide your project into parts on 1 May 2018 cannot specify that the division:

  • starts on or before 28 February 2018 because that period has already been reported on, or
  • ends on or before 1 May 2018 because the division end date must be in the future.

Once a valid notice has been received, the Clean Energy Regulator will respond:

  • confirming that the notice is valid and that the project has been divided into specific parts for the specified period
  • detailing how to report on each part of the project through the Clean Energy Regulator client portal, and
  • confirming how the project’s audit schedule applies to each project part, if applicable.

Division of conditional projects

If a project registration is conditional on receiving relevant regulatory approvals or consents at the time the project is divided, each part of the project will be considered to be conditional and subject to the same conditions. Following the division, if a condition is satisfied the participant may apply to remove the condition from a specified part of the project. If conditions are satisfied for a part of the project prior to the end of the first reporting period, a certificate of entitlement may be issued for that part of the project, however the other parts must still satisfy any relevant conditions before a certificate of entitlement can be issued for those parts of the project.

If any part of the project is still subject to conditions at the end of the specified period, if the project is ‘recombined’ the project will be treated as conditional. The conditions on the project must be removed before ACCUs can be issued.

Considerations for participants

Dividing a project into parts will also result in some additional obligations, as each separate part of the project must comply with all requirements of the CFI Act, CFI Rule and applicable method. Participants should consider whether or not dividing their project is suitable for their particular circumstance and seek appropriate professional advice.

Considerations could include:

  • Each part of the project will have independent reporting requirements, potentially on different timelines.
  • Dividing a project into separate parts may result in additional audits being required, especially where a project is divided before the end of the first reporting period for the overall project as an initial audit will be required for each separate part.
  • If a project is divided, and subsequently recombined, care will need to be taken to ensure that there is no gap between offsets reports.
  • Record keeping requirements for the project must be met and include record keeping for each part.

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