For a project to be eligible for registration with the Clean Energy Regulator under the Emissions Reduction Fund (unless the method covering the project specifies otherwise), it must:
Eligibility under the Emissions Reduction Fund does not automatically provide approval for the project to be undertaken. If your project requires regulatory approvals or permits, these must be obtained prior to commencing your project. Emissions Reduction Fund project registration does not replace or include relevant local, state or federal approvals.
An Emissions Reduction Fund project (including projects that upgrade or expand current practices) must not have started before it has been registered with the Clean Energy Regulator, unless the method covering the project specifies otherwise.
This is because the Emissions Reduction Fund is not intended to support projects that are already underway without support from the Emissions Reduction Fund.
Applicants are required to provide evidence which satisfies the Clean Energy Regulator that the project has not begun.
Examples of actions that would indicate that a project has started:
An investment decision is a decision by the decision-making body of an organisation (for example, directors of a company) regarding how, when, where and how much capital of the organisation will be spent on investment opportunities. In the context of the Emissions Reduction Fund (ERF), this would be a decision to invest in any aspect of activity/activities as part of an ERF project). This decision often follows research to determine costs and returns for options.
Once an investment decision is made, typical practice is for relevant executives - who are authorised to bind the organisation - to execute the investment decision by entering into an agreement or other binding arrangement (for example, a work order) by which the organisation becomes committed to expenditure toward the investment.
If the nature of the power vested in the relevant executives is mechanical and administrative, such that they have no discretion whether or not to execute a particular agreement or binding arrangement for the original investment decision, the original investment decision itself will be the final investment decision.
If, however, the power vested in the relevant executives is discretionary, so that they are able to exercise further discretion about the acceptability of the terms and conditions of, or counterparties to, the agreement or binding arrangement for the investment, then the original investment decision will not be the final investment decision. The final investment decision will be the decision of those executives to enter into a particular agreement or binding arrangement for the investment. In such a case, existence of a final investment decision is evidenced by a binding agreement or arrangement encapsulating the rights and obligations of the organisation in relation to the investment.
In either case, internal allocations of funding to an investment, for example in an approved budget, does not necessarily constitute a final investment decision unless there is a legislative requirement to the contrary.
Prospective participants will need to examine their own corporate governance or legal situation regarding the point at which a recorded investment decision represents a commitment to making the investment.
Examples of actions that by themselves would not indicate a project has started:
When a project application is received the Clean Energy Regulator conducts a check and sends the applicant an email to confirm that a complete application was received. Even after this notification has been received the newness requirement will continue to apply to the project. A project must not commence before it has been registered.
A project will not be registered until an application has been fully assessed and a decision has been made by the Clean Energy Regulator. When a decision has been made by the Clean Energy Regulator the applicant will be notified of the outcome in writing.
If a project is registered and it is subsequently found, for example during an audit, that it had commenced prior to registration, the project’s registration may be invalid. In such a case, no Australian carbon credit units will be issued. If ACCUs have been issued to the project they may be required to be returned to the Clean Energy Regulator.
Project registration does not replace or include relevant regulatory approvals or permits required to carried out the project’s activities. For example, fire permits for savanna burning projects.
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.