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Delivery failure

12 October 2017

All Kyoto Australian carbon credit units (ACCUs) must be delivered on the dates set in the carbon abatement contract delivery schedule, and you are encouraged to take steps to ensure you meet these obligations. A delivery not made in full by the scheduled delivery date is considered a delivery failure.

If you determine that your contracted project is not able to generate sufficient units to meet your delivery schedule, you must attempt to:

  • source Kyoto ACCUs from another Emissions Reduction Fund project, or
  • purchase Kyoto ACCUs from the secondary market.

If you think that you are going to miss a delivery under contract, you should contact the Clean Energy Regulator immediately.

The Clean Energy Regulator takes delivery failure seriously, and may view multiple failures as an indicator of ineffective contract management. This can impact on our willingness to agree to revised delivery schedules or to enter into a contract with you at future auctions.

Delivery failure notice

If you have failed to deliver the set amount of Kyoto ACCUs on time, you will need to send a delivery failure notice to the Clean Energy Regulator. Delivery failure notices must include the:

  • number of Kyoto ACCUs that will not be delivered
  • reason for the failure and the steps being taken to address it
  • the anticipated duration of the failure, and
  • proposed revision to the delivery schedule.

Following notice of a delivery failure both parties must make reasonable endeavours to agree to a revised delivery schedule. The Clean Energy Regulator will generally not reduce the total amount of Kyoto ACCUs to be delivered and will not extend the contract term.

The Clean Energy Regulator will not agree to a variation and will consider market damages when:

  • we do not believe you will be able to deliver units from your project and you do not have the capacity to source these units from other projects or the secondary market, and
  • when the agreed quantity has not been delivered by the contract’s end date.

If you are having trouble managing your delivery schedule, see the Clean Energy Regulator’s interactive contract delivery schedule calculator, which will help to manage project timing requirements.

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