There are specific eligibility requirements for safeguard facilities looking to run new Australian Carbon Credit Unit (ACCU) Scheme projects or activities.
Safeguard facilities may be eligible to:
- run new projects that reduce non-covered emissions (other emissions)
- add new activities that reduce covered emissions to existing projects.
Eligibility requirements
These eligibility requirements were introduced with the 2023 Safeguard Mechanism reforms. Read more about the reforms on the Department of Climate Change, Energy, the Environment and Water's website.
Legislation
New projects at safeguard facilities
Projects that only reduce covered emissions at a safeguard facility will not be eligible under the ACCU Scheme.
To be eligible:
- the project must also involve abatement of other emissions, and
- the project method must include a way to calculate and separate the net abatement amount for the other emissions.
These changes to the CFI Rule came into effect on 12 January 2023.
Scenarios for new projects
These scenarios outline safeguard facility eligibility for new ACCU Scheme projects.
Facility A wants to register a project under the industrial and commercial emissions reduction method. The project reduces fuel combustion at the facility. These are covered emissions.
This project isn't eligible to be registered under the ACCU Scheme. This project may be eligible for Safeguard Mechanism credit units instead.
Facility B wants to register a project under the industrial and commercial emissions reduction method. The project involves reducing fuel combustion at the facility and reducing consumption of electricity generated by a separate undertaking or enterprise.
This project is eligible to be registered under the ACCU Scheme because:
- the project involves abatement of other emissions
- the method provides a way to calculate this abatement.
Facility C wants to undertake a project under the coal mine waste gas method. The project could involve:
- reducing fuel combustion at the facility
- reducing consumption of electricity generated by a separate undertaking or enterprise
- supplying electricity to the grid.
This project is eligible to be registered under the ACCU Scheme because:
- the project involves abatement of other emissions including displacement abatement from supplying electricity to the grid
- the method provides a way to calculate this abatement.
Company A wants to undertake a project under the alternative waste treatment method. It would construct a new facility to divert waste from multiple landfills. One of the landfills is a safeguard facility.
In this case, the alternative waste treatment project would generally not be eligible to registered as an ACCU Scheme project.
The project would only be eligible under the ACCU Scheme if:
- the waste from the safeguard facility landfill is treated separately by the alternative waste treatment facility to the other waste, and
- the abatement from diverting that waste isn't included in the net abatement calculations for the project.
Local Council A wants to undertake a project under the source separated organic waste method to separate organic waste where it's created. The waste is currently only being disposed of in a landfill that is also a safeguard facility.
The project isn't eligible to be registered under the ACCU Scheme because it involves emissions that would have been created at a safeguard facility.
Facility D is a safeguard facility that wants to undertake a project under the 2021 soil carbon method. The project involves sequestering carbon on land owned by the facility.
This project is eligible to be registered under the ACCU Scheme. This is because the project doesn't directly involve emissions from the operation of the facility.
New activities for existing projects at safeguard facilities
During their crediting periods, existing ACCU Scheme projects that reduce covered emissions at a safeguard facility may be eligible to add new project activities.
You must meet one of the following requirements for your new project activity to be eligible:
- You began to undertake the new project activity before 6 May 2023. This could include:
- making a final project investment decision
- acquiring or leasing a tangible asset (other than land or a minor asset) for use for the project
- starting construction work for the project.
- You specifically described the new project activity in your application to register the project.
- Your new project abates a safeguard facility's covered emissions, where another project activity that resulted in carbon abatement of the same facility’s covered emissions has been undertaken, or has begun to be undertaken, and that activity was described in the application to register the project. All activities must be described in the application to register the project.
- Your new project activity reduces other emissions. The project's method provides a way to work out the net abatement amount for the project, separate to the abatement of covered emissions.
A description of the activity in the application to register must include specific details about:
- the project activity, including the location
- the type of equipment involved
- how the activity would result in carbon abatement in line with the relevant method.
These changes to the CFI Rule came into effect on 6 May 2023.
Scenarios for new activities in existing projects
These scenarios outline safeguard facility eligibility for adding new activities to existing ACCU Scheme projects.
Scenario 1
Facility A is a biscuit factory operating 10 industrial ovens. Before 12 January 2023, the company registered an ACCU Scheme project under the industrial and commercial emissions reduction method to upgrade 5 of its ovens (Ovens 1–5) to make them more energy efficient. This project will reduce Facility A’s covered emissions.
The project proponent decides to also upgrade ovens at Facility B to abate Facility B’s covered emissions. Facility B is also a safeguard facility. The project proponent isn't eligible to claim abatement from the project activities at Facility B because they aren't occurring at the same facility as the old project activities.
The project proponent decides to also upgrade Ovens 6–10 during the crediting period of the project. If the project proponent submits a crediting application for upgrades to Ovens 1–5 and Ovens 6–10 in the same reporting period, the upgrades to all 10 ovens are eligible for Australian carbon credit units (ACCU). If the crediting application also includes upgrades to its biscuit-packaging machinery in the reporting period, all 3 activities are eligible for ACCUs. This assumes the upgrades to Ovens 6–10 and the packaging machinery are eligible activities under the method.
The 'old activity' is the upgrades to Ovens 1–5 and the 'new activity' is for upgrades to both Ovens 6–10 and the packaging machinery.
Relevant legislation
- Paragraph 9, subsection (9)(a) and (b) of the CFI Rule