Crediting and extended accounting periods

Seven years – The crediting period is the period of time a project can apply to claim Australian carbon credit units (ACCUs).

Note that while projects are credited for activities within the seven-year crediting period, the ACCUs are issued over a longer period (usually thirteen years). The additional period is known as an extended accounting period. For further explanation, see ‘How is abatement calculated?’

Relevant section of the Act:

• Part 5

Relevant section of the Method:

• Section 19

Eligibility requirements

There are general eligibility requirements in the Act, which include:

• newness
• additionality and funding from other government programs, and
• legal right

Relevant section of the Act

• Part 3

Project activities

A project can involve a range of activities that process mixed solid waste that would otherwise have gone to landfill. The waste can be made into products, such as compost, fuel or biogas. A project can also increase the recovery of recyclable resources, such as plastics, glass and metals.

A facility must process eligible solid mixed waste that would normally go to landfill. This includes:

• commercial and industrial waste
• construction and demolition waste, and
• municipal solid waste (grouped into Class I or Class II waste).

The eligible solid waste must be processed at a purpose-built facility. This can:

• be a new facility
• expand on an existing facility, as long as adequate records of historic waste process activity are available (24 months), or
• involve a facility that is transitioning from a previous Carbon Farming Initiative project under the Alternative Waste Treatment method.

A facility must also use eligible waste treatment technology to process the waste. Examples of such technology include:

• process engineered fuel manufacture
• an enclosed composting facility (note that open windrows are permitted only as a final step to mature the compost product), or
• an anaerobic digester that collects the resulting biogas and sends it to a combustion device, such as a flare, boiler or internal combustion engine.

Relevant section of the Method:

• Sections 9 – 13

Exclusions

A project must not include the following types of waste, which would not normally go to landfill, and can be disposed or treated through other methods:

• biosolids
• putrescible waste that is separated at the point of generation
• green waste or wood waste that is separated at the point of generation
• organic waste from the livestock industry, such as straw bedding and manure mixes, and
• recyclable paper, paperboard, glass, metal or plastic that is separated at the point of generation.

Relevant section of the Method:

• Section 5

How is abatement calculated?

Abatement is calculated by subtracting the actual amount of emissions produced during your project from a baseline amount of emissions, which are the emissions that would have occurred if the project not occurred.

Factors that affect the abatement calculation include the:

• organic content of the waste
• amount and type of organic material
• amount of fuel and electricity used to run the project
• emissions the waste would generate as it breaks down in landfill, and
• emissions produced by composting or anaerobic digestion.

As organic material in waste decays in a landfill, it creates emissions for up to 100 years. To simplify the reporting process and avoid the administrative burden of reporting emissions reductions over 100 years, the method instead credits emissions reductions for each reporting period over seven years.

This is done by using ‘activity abatement portions’. To determine an activity abatement portion, the amount of abatement in a reporting period is divided by seven. One of the seven portions is used to calculate the net abatement amount for that reporting period. The other six portions accrue over the six subsequent reporting periods and are included in these reporting periods.

This means that your first offsets report will only contain one activity abatement portion (i.e. one-seventh of the emissions reductions from that reporting period). The second offsets report will contain two portions: one from the current reporting period, and one that has accrued from the previous reporting period. The third offsets report will contain three portions; one from the current reporting period, and two that have accrued from the previous two reporting periods, and so on (see Figure 1 in the Explanatory Statement).

As a result of this system, credits will continue to accrue after the end of the seven-year crediting period. These projects therefore have what is referred to as an extended accounting period:

• During the extended accounting period, you do not need to calculate any further activity abatement portions.
• You need only calculate net abatement using the previous activity abatement portions that accrue over time.

More detail on how to calculate emissions and abatement for a project can be found in the guide for the Alternative Waste Treatment method.

Relevant section of the Act:

• Section 7A, Section 69

Relevant section of the Rule:

• Section 6

Relevant section of the Method:

• Part 4

Reporting requirements

In addition to the reporting requirements of the Act and the Rule, the method also sets out the following specific requirements for offset reports:

• You must report any periods where it is not possible to meet monitoring requirements, as well as situations where the version of the National Greenhouse and Energy Reporting (NGER) (Measurement) Determination used for determining a parameter or factor is not in force at the end of the reporting period.
• In such situations, you must report the version of the NGER (Measurement) Determination or external source that was used when undertaking monitoring, the dates that the version was used and why it was not possible for you to use the version that was in force at the end of the reporting period.

Relevant section of the Act:

• Part 6

Relevant section of the Rule:

• Part 6

Relevant section of the Method:

• Section 43

Monitoring requirements

In addition to the general monitoring requirements of the Act, Section 45 in the method includes a number of further monitoring requirements. These relate to:

• the parameters used in the calculation of net abatement that require monitoring
• specifications for the procedure and frequency of monitoring
• how to derive the parameter value based on the measurements and monitoring data.

Section 46 of the method also sets out the consequences for failing to appropriately monitor certain parameters including how certain parameters must be calculated where there is not monitored data.

Relevant section of the Act:

• Part 17

Relevant sections of the Method:

• Sections 45 and 46

Record-keeping requirements

In addition to the record-keeping requirements of the Act and the Rule, projects must also meet the specific record-keeping requirements in the method. Records that need to be kept include those for the:

• amount of each type of waste received and processed
• amount of electricity, compost or other product produced
• amount of fuel and electricity used to run the project, and
• volume and methane content of biogas sent to combustion devices.

Relevant section of the Act:

• Part 17

Relevant section of the Rule:

• Part 17

Relevant section of the Method:

• Section 45

Audits

All projects receive an audit schedule when the project is declared and must provide audit reports according to this schedule. A minimum of three audits will be scheduled and additional audits may be triggered. For more information on the audit requirements, see the Act, the Rule and the audit information on our website.

Relevant section of the Act:

• Part 19

Relevant section of the Rule:

• Part 6

Specialist skills

Specialist skills may be required to carry out the project with this method. Examples of specialist skills include:

• registered professional engineer
• certified energy manager, and
• certified measurement and verification professional.

Relevant section of the Rule:

• Section 13(f)