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Animal effluent management method

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17 June 2022

Is the animal effluent management method suitable for your business?

  • Are you thinking about introducing a new method of processing and treating animal effluent from a piggery or dairy?
  • Would the effluent have otherwise gone to an anaerobic pond?
  • Are you thinking of treating the effluent by either:
    • Capturing methane in a digester tank or covered pond and then
      • destroying the methane by flaring or generating electricity, or
      • turning the methane into biomethane, a natural gas substitute, or
    • avoiding methane emissions by removing volatile solids and treating them using an aerobic process?

If you have answered yes to all these questions, the Carbon Credits (Carbon Farming Initiative—Animal Effluent Management) Methodology Determination 2019 (the Method) may be suitable for your business.

The animal effluent management method provides an incentive for piggeries and dairies to develop new facilities for the treatment of animal effluent by emissions destruction, emissions avoidance or both. The method also provides incentive for producing biomethane from biogas created by the treatment of animal effluent. Where this treatment can reasonably be expected to result in fewer emissions than if the effluent were treated in an anaerobic pond, it may be eligible to be an animal effluent management project.

This means the project can earn Australian carbon credit units (ACCUs), which can be sold to the Australian Government or the rapidly growing private market.

A project using this method involves using a treatment facility (which becomes known as a project treatment facility when used in an animal effluent management project) to manage organic effluent by emissions destruction, emissions avoidance, biogas generation for biomethane, or through a combination of all or some of these mechanisms. A project involving biomethane production also involves biogas upgrading systems that refine biogas into biomethane.

A facility treats animal effluent by emissions destruction if it generates and captures biogas from the effluent using an anaerobic digester and destroys the methane in the biogas using a combustion device such as a flare or generator.

A facility treats animal effluent by emissions avoidance if it removes volatile solids using a solids separation diversion method. It deals with the material aerobically in a way that produces fewer emissions of methane and nitrous oxide than if the effluent were treated in an anaerobic pond, such as an open pond. This is done through a method of stockpiles (solid storage, the storage of solid material in a heaped pile that is not turned) or composting (passive windrow, the storage of solid material in a pile or line of heaped material that is passively managed). More detail on the requirements of these treatments is set out below.

A facility treats animal effluent by biogas generation for biomethane if it generates and captures biogas from the effluent using an anaerobic digester and sends that biogas to be upgraded into biomethane. Upgrading biogas into biomethane is an activity known as biomethane production. The facility at which biomethane production occurs is known as a project biomethane facility, which may be the same as a project treatment facility or be located at a separate site. Biomethane produced by the project must be combusted as a natural gas substitute within Australia.

Each project treatment facility must treat animal effluent and may also treat other effluent or waste material consistent with the requirements of the method. However, project proponents should be aware that treatment of ineligible material in treatment facilities may result in fewer or no credits being issued for the reporting period.

The method specifies that facilities, including project biomethane facilitires, for an animal effluent management project must not be pre-existing at the date of application, unless you are varying from an older method or are restarting biomethane project under the method. However, the following exceptions apply:

  • Project facilities that have operated as part of a pilot or trial project (please contact the Regulator if you wish to use this option); or
  • Project facilities that have a solids separation device present at the site of the project on 1 January 2019, that has not been used during the three previous years before application and has not been used since 1 January 2019.

Before registering a project under this method, you should understand the basic steps to participating in the Emissions Reduction Fund.

2022 animal effluent management variation

The animal effluent management method variation came into effect on 2 January 2022. The animal effluent management method was varied to:

  • introduce new eligible project activities to allow projects to upgrade biogas into biomethane that can be used as a natural gas substitute
  • allow projects to claim abatement associated with producing biomethane for use that results in destruction of waste methane, known as conversion abatement
  • allow projects to claim abatement associated with producing biomethane that displaces natural gas use, known as displacement abatement.

If you have a current animal effluent management project, you may be able to transfer your project to the varied version of the method. Apply to transfer your project through the Client Portal.

Varying from an existing method

The animal effluent method has been designed to replace the following methods:

If you have a project under one of the above closed methods, you may be able to vary your project to this method or you can choose to stay under your method. 

Project activities

Under the animal effluent management method, project activities may consist of one or more of the following:

Emissions destruction:
  • generate biogas from organic effluent in an anaerobic digester, either with a covered pond or digester tank; and
  • capture and destroy the methane component of the biogas from the organic effluent by either flaring it or generating electricity.
Emissions avoidance:
  • remove material that includes volatile solids (diversion of the material); and
  • treats the diverted material aerobically in a way that produces materially fewer total methane and nitrous oxide emissions than would be produced by treatment in an anaerobic pond (a post diversion treatment).
Biogas generation for biomethane:
  • generate biogas from organic effluent in an anaerobic digester, either with a covered pond or digester tank; and
  • send the biogas from the organic effluent to a biogas upgrading system to be upgraded into biomethane.
Biomethane production:
  • receive biogas; and
  • upgrade that biogas in a biogas upgrading system to produce biomethane that is combusted as a natural gas substitute within Australia.

Legislative requirements

You must read and understand the method and other legislative requirements to conduct an animal effluent management project and earn ACCUs. This includes:

Tools and resources

Quick reference guide to the animal effluent method

This quick reference guide provides basic information about eligibility criteria and obligations that must be met and demonstrated to the Clean Energy Regulator to earn ACCUs from an animal effluent management project. It includes links from the legislation described above but should not be viewed as an alternative to reading the full legislative requirements.

​Contents


​Project activities

An animal effluent management project can involve activities that destroy or avoid emissions or activities that do both. Each activity is carried out through a project treatment facility that will process animal effluent, with or without other organic effluent that would otherwise have gone to an anaerobic pond.

Emissions destruction facilities:
  • Must use one or more anaerobic digesters to generate and capture the biogas, and one or more combustion devices, such as a flare, boiler or internal combustion engine, to destroy the methane component of the biogas.
  • Projects should adhere to existing work-place health and safety, biohazard and other legislation, industry Codes of Practice and Guidelines when handling and transporting effluent in order to minimise the occurrence of adverse environmental impacts.
  • Emissions destroyed are determined from the amount of biogas that is methane that has been captured and destroyed, or the amount of electricity generated as a result of the destruction of methane.
  • There must be complete combustion of methane in each combustion device that is operated as part of the project. The Method defines complete combustion as 98 per cent or more of the methane; or a lower percentage if specified by the Supplement.
  • Special requirements apply to flares, including that it has a monitoring and control system as defined in the Method.
Emissions avoidance facilities (in accordance with any requirements set out in the Supplement):
  • Must use a solids separation treatment method of diversion to separate the volatile solids component from the effluent, which will generally rely on a gravitational process and/or a mechanical device such as:
    • Gravitational settling
    • Perforated screens and presses
    • Centrifugal separation
    • Dissolved air flotation
    • Chemical flocculation
    • Combined systems
  • Project proponents must use the solids separation devices in a manner consistent with the manufacturer’s requirements and any other regulations.
  • Must apply a post-diversion treatment through:
    • a method of stockpiles (solid storage); or
    • a method of composting (passive windrow).
  • If the post-diversion treatment results in anaerobic creation of methane it would not be eligible under the Determination.
  • Ineligible material of any amount must not be combined with eligible material or the abatement amount will be set to zero.
Facilities that undertake biogas generation for biomethane and biomethane production:
  • Must use one or more anaerobic digesters to generate and capture the biogas, and send that biogas to a biogas upgrading system to be upgraded into biomethane.
  • Biomethane produced by the project must be sent to an end use where it can reasonably be expected to be combusted within Australia as a natural gas substitute. Consumption of biomethane could occur on-site, or may involve transport to another gas consumer or injection into gas pipelines for general consumption.
  • Conversion abatement is calculated based on the quantity of methane upgraded into biomethane. This methane is considered to be destroyed when the biomethane is combusted as a natural gas substitute.
  • Displacement abatement is calculated based on the quantity of biomethane produced, on the basis that it serves as a one-to-one substitute for natural gas.
​Eligible material

Eligible material consists of organic effluent that would normally be treated in an anaerobic pond. Eligible material must be produced by either an eligible animal facility (defined in section 5) or a facility that produces a particular type or types of material as a waste stream.

If the organic effluent is not animal effluent from an eligible animal facility, then it must meet all the following:

  • the organic effluent must predominately consist of material of one or more listed types (See Schedule 1 - Supplement); and
  • if it includes material that is not of a listed type, that material cannot contribute more than 2 per cent of the methane avoided or combusted by the project over the reporting period; and
  • the effluent was not diverted from a facility that is part of an eligible offsets project related to the avoidance of methane emissions.

If the material does not meet the above, then it will be treated as ineligible material.

Biogas that comes from a non-project source that is sent to be upgraded into biomethane as part of the project has separate eligibility criteria, discussed in more detail in the documentasset:biomethane method package simple method guide.


Exclusions

Ineligible material consists of material that is not eligible material. In practice, it is expected that ineligible material will be included in project facilities only in small quantities, such as incidental amounts of feed waste, and where the cost or inconvenience of separating it from the eligible material would outweigh the likely loss of abatement credits.

At an emissions avoidance facility, ineligible material must not be combined with eligible material for treatment under section 16 or the net credited abatement will be zero, in accordance with section 21 of the Method. This applies whether or not the project facility also undertakes emissions destruction. Non-compliance can result in no abatement being credited for a reporting period.

At an emissions destruction facility or facility undertaking biogas generation for biomethane, ineligible material may be combined with eligible material for treatment only if the following conditions are met:

  • The ineligible material, when combined with the eligible material, has no significant adverse effect on the operation and performance of the project facility. A significant adverse effect includes exacerbating fugitive emissions, or serious adverse secondary environmental effects such as odour.
  • Before any ineligible material is combined with the eligible material, the quantity of the ineligible material has been measured, and the ineligible material is either material of a listed type or has had its methane-producing capacity measured in accordance with the Supplement. The volume of methane attributable to any inconsistent ineligible material totals less than 5 per cent of the methane attributable to all the material (both eligible and ineligible) entering the project facility during the reporting period.
  • Ineligible material is defined as inconsistent if its methane-producing capacity, measured in accordance with the Supplement, varies by more than 40 per cent between each measurement.

Section 21 provides that if, during the reporting period, a project facility does not comply in all material respects with regard to the requirements for the use of ineligible material (section 16 of the Method), then the net abatement is taken to equal zero.

The method does not include a cap on the amount of ineligible material that can be added to an emissions destruction project. This is because methane emissions from ineligible material are deducted from the gross abatement. Accordingly, if a higher proportion of ineligible material is treated by a facility, this may result in zero credited abatement.

​Eligibility

To be eligible to run a project, you must meet the general eligibility requirements under the Emissions Reduction Fund scheme and have the legal right to carry out the project. You must also meet the method specific eligibility requirements. These are:

  • You must identify and provide information about the facility in the application to register the project.
  • The facility or biogas upgrading system must not be pre-existing unless it is part of a trial or pilot project, or if it consists of a solids separation device which has not been used for the specified time. A further exemption is when you are varying your method from an older effluent management method.
  • At least one eligible animal facility, being the source of the animal effluent, must be identified in the project application. New sources can also be added later.
  • You must provide details showing how the material from the facility or other source is expected to be eligible material in the application to register the project.
  • You should also be aware that no ineligible material may be used in an emissions avoidance treatment method, and that for emissions destruction, if a high proportion of ineligible material is used then credited abatement may be zero.
  • The effluent must otherwise have been treated, or was going to be treated, in an anaerobic pond. Evidence to demonstrate that the effluent would have been treated in an anaerobic pond must be supplied with the application to register the project.

In addition, there are specific requirements for each type of treatment facility in sections 9B, 9C and 9D of the method.


​Crediting periods

The crediting period is the period a project can apply to claim Australian carbon credit units (ACCUs).

For this method, projects that generate electricity can have up to a 7-year (84 month) crediting period. The crediting period will end once the project enters the 85th calendar month of electricity generation. Projects that do not generate electricity, including projects that flare only, have a 12-year crediting period. Projects can flare only and then generate electricity, but the crediting period will end once the project has generated electricity for 7 years (84 months).

Projects that produce biomethane have a crediting period of 12 years, less any time the project has previously earned ACCUs for methane destruction. Further details on crediting periods for biomethane projects, including restarting biomethane projects, can be found in the documentasset:biomethane method package simple method guide.

For projects transitioning from another method, for example, the other piggery methods - the calculation of the months of generation includes the calendar months that were part of the project’s crediting period or periods on earlier methods.

A summary of the crediting periods is set out in the tables below:

Transitioning Projects

ActivityCrediting PeriodFrom
Flaring onlyBalance of 12 yearsStart of current crediting period
Heat GenerationBalance of 12 yearsStart of current crediting period
Electricity GenerationBalance of 84 months of generation (a minimum of 7 years to a maximum of 12 years from start of current crediting period)Start of first crediting period OR first demonstrated date of generation*
Biomethane conversion and displacementBalance of 12 yearsStart of current crediting period

New Projects

ActivityCrediting PeriodFrom
Flaring only12 yearsStart of crediting period
Heat Generation12 yearsStart of crediting period
Avoidance only12 yearsStart of crediting period
Electricity Generation84 months of generation; up to 12 years*Start of crediting period OR first demonstrated date of generation
Combined activities with Electricity Generation84 months of generation; up to 12 years*Start of crediting period OR first demonstrated date of generation
Biomethane conversion and displacement12 yearsStart of crediting period
Biomethane displacement-only12 yearsStart of crediting period

* The 84 months of electricity generation is cumulative, not necessarily consecutive. Electricity is presumed to begin in the first crediting month and once generated in a month, generation is presumed to continue in subsequent months unless evidence is provided to the contrary. Electricity is considered to be generated in a month if it is generated for 3 or more days in a calendar month.


​How is abatement calculated?

Abatement is calculated by finding the amount of emissions destroyed or avoided, then subtracting emissions from ineligible material and project emissions, such as from the use of fuel or electricity.

Factors that affect the abatement calculation of emissions destruction, biogas generation for biomethane, and biomethane production projects include:

  • the emissions resulting from the combustion of ineligible material; and
  • all project emissions of methane, nitrous oxide and carbon dioxide from fuel use and electricity use resulting from undertaking the project.

For further information about calculating net abatement for biomethane project activities, read the documentasset:biomethane method package simple method guide.

Factors that affect the abatement calculation of emissions avoidance projects include:

  • all project emissions of methane, nitrous oxide and carbon dioxide from fuel use and electricity use; and
  • methane and nitrous oxide produced as a result of the post-diversion treatment of material.

Reporting requirements

All scheme participants must submit project reports to the Clean Energy Regulator throughout the crediting period of their project. Each project report must cover successive periods of no longer than 2 years, referred to as reporting periods.

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

  • You must comply with the specific reporting requirements that are applicable to your project. These requirements are detailed in sections 34 to 34B of the method. The specific requirements relate to the type of activity being conducted by the project, as well as requirements for the initial offsets reports and reporting of changes that have occurred since the initial offsets report.
  • 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 2008 (the 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.

​Monitoring requirements

In addition to the general monitoring requirements of the Act, the method includes several additional monitoring requirements. These relate to:

  • the variable parameters used to calculate the carbon dioxide equivalent net abatement,
  • the equipment or devices used to determine or measure those parameters, and
  • requirements for the equipment or device used to monitor a parameter to be calibrated by an accredited third-party technician in accordance with the manufacturer’s specifications.

The method also sets out the consequences for failing to appropriately monitor certain parameters, including how certain parameters must be calculated where there is a non-monitored period.

​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.

Section 37 of the method sets out the requirements of a quality assurance plan, which:

  • reflects the operation, maintenance and equipment calibration requirements of the manufacturer or installer of all project equipment,
  • includes all records of eligible material and the treatment of ineligible material,
  • defines the parameters that will be monitored, the methods to be used and the frequency of monitoring, and
  • demonstrates evidence of compliance with applicable laws and codes of practice in the transport of materials and operation of the project facility.

The quality assurance plan must be submitted to the Clean Energy Regulator by no later than submission of the first offsets report for the project. If the Clean Energy Regulator notifies you that it is not satisfied with the quality assurance plan, you must amend that plan as soon as practicable after being notified to address the issues identified.

Sections 38 - 39C outline the records that need to be kept include:

  • all maintenance records for all project equipment,
  • logs of operation of the combustion device in emissions destruction projects including a record of significant shut-downs, start-ups, failures and process adjustments,
  • evidence of corrective measures taken if monitoring instruments do not meet the accuracy threshold specified in the Supplement,
  • number, type, serial numbers and size of emissions avoidance or emissions destruction devices, and
  • evidence of compliance with the calibration of equipment of a device by an accredited third-party technician in accordance with the manufacturer’s specifications.

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 general audit requirements for participating in the scheme.

​Specialist skills

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

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

Method variations

The Clean Energy Regulator develops variations to methods for a range of reasons including:

  • to implement an ERAC decision to extend the crediting period of a method
  • to ensure methods continue to operate as originally intended
  • to account for technological advances that enable new measurement approaches.

Methods being varied or methods under review are published on the Department of Industry, Science, Energy and Resources (DISER) website and our method consultation page.

The method variations page provides additional information about how a method variation might affect an existing project.

Method development process

The variations to the landfill gas (generation) method, the domestic, commercial and industrial wastewater treatment method, and the animal effluent management method that comprise the biomethane method package, were made by the Minister in January 2022.

For information on public consultation and consideration of the method by the Emissions Reduction Assurance Committee (ERAC), visit the biomethane method page on the Department of Industry, Science, Energy and Resources’ consultation hub.


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