Crediting

More than 100 million ACCUs have now been issued under the ERF. The 100 millionth ACCU was issued to the Wilinggin Fire Project, a savanna burning project located on the Wilinggin Indigenous Protected Area in the Kimberley in Northern Western Australia. In Q3, 4.8 million ACCUs were supplied to the market, almost double the 2.5 million units supplied in Q3 2020.

A total of 561 projects are generating ACCUs (see Table 1.2). This is 11% more than the same time last year. Of these, 16 projects were credited for the first time during Q3 2021, contributing 450,639 ACCUs to supply. These 16 projects took, on average, 2.5 years to progress from registration to crediting and included 15 vegetation methods.

The 4.8 million ACCUs issued in Q3 can be attributed to 3 method types: vegetation (47%), waste (40%) and savanna burning projects (12%) (see Figure 1.3).

Projects in NSW dominated ACCU supply in Q3 with 33% of the total units issued, followed by QLD with 28%. The majority of ACCUs issued in these states were for vegetation projects (see Figure 1.4).

The outlook for ACCU supply remains positive. A total of 13.6 million ACCUs have been issued in 2021 and supply is expected to exceed the 17 million estimated for the year by the Clean Energy Regulator.

A total of 41 projects have been issued ACCUs for the first time in 2021, supplying 1.3 million ACCUs or just under 10% of the year’s supply to date.

Development of new and varied methods is also expected to unlock material volumes of supply to the ACCU market in the short term. The carbon capture and storage method and the coal mine waste gas variation are now available under the ERF after being approved in late September 2021. In November, Beach Energy Ltd and Santos Ltd registered the Moomba carbon capture and storage project which is expected to start generating a supply of 1.7 million ACCUs per annum from 2024.

Applications from 58 landfill gas projects to transition to the 2021 method variation are being assessed with a further 57 applications expected by 31 December 2021. The method variation extends crediting for these projects for a further 5 years and is anticipated to supply up to an additional 21.6 million ACCUs to the market over that period.

Projects

The ERF has passed 1000 registered projects, finishing Q3 at 1,035 projects. The registration of AgriProve’s Street Carbon Project saw the scheme reach this key milestone. This soil carbon project will run on a sheep and cropping farm at Gollan, New South Wales.

There were 54 project registrations in Q3, 10 more than the same period in 2020 (see Figure 1.5). A total of 145 projects have now been registered in 2021 compared with 87 in the same period in 2020. This increase in registrations can mainly be attributed to soil carbon projects.

Australian Integrated Carbon (AIC) registered 7 projects in the quarter, bringing its portfolio to 17 projects. This increase in registration activity by AIC in the lead up to Auction 13 resulted in optional delivery contracts being secured against 9 projects (including 2 projects registered on 1 October 2021). It also coincided with Mitsubishi’s move to acquire a 40% stake in the company.

State investment builds

The Tasmanian Government has allocated an additional $900,000 to the Landcare Action Grants Program and expanded the eligibility criteria to include carbon farming activities. This funding allocation is on top of $1.8 million previously allocated to the program. In addition, the state also unveiled the Carbon Farming Advice Pilot Rebate Program. This program is available to Tasmanian primary producers seeking advice from approved advisors on the costs and benefits of accessing carbon credits, auditing requirements, and on-ground actions that are eligible for carbon credits. The total funding allocated to the program is $250,000.

The second round of applications for the Queensland Government’s Land Restoration Fund (LRF), with up to $5 million funding available per project, closed on 8 October 2021 with shortlisted applicants to be notified in early December.

Expressions of interest to Western Australia’s $15 million Carbon Farming and Land Restoration Program closed on 20 August 2021 and preparation has begun for launching Round 2 in early 2022.

The consultation period on the Northern Territory’s Greenhouse Gas Emissions Offsets Policy has now closed. The draft policy includes a proposal to prioritise the cancellation of Territory-generated ACCUs against Territory offset requirements.

Footnotes

¹¹ Once projects are registered, they have a crediting period between 7 and 25 years depending on the method.

¹² Does not include revoked projects.