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Climate Solutions Fund > How it works > Explore project types > Alternative waste treatment projects

Alternative waste treatment projects

An alternative waste treatment project processes commercial, construction and household waste to prevent the release of methane into the atmosphere. This reduction in emissions earns Australian carbon credit units (carbon credits). 

Diversified revenue

Carbon credits provide another income stream for your business.


Reduce landfill

Separating waste reduces the amount entering landfills.


Create bioproducts

Treated waste can produce useful bioproducts, such as compost or fuel.


Environmental action

Be recognised for your contribution to Australia’s emissions reductions.

Help with these projects

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The basics

Introduction to alternative waste treatments, how they work and their eligibility requirements.

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The details

Further information and resources on alternative waste projects can be found under the Emissions Reduction Fund.


How these projects work

Organic matter decomposing in landfills produces gases such as methane, a potent greenhouse gas, which are released into the atmosphere. An alternative waste treatment project involves reducing emissions by diverting waste from landfill to a new or expanded treatment plant to be processed into products such as compost, biogas or fuel.

You earn carbon credits for the reduction in methane emitted compared to if the waste had been sent to landfill (measured in carbon dioxide equivalent). The amount of methane that would have been captured and combusted if the waste had been sent to landfill is accounted for based on the average percentage captured in each state or territory.

Companies or organisations most suited to running a project are those that receive mixed solid waste, for example waste management businesses or local governments.

Project activities

You can treat waste and reduce emissions through the following activities:

Composting — using an enclosed composting system e.g. composting tunnels to turn organic material into compost.

Capture and combustion — using an anaerobic biodigestion system e.g. covered anaerobic lagoon or plug-flow reactor to break down organic material and produce methane, which is then captured and combusted.

Fuel manufacture — processing organic material to produce a combustible solid fuel product that can be used as a substitute for conventional fossil fuels.

Eligibility requirements

To be eligible you must:

  • Receive eligible waste. Waste is eligible if it is mixed solid waste generated by the domestic (e.g. household and council collections, commercial and industrial (e.g. retail, hospitality or manifesting) or construction and demolition sectors.
    • Mixed solid waste is often made up of items such as food, paper and cardboard, garden and park waste, wood, textiles, sludge, metals, glass, plastic, and masonry materials.
    • Waste is ineligible if:
      • It contains recyclables such as paper, glass, metal or plastic or green and wood waste that is where it is generated (e.g. household recycling containing a combination of paper, glass, metal and plastics).
      • It is livestock waste (e.g. straw and manure mixes) or biosolids.
  • Have records of receiving eligible waste — If you are expanding the capacity of an existing waste treatment plant, you will need to provide us records for the previous two years.
  • Establish legal right (the right to run your project and claim carbon credits) — for example, by having permission from the waste-receiving organisation to undertake the project activities.
  • Obtain regulatory approvals required to run your project and ensure project activities are not required to be carried out under a Commonwealth, state or territory law.
  • Make sure your project is new — you need to either start a new waste treatment plant or expand an existing one.

Running and reporting on your project

As part of registering a project, you will need to describe your proposed activities, provide records and calculate your expected carbon credits.

There are operating, reporting and audit obligations in running an alternative waste treatment project. You will receive carbon credits each time you report calculated project emissions reductions during the first seven years of the project. Note that these carbon credits will be issued to you over a 13-year period. You will need to continue to report on your project at least every two years over the 13 years.

Relevant legislation and resources

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