In 2023, schemes we administer reduced emissions by 65.5 million tonnes of carbon dioxide equivalent (CO2-e). This is 5.5% more than the 62.1 million tonnes of CO2-e reduction in 2022. We estimate another 8.1% increase in emissions reduction in 2024, up to 70.8 million tonnes of CO2-e across the CER schemes.
In 2023, the Australian Carbon Credit Unit (ACCU) Scheme (formerly known as the Emissions Reduction Fund) issued ACCUs equivalent to 17.2 million tonnes of CO2-e emissions abatement. This is 3% less than 2022. This is based on one ACCU being equivalent to one tonne of CO2-e. Noting, the carbon abatement for each ACCU may have occurred in prior years due to a lag from the crediting process.
In 2023, the Renewable Energy Target (RET) contributed 48.3 million tonnes of CO2-e emissions reduction, a 9% increase from 2022. Of which:
- 29.3 million was from the Large-scale Renewable Energy Target (LRET)
- 19.0 million was from the Small-scale Renewable Energy Scheme (SRES).
This is based on multiplying megawatt hours (MWh) of renewable energy, that is incentivised by the RET, by the declining emissions intensity of the grid. The RET added an additional 7.9 million MWh of renewable energy to the grid in 2023 compared to 2022. Renewables produce zero emissions. This means as renewable energy is added to the grid, the emissions intensity of the grid declines. In 2023, the emissions intensity of the grid was 0.58 tonnes of CO2-e per MWh. In comparison to 0.70 tonnes of CO2-e per MWh in 2019, when we first produced this analysis.
If a 100% renewable grid is achieved, using the above method, renewable generation would contribute zero additional emissions reduction. This is because in a 100% renewable grid there would be an emissions intensity of zero. To assess the emissions reduction from renewable generation as it increases its share of generation, an alternative methodology would be to consider the generation that is being displaced by additional renewable energy.
We will continue to refine our approach to assessing the impact of the schemes we administer on emissions reduction. In particular as Safeguard baselines begin to decline in 2024.
Emissions reductions using a displacement method
Using a displacement method, the schemes we administer contributed 95.9 million tonnes of CO2-e emissions reduction in 2023. In 2024, we expect this to increase to 109.5 million tonnes of CO2-e emissions reduction.
This is based on multiplying the MWh of renewable energy by the emissions intensity of thermal generation. This estimate assumes renewables are displacing thermal generation. Thermal generation uses fossil fuels, such as coal and gas, as a fuel source. In 2023, we estimated the weighted average emissions intensity factor for thermal generation to be 0.94 tonnes of CO2-e per MWh. In comparison to 0.58 tonnes of CO2-e per MWh for all types of generation in the grid.
A methodological overview of these estimates is available in the Q3 2021 Quarterly Carbon Market Report (QCMR). Noting, the thermal displacement method was previously referred to as the ‘avoided emissions’ method.
Description
This figure shows the estimated emissions reduction from the 3 schemes administered by the CER in tonnes of carbon dioxide equivalence (t CO2-e) over time.
This figure is interactive. Hover over/tap each segment and along the line to see the estimated emissions reduction. Click/tap on the items in the legend to hide/show data in the figure.
Small print
A methodological overview of the emission reduction estimates is provided in the Q3 2021 QCMR.
The 2023 emission intensity of the National Energy Market (NEM) is sourced from OpenNEM. For the SRES carbon content, the estimated generation is based on the installation year only.
The ACCU Scheme estimate is based on ACCUs issued in each calendar year, this may include abatement that has occurred in prior years due to the lagged nature of the claiming process.
Annual values may change over time due to updated generation, scheme information and minor revisions to the methodology.