To be a project proponent for an Australian Carbon Credit Unit (ACCU) Scheme project, you must have the legal right to carry out the project.
Once you've decided to run a project and identified the project area you need to:
- establish legal right
- obtain eligible interest-holder consents.
Key takeaways
- Project proponents must have the legal right to carry out the project
- A project can't be registered unless legal right has been shown
- Stakeholders of a project may include landowner or leaseholders, native title holders and service providers
- The project proponent must maintain legal right for the whole project
- Evidence of legal right can be contracts, agreements, lease terms, Indigenous land use agreements or permits
About legal right
You are responsible for ensuring you have the legal right to carry out your project. This means you have:
- the right to carry out the project activities on the sites included in the project area
- the lawful and exclusive right to receive all ACCUs that may be created through project activities.
You must maintain legal right for the life of the project. This usually means 7 years for emissions avoidance projects and 25 years for sequestration projects.
If you lose legal right, we may:
- revoke the project
- require you to relinquish ACCUs
- issue a carbon maintenance obligation (for sequestration projects).
Native title and legal right
Native title refers to the rights and interests First Nations people have in land and waters based on their traditional laws. Even if these rights haven't been officially recognised by a court, they may still exist.
If you're planning an area-based project where native title claims exist, there are legal implications under the Carbon Credits (Carbon Farming Initiative) Act 2011 and Native Title Act 1993. Native title claims may affect your legal right to carry out your project.
If you hold native title and want to run a project or are approached by another ACCU participant, you should:
- check the guidelines on native title, legal rights and consent
- consider the project's cultural and legal aspects
- seek professional advice.
To check if a project area overlaps with land subject to native title, use the National Native Title Tribunal’s Native Title Vision1 (NTV) mapping tool.
When you must demonstrate legal right
You need to establish legal right before you can register a project. You will need to demonstrate your legal right:
- when you register the project
- if you want to vary a project
- with project offsets reports.
You must provide evidence that you hold or have acquired legal right through a written agreement, such as a commercial contract. You also need to maintain records showing how you have, or obtained, legal right to carry out the project. This includes the steps you took, any advice received and who you consulted with.
During audits, you may have to provide evidence of legal right, eligible interest-holder consents and regulatory approvals.
Eligible interest-holder consent
For area-based emissions avoidance or sequestration projects, you also need to seek consent from any person or organisation that has an eligible interest in the land the project will run on.
Find out more about eligible interest-holder consents.
Obtaining legal right
How you can obtain legal right will depend on the circumstances of your project.
You will need to establish who has legal interest in the project area and whether that interest gives them a right to carry out project activities. You can do this by considering all the stakeholders involved or affected by the project, such as owners, lessees, and service providers. The legal right is determined by the arrangements between them:
- Site or landowner: the person that holds the title to the land that the activity is being undertaken on.
- Lessee: the person renting a site or asset under a written lease from the owner (lessor).
- Service provider: a party that will run, or help run, the project. Usually comprised of technical and management expertise for carbon abatement projects.
- Asset owner: the person who owns the equipment that generates abatement for the project. For example, light bulbs in a commercial buildings project or a boiler owner for an energy efficiency upgrade project.
- Other relevant right holder: a person who is not a site or asset owner but who has the legal right to undertake activities at or for the site or asset.
It's important to be open and transparent when informing stakeholders that you intend to run a project. Once a project is registered, no one else can register a similar project at the same site or assets.
In any commercial arrangement, parties can transfer the legal right to carry out the project to others. This includes to aggregators or service providers.
You should make sure your project doesn't overlap with any other ACCU Scheme project. Double counting abatement is not allowed by law.
For sequestration and area-based emissions avoidance projects, you may also need the consent of eligible interest holders.
Demonstrating legal right
When you apply to register a project, you must confirm you have the legal right to carry out the project.
You will need to describe your legal right clearly. It must relate to each specified site or asset for which you claim to have legal right. The description must include:
- the project activities and obligations, such as allowing access or monitoring
- a statement that you (the applicant):
- have the right to carry out the project activities on or for the sites or assets included in the project
- have a lawful and exclusive right to be issued all ACCUs that may be created as a result of the project activities
- how you acquired the legal right
- a statement about the duration of your legal right.
Supporting documents
You may provide documents to show your legal right. These can be copies of email exchanges, letters or agreements and can include:
- deeds
- terms and conditions of the current land tenure
- explanations of how project activities are permitted
- state/territory correspondence confirming project activities are allowed
- legal advice
- records of land tenure amendments to allow project activities
- assessments of whether the future acts regime applies
- evidence of Native Title Act notification and consultation requirements being satisfied
- Indigenous land use agreements or agreements with registered native title bodies corporate
You should include an explanation or summary of any documentation (or extracts) you provide. If you provide an extract, you should state that no other parts of the document contradicts the information in the extract.
Assessing legal right
We will assess your application to register a project based on the information you provide. We don't establish or certify the legal right. Our decision to register a project is not evidence that legal right exists.
We may request further information or documentation about your legal right.
An auditor may also need to see information or documents as evidence of your legal right. This might include relevant title or contractual documentation. They might request this as part of an audit of:
- your claim of legal right at the time of project registration
- a project offsets report of any changes in sites or assets in respect of which ACCUs have been claimed.
Change of circumstances
If your legal right ceases after your project is registered, you must notify us within 90 days.
The new person responsible for running the project must be registered as project proponent within 90 days of your legal right ceasing. If they aren't, we may revoke the project’s registration.
If we revoke a sequestration project's registration before the permanence period expires, you may have to relinquish a certain number of ACCUs. A relinquishment notice won't exceed the total number of ACCUs issued for the project.
If another person acquires your legal right to carry out the project, you need to apply to vary your project proponent.
Examples of obtaining legal right
Company A is a service provider contracted by a site owner to undertake a series of energy efficiency upgrades at the site.
The site owner funds the project, but Company A carries out all the operational activities. The site owner decides to allow Company A to register as the project proponent.
The site owner procures some of the larger pieces of equipment used for the project. They get them on a 10 year lease from the equipment manufacturer or other lessor. This means the manufacturer/lessor still owns the equipment being installed as part of the upgrade.
To obtain the legal right to conduct the project, Company A will need to get consent from:
- the site owner
- the equipment owner
To demonstrate legal right to carry out the project, Company A must:
- describe the project activities and obligations
- provide statements about its legal right and the duration of that right
- describe how it obtained its legal right
- explain arrangements with the site owner and equipment owner and how it provided the legal right to Company A.
Company A may also provide consents from the site owner and the equipment owner.
Company B is an energy retailer that wants to run a project replacing client's boilers. A client owns a boiler and leases space for the boiler at a site. The client and Company B enter an agreement for Company B to install a replacement boiler at the site.
Company B offers the client a discount on installation costs. In exchange, the client agrees to allow Company B to register as a project proponent. This means Company B will receive all ACCUs from replacing the boiler for the next 7 years.
To obtain the legal right to conduct the project, Company B will need to get consent from:
- the boiler owner
- the site owner.
To demonstrate legal right to carry out the project, Company B must:
- describe the project activities and obligations
- provide statements about its legal right and the duration of that right
- describe how it obtained its legal right
- explain arrangements with the boiler owner and site owner and how it provided the legal right to Company B.
Company B may also provide consents from the boiler owner and the site owner.
Company C leases the use of a property from the site owner. The leasing arrangements involve a complex range of rights associated with the use and infrastructure at the site.
The project will include making energy efficiency upgrades and changes in operational practices to reduce the overall energy consumption on the site.
Company C contracts a service provider to set up the project on its behalf. It registers the project under Company C’s name. Company C is responsible for arranging auditing, meeting reporting requirements and receiving ACCUs. A service provider actually undertakes the activity.
To obtain the legal right to conduct the project, Company C will need to get consent from:
- the site owner.
To demonstrate legal right to carry out the project, Company C must:
- describe the project activities and obligations
- provide statements about its legal right and the duration of that right
- describe how it obtained its legal right
- explain arrangements with the site owner and how it provided the legal right to Company C.
Company C may also provide consents from the site owner.
Company D is a service provider. It wants to undertake a project to establish plantings on a range of properties owned or leased by multiple landowners and leaseholders.
The project will involve establishing permanent plantings on land that has been clear of forest for at least the last 5 years.
Company D will register the project and be responsible for all aspects of the project activities. This includes:
- the purchase of all seed or tube stock
- undertaking the planting
- maintaining the plantings
- reporting and arranging auditing as required.
Company D will receive all the ACCUs created from these activities. In exchange for the right to access their land and carry out the project, Company D agrees to pay the landowners and leaseholders a share of the proceeds from the sale of those ACCUs.
To obtain the legal right to conduct the project, Company D will need to get consent from:
- each landowner
- each leaseholder.
To demonstrate legal right to carry out the project, Company D must:
- describe the project activities and obligations
- provide statements about its legal right and the duration of that right
- describe how it obtained its legal right
- explain arrangements with each landowner and leaseholder and how it provided the legal right to Company D.
Company D may also provide consents from each landowner or leaseholder.
Each landowner and leaseholder is also an eligible interest holder. Before Company D can apply for ACCUs, it will need to get an eligible interest holder consents form from each of them.
Guidance
To help you establish legal right before you can register a project, refer to our guidance documents:
- Native title, legal right and eligible interest-holder consent guidance
- Project resource 1 State and territory land law and summary of land rights law
- Project resource 2 How does a project proponent demonstrate legal right
- Project resource 3 Identifying land subject to native title
Disclaimer
The information and documents on this page are for general guidance only. We don't accept responsibility for the accuracy, currency or completeness of the information. You should consult the relevant legislation and seek your own legal or professional advice.