A project proponent is the person responsible for a project under the Australian Carbon Credit Unit (ACCU) Scheme. As the project proponent is in control of the project, our legal relationship is with them.
If you're planning to run an ACCU project on your land, it's important to carefully consider who will act as the project proponent.
You must choose a project proponent before you apply to register a project or enter into any agreement with third parties for your project.
What is a project proponent
A project proponent is the party who has the legal right to carry out a project.
A project proponent is:
- responsible for carrying out the project
- issued all ACCUs for the project
- legally responsible for meeting all obligations under the law.
If the project proponent fails to meet their legal obligations, there can be serious consequences:
- The project can be revoked.
- The project proponent might have to return any ACCUs generated by the project.
- They might be subject to civil penalties or criminal proceedings.
Choosing a project proponent
If you own the land or are a leaseholder, you can choose to:
- be the project proponent yourself
- give the right to a third party.
If you choose to be the project proponent, you will be legally responsible for carrying out the project and meeting all obligations for the life of your project.
Using an agent
You can be the project proponent and still engage someone else as an agent for your project.
An agent will act on your behalf according to the terms of your agreement with them. They might:
- submit project reports
- apply for ACCUs
- deal with us on your behalf.
You might decide to engage an agent if you want to control the project but don't have the technical expertise or administrative resources to manage it.
You must authorise an agent to act on your behalf, similar to an arrangement with a tax agent. Even if you engage an agent, you are still legally responsible for carrying out the project and meeting all obligations. You also retain ultimate control of the project. ACCUs generated by your project will be issued into your ANREU account.
Before you engage an agent or sign any agreements, you should:
- get your own legal and financial advice, noting that we can't intervene in any disputes between you and your agent
- make sure you understand what you are signing and are confident the agreement is fair and equitable
- enquire about the agent including their services and experience
- check the agent holds an Australian Financial Services Licence (AFSL) issued by the Australian Securities and Investments Commission (ASIC) if they are providing financial service advice.
You can appoint a third party to be the project proponent.
If you choose someone else as the project proponent, they will:
- control the project
- be legally responsible for carrying out the project and meeting all obligations
- receive ACCUs from the project
- receive funds from selling ACCUs to the Australian Government (if they have a carbon abatement contract).
You can engage a carbon service provider as the project proponent.
Carbon service providers are commercial businesses or organisations that develop and run carbon abatement projects. They're sometimes called aggregators or project developers.
You might decide to engage a carbon service provider if you don't want to have direct control over the project or be responsible for conducting it. It may also be the right choice if you don't have the technical expertise or administrative resources to manage your project.
If you engage a carbon service provider as the project proponent, you will have a commercial agreement with them. It will set out:
- the terms on which you give them legal right
- your obligations when it comes to conducting project activities
- the financial return you will receive.
Before you enter an agreement with a carbon service provider, you should follow these steps:
- Make sure you understand what you are signing and are confident the agreement is fair and equitable.
- Make sure your agreement sets out the rights and obligations for ongoing registration of the project. This is important if the carbon service provider ceases to be a project proponent or if you want to exit the arrangement.
- Seek professional legal and financial advice.
- Enquire about the carbon service provider including their services, experience and government licences.
- Check the carbon service provider holds an Australian Financial Services Licence (AFSL) issued by the Australian Securities and Investments Commission (ASIC) if they are providing financial service advice.
We aren't responsible for the terms or enforcement of private agreements. We cannot intervene in disputes between you and the carbon service provider. If you aren't satisfied with how a project is being conducted on your land, you need to take your own action under your agreement.
If you give a carbon service provider the right to act as the project proponent, our legal relationship will be with them even if you own the land.
You can use the Carbon Market Institute's voluntary Code of Conduct to help choose a carbon service provider. Choosing a carbon service provider who is a signatory to this code might provide you some assurance.
Fit and proper person test
Before a person can act as a project proponent, we will assess they have the capability, competency, capacity and good character to run the project and comply with the requirements.
The project proponent will need to complete a fit and proper person assessment when they register to participate in our schemes. Once registered as a participant, they can apply to register the project and act as the project proponent.
Find out more about fit and proper person requirements for the ACCU Scheme.
Change the project proponent
If you are a project proponent, you can apply to:
- appoint a new project proponent
- add another project proponent
- remove an existing project proponent.
There are also situations where you must change the project proponent.
Find out more about how to change a project proponent.
Estate planning for project proponents
This section is not a substitute for estate planning advice
We recommend project proponents consult a wills and estates lawyer for guidance on their circumstances and to help them prepare their will. A bank or financial institution may also be able to provide guidance on estate planning.
As the project proponent, your ACCU Scheme project is an asset that you own. Project ownership is separate from ownership of other assets required to run your project, such as land rights, tools, documentation or machinery.
In your will, you can leave ownership of your project to the person of your choice (beneficiary) or direct for the project to be sold.
You should consider what other assets the beneficiary or purchaser will need to access to continue running the project.
If you pass away, we will try to help the new project proponent keep the project on track. In some cases, they may need to take urgent action. Otherwise, they could miss out on the opportunity to claim ACCUs, or the project may become ineligible. For more information, read about estate management for executors.
Leaving ownership of your project to a beneficiary
If you’re leaving ownership of your project to a beneficiary, you can also make them a second project proponent. Whether you do so or not, you need to prepare your beneficiary or executor to successfully run your project.
We recommend that you add your intended beneficiary as a second project proponent before you pass away. This ensures the project will keep running smoothly and allows your beneficiary to learn from you about the project and the proponent role.
You can add your intended beneficiary as a second project proponent in Online Services.
They will need to pass the fit and proper person test, and we will need to be satisfied that they hold legal right to carry out the project.
This is the easiest option for the beneficiary and executor because it:
- prepares your beneficiary to take urgent action to keep the project running
- prevents an executor from having to temporarily act as the project proponent if there is a delay between grant of probate and the sale or distribution of assets.
If you don’t want to add your intended beneficiary as a second project proponent, you should:
- make sure your executor is a fit and proper person who can temporarily step in as the project proponent if necessary
- make time with your executor and your intended beneficiary to explain your project and the duties they may have to take up as the project proponent
- inform your executor of their estate management responsibilities.
Directing for your project to be sold
Your executor can sell the ACCU Scheme project and the role of project proponent. For more information, view our guidance on selling an ACCU Scheme project.