Advance payments pilot has ended
The advance payment pilot assisted with the costs of direct measurement for abatement of soil carbon sequestration.
The pilot was accessed through carbon abatement contracts. These are no longer available since the function of Australian Carbon Credit Unit (ACCU) Scheme auctions has moved out of the Clean Energy Regulator. This change follows the implementation of Recommendation 3.3 of the Independent Review of ACCUs.
Current advance payments will not be affected by the closure of the advance payment pilot. Participants who have received advance payments must continue to meet their obligations under the program.
This pilot provided an advance payment worth up to $5,000 for eligible ACCU Scheme projects to help with upfront costs of soil sampling.
Eligibility
To be eligible, a project must:
- be registered under the Measurement of Soil Organic Carbon Sequestration Agricultural Systems 2018 Method or the Estimation of Soil Organic Carbon Sequestration using Measurement and Models 2021 Method
- not have already received an advance payment under the pilot
- not have done the baseline soil sampling in the relevant area of land prior to 23 July 2020.
Both conditionally and unconditionally registered projects may be eligible.
Where a project has not previously received an advance payment and has already conducted baseline soil sampling, the project may still be eligible if it is expanding soil carbon activities to a new area of land that requires new baseline soil sampling.
Obligations
Data and reporting
Under the 2018 and 2021 soil carbon methods, proponents must provide a baseline soil sampling plan. The data requirement for the advance payments of soil projects builds on this existing data requirement.
Contract holders must ensure either they or the proponents:
- provide soil data from baseline and subsequent soil carbon testing
- share specific site management information and changed management practices with the Clean Energy Regulator.
This data will need to be provided in an agreed format until the Carbon Abatement Contract has been fulfilled. This will be shared with the Department of Industry, Science, Energy and Resources and the Department of Agriculture, Water and the Environment, to help inform soil carbon activities.
Baseline soil sampling plans are a requirement of the method and detail where and how you plan to sample, including details of carbon estimation areas (CEAs), mapping, and how sample points are selected.
Providing this information to us prior to conducting baseline testing will help in earlier identification of the CEA, to fast-track assessment of crediting applications. This may result in proponents receiving their ACCUs more quickly than would otherwise be the case. Further information on baseline soil plans and how to sample can be found in our simple method guide and the sampling guidance.
Data from baseline and subsequent soil carbon testing and specific site information must be provided to us via email in the agreed format within 9 months of the testing results being available. This data can also be re-used when project proponents apply for credits.
Link with a carbon abatement contract
The advance payment is provided through fixed delivery and optional delivery carbon abatement contracts.
To receive the advance payment, the contract ‘seller’ (the party who has a carbon abatement contract with the Commonwealth) must have agreed to an additional contract with the Clean Energy Regulator. This contract sets out requirements relating to:
- the advance payment
- repaying ACCUs
- changes to the delivery schedules
- data sharing
- related matters.
A carbon abatement contract is therefore a requirement for having a contract addendum for the soil sampling advance payment.
Connecting a soil project to a carbon abatement contract supports the administration of the advance payment and the associated contractual obligations. However, it also results in the project being subject to carbon abatement contract conditions and may impact the ability of the project to come forward for an additional contract.
A fixed delivery contract may have one or more projects added to it. Additional eligible projects can each receive advance payments, provided the contract is still active. The remaining contract duration would need to allow for new soil projects to be added, data from those projects to be provided and sufficient volume remaining in the Contract to repay the advance payment. Separate applications need to be submitted for each project seeking an advance payment and we will assess each application for suitability.
For both fixed delivery and optional delivery contracts, the proponent must repay the ACCUs associated with the advance payment. This means that the addendum to an optional delivery carbon abatement contract becomes, in effect, a fixed delivery contract for the advance payment ACCUs. If ACCUs from the project are not available, ACCUs from other sources can be used. Where ACCUs cannot be provided, the advance payment amount will need to be repaid in dollars.
Acquittal of the advance payment
Acquitting the advance purchase of ACCUs is to occur within 5 years of the advance payment terms being agreed. When acquitting the advance payment, ACCUs can be made from another source (such as another project or the private market) and does not need to be from the project directly connected to the contract. This applies for both fixed delivery and optional delivery contracts.
Where an advance payment scheduled delivery is unable to be met, the Seller and Clean Energy Regulator will use all best endeavours to negotiate a revised schedule.
Debts due against advance payment amounts will be recovered with interest from the time due, in accordance with our debt recovery principles.