Projects under this method can earn Australian carbon credit units (ACCUs) by upgrading industrial equipment to be energy efficient.

When to use this method

The industrial equipment upgrades method may be suitable for your business if you upgrade:

  • compressed air systems
  • boiler systems
  • process heating
  • refrigeration
  • pumps.



Industrial equipment upgrades must be recommended in an energy savings report or audit from the last 2 years by an:

  • independent professional energy services contractor
  • consultant.

Under this method, eligible equipment must:

  • be in use before a project starts
  • consume less than 500,000 gigajoules of energy per year
  • operate on a regular basis.

You must dispose of previous equipment if upgrading it to equipment of:

  • the same type
  • a similar capacity
  • a 5% higher efficiency.

Equipment must be generally maintained. Any maintenance shouldn't effect equipment abatement generated by more than 20%, otherwise it'll be excluded.

You must also meet general eligibility requirements for the Australian Carbon Credit Unit (ACCU) Scheme.

Relevant legislation:

  • Part 2 and 3 of the method
  • Part 3 of the Act


Industrial equipment should be excluded if it:

  • irregularly operates
  • undergoes upgrades that substantially change output capacity
  • provides upgrades to vehicles and aircraft
  • reaches total energy consumption in a 12-month period greater than 500,000 gigajoules
  • isn't operating at the time of, or before, the upgrade, including new installations
  • operates solely as a reserve, back-up or emergency system before or after an upgrade.

Old equipment can't be re-used or refurbished, but it may be recycled.

This prevents pre-upgrade emissions from shifting to a different location and allows efficient equipment to be repurposed.

Relevant legislation:

  • Part 3 of the method

Method requirements

Industrial equipment upgrade activities include:

  • modifying, removing or replacing equipment
  • changing how equipment is controlled or operated
  • installing additional equipment, such as waste heat recovery systems
  • changing the energy sources used by equipment, such as switching from diesel to electricity as your fuel source.

Project activities are for small-scale projects with annual energy consumption limits of 500,​000 gigajoules. This limit applies to all equipment in the energy boundary, and energy flows that affect energy​ consumption of upgraded equipment are included in abatement calculations.

Industrial equipment units added after project registration applications must satisfy the condition of having been recommended​ in an energy report.

Relevant legislation:
  • Part 2 and 3 of the method

A person that meets the qualifications of a measurement and verification professional is needed for this method. A measurement and verification professional must:

  • provide a pre-upgrade and post-upgrade declaration for each industrial equipment unit upgrade
  • state that the upgrade is in accordance with the method
  • review project activities, measurements and calculations to confirm requirements are met
  • check the system has appropriate energy boundaries

You'll also require an accredited technician to calibrate equipment used for monitoring requirements. Equipment must be installed and operated under manufacturer specifications.

Relevant legislation:
  • Section 24-26 of the method
  • Section 40 of the method
  • Section 13(f) of the rule

You must notify us of any equipment safety or product performance issues.

Relevant legislation:
  • Section 34 of the method

Abatement is calculated by:

  • determining baseline emissions per day, minus project emissions per day
  • multiplying this by the number of days in a reporting period
  • applying a decay factor (if applicable).

You can measure each upgraded equipment's sub-unit either:

  • regularly and manually at the end of each reporting period
  • once, in the operating measurement period to establish performance baseline. You must then apply a decay coefficient through project reporting years.

If the output of a sub-unit isn’t measured regularly, or doesn’t meet criteria, then a decay coefficient applies. A decay coefficient equal one (100%) in the first reporting period. However, in subsequent crediting periods, it'll decrease to reflect variations in project output. This reduces the sub-unit's abatement.

The abatement from each unit in your project is totalled, minus any negative abatement from previous periods.

This provides your project's net abatement amount for the reporting period.

Relevant legislation:
  • Part 4 of the method

Equipment fuel and electricity consumption must be monitored within its energy boundary. This should be monitored separately from other site energy use. It must be monitored during the baseline period and the project measurement period.

Fuel or electricity drawn into your unit but distributed outside of the system is called transmitted fuel or electricity. Amounts transmitted must also be monitored separately.

If your industrial equipment unit includes a partly independent sub-unit, you must also monitor:

  • the parts of the fuel and electricity consumption attributed to the internal and external outputs of the sub-unit
  • any lower grade energy created by the partly independent sub-unit and the energy return to that sub-unit.

Your monitoring equipment must also be monitored during:

  • verification of data
  • evidence of bias or drift
  • the integrity of any anti‑tampering measures applied to the equipment.

Measurements of electricity consumption must follow the method and:

These measurement approaches must be used in the baseline period and the project measurement.

Relevant legislation:
  • Sections 38-40 of the method

You must keep records of your pre-upgrade and post-upgrade equipment declaration.

You must also keep any relevant records of each industrial equipment unit that identifies the location of:

  • all the energy-consuming equipment included in the unit
  • equipment that measures the consumption of the energy-consuming equipment in the unit
  • the supply of energy for that consumption.

You must keep records as evidence that any equipment removed as part of the project was disposed of in accordance with this method.

You must also meet general record-keeping requirements of the Act.

Relevant legislation:
  • Section 36 of the method
  • Part 17 of the Act
  • Part 17 of the rule

You must submit reports anywhere between every 6 months - 2 years.

Your submitted report must:

  • demonstrate that a qualified professional identified and evaluated energy-saving opportunities
  • be conducted from someone who's not the equipment's manufacturer or supplier
  • provide recommendations that are less than 2 years old and existed before project registration.

Any excluded industrial equipment or factors that were previously reported and calculated on must still be reported. This must explain their removal from the current offsets report.

Where external factors or parameters affect your project but can't be defined, your current report should explain why it isn’t possible to determine or calculate these factors.

You must also meet general reporting and notification requirements under the Act.

Relevant legislation:
  • Section 32 of the method
  • Part 6 of the Act
  • Part 6 of the rule

We provide you with an audit schedule when your project's declared.

You must provide audit reports according to this schedule.

We schedule at least 3 audits and additional audits can be triggered.

For more information on audit requirements, you can refer to our audit information.

Relevant legislation
  • Part 19 of the Act
  • Part 6​ of the rule

Documents and resources