Projects under the source separated organic waste method can earn Australian carbon credit units (ACCUs) by separating their organic waste from other waste, reducing the amount that goes to landfill.

Projects can also choose to divert food from being landfill and donate it to registered charities.

When to use this method

The source separated organic waste method may be suitable for your business if you can:

  • conduct a new or expand an existing waste management activity to divert organic material from landfill
  • separate organic waste at its source and stop it from going to landfill
  • conduct activities in a single state or territory.



This method is for companies or organisations that sell or process food and garden waste. This includes:

  • food retailers
  • hospitality businesses
  • local councils.

To be eligible for this method, you must:

  • include eligible organic material, with any following waste mix types:
    • food
    • textiles
    • garden and park
    • wood and wood waste
    • sludge
    • nappies
    • rubber and leather.
  • Ensure eligible organic material is separated where it's generated
  • hold a minimum 2 years of records to show organic material was previously disposed in landfill
  • establish legal right with commercial agreements between different entities:
    • local government
    • waste generators
    • charities
    • waste management organisations.

You must also meet general eligibility requirements for the ACCU Scheme.

Relevant legislation

  • Part 3 of the Act
  • Part 3 Division 2 of the Act
  • Part 1 of the method
  • Part 3 Division 1 of the method


Ineligible waste excluded from this method is:

  • recyclable paper
  • cardboard
  • biosolids
  • wastewater
  • inert (inorganic) waste.

Method requirements

A project activity must:

  • treat organic waste – separate and divert organic waste from landfill to be treated using eligible low-emissions processes, such as:
    • composting
    • using an anaerobic digester to capture and combust methane
    • producing a fuel substitute.
  • Donate to registered charities – separate and divert surplus commercial or industrial-sourced food from landfill to registered charities for charitable use and distribution.

This method identifies 4 types of new, expansion and aggregated waste diversion activities. These activities are:

  • a commercial food waste activity
  • a municipal food waste activity
  • a municipal garden and park waste activity
  • a municipal food and garden and park waste activity.

For each activity type, this method offers default waste composition values for different activities. This simplifies calculating abatement. These requirements are outlined in method part 3, division 1. Method default values are pre-defined proportions of waste mix types in material collected by the waste diversion activity.

Waste audits, per method section 61, must be used to determine the composition of eligible waste diverted by the activity if a source separated activity isn't one of the above particular activities.

Trial waste diversion activities

You can trial a source separation activity and remain eligible to implement a new waste diversion activity if the trial occurred in the activity area:

  • during the relevant 24-month period
  • not within the last 12 months.

Material diverted from landfill by the trial can be disregarded for the purposes of establishing that material previously went to landfill.

If the trial occurred within the last 12 months, you must account for that activity using the requirements for expansion waste diversion activities, per section 11 of the method.

Relevant legislation
  • Part 3 division 1 of the method
  • Part 5 division 4 of the method
  • Part 2 of the method
  • Section 11 and 61 of the method
  • Sections 10, 11, 12 and 14 of the explanatory statement

7 years.

The extended accounting period begins immediately at the end of the 7-year crediting period and can be for up to 6 years. During the extended accounting period, projects report and earn ACCUs for the abatement calculated and accrued in the crediting period. Activities conducted during the extended accounting period aren't eligible.

Relevant legislation
  • Part 5 of the Act
  • Part 4 division 2 of the explanatory statement

You earn ACCUs for the net carbon abatement calculated from separating organic waste activities. This is compared to the emissions that would have been generated if the waste had gone to landfill.

You can claim abatement during different project stages:

  • Eligible abatement is calculated and reported to us where ACCUs may be claimed for a portion of that abatement.
  • Remaining portions of calculated abatement may be claimed during the crediting period or during the extended accounting period.
  • During the extended accounting period, you can report and earn ACCUs from the crediting period.

We calculate the net abatement by adding together the:

  • activity abatement portion for the reporting period
  • accrued activity abatement portions from previous reporting periods.

Accrued activity abatement portions can’t be used to calculate the carbon dioxide equivalent net abatement amount for a previous reporting period.

Calculating activity abatement portions for a reporting period is found by dividing the abatement generated by the project's source separation activities (during the reporting period) into 7 equal portions.

One portion calculates the net abatement amount for the reporting period. The other 6 portions accrue over time, to be used in future reporting periods.

Include all activities you undertake in calculations unless the project is divided. If a project is divided, you should only calculate abatement relevant to the activities included in that part of the project.

Relevant legislation
  • Part 4 divisions 2 and 3 of the method
  • Part 5 division 1 of the method
  • Part 6 of the method

ACCUs are issued to you over a 13-year period. You need to continue to report on your project at least every 2 years over this period.

Each report must:

  • identify each source separation activity that’s in the calculations
  • provide the information and evidence to support the activity, if the calculations include potential activities
  • identify source separation activities excluded from calculations and provide reasons why they aren’t included.

Remember to also meet the reporting and notification requirements of the Act and rule.

Relevant legislation
  • Part 6 of the Act
  • Part 6 of the rule
  • Part 5 division 1 of the method

Waste audits determine an accurate assessment of waste composition and account for seasonal variation across the reporting period.

You must keep a record of evidence that each waste audit period occurred during any relevant seasonal variations.

Remember to also meet record-keeping requirements of the Act and rule.

Relevant legislation
  • Part 17 of the Act
  • Part 17 of the rule
  • Part 5 Division 3 of the method

You must monitor all:

  • charity diversion activities
  • source separation activities.

Remember to also meet the monitoring requirements of the Act.

If you can't meet these requirements, you must apply for the non-monitored period. This period details when your project didn’t meet the requirements.

Relevant legislation
  • Part 17 of the Act
  • Part 17 of the rule
  • Part 5 division 4 of the method

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

You must conduct waste audits to determine the composition of diverted waste.

These audits should consider seasonal changes over the reporting period and result in a minimum of 95% confidence in assessing the diverted organic material.

We schedule at least 3 audits. Extra audits can be triggered.

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

Relevant legislation
  • Part 19 of the Act
  • Part 6 of the rule
  • Part 5 division 2 of the method