There are specific eligibility requirements for new Australian Carbon Credit Unit (ACCU) Scheme projects or project activities which abate the covered emissions of safeguard facilities.
Eligibility requirements
These eligibility requirements were introduced with the 2023 Safeguard Mechanism reforms. Read more about the reforms on the Department of Climate Change, Energy, the Environment and Water's website.
Legislation
New projects at safeguard facilities
Projects that abate the covered emissions of a safeguard facility must meet additional eligibility requirements to be registered under the ACCU Scheme.
To be eligible, the project must:
- also involve abatement of emissions other than the safeguard facility’s covered emissions (other emissions)
- be under a method that allows the calculation of the net abatement amount for the other emissions, separate from the covered emissions, and that calculation must be used.
These changes to the CFI Rule came into effect on 12 January 2023.
Scenarios for new projects
These scenarios outline eligibility for new ACCU Scheme projects that abate covered emissions of a safeguard facility.
Proponent A wants to register a project under the industrial and commercial emissions reduction method. The project reduces fuel combustion at a safeguard facility. These are the facility's covered emissions.
This project isn't eligible to be registered under the ACCU Scheme. This project may help the responsible emitter of the safeguard facility earn Safeguard Mechanism credit units instead.
Proponent B wants to register a project under the industrial and commercial emissions reduction method. The project involves reducing fuel combustion at a safeguard facility and reducing consumption of electricity generated by a separate undertaking or enterprise (such as grid electricity).
This project is eligible to be registered under the ACCU Scheme because:
- the project involves abatement of other emissions
- the method provides a way to calculate this abatement separately from the safeguard facility’s covered emissions and that calculation will be used.
This project may also help the responsible emitter of the safeguard facility earn Safeguard Mechanism credit units in relation to the reduction of the facility’s fuel combustion.
Proponent C wants to undertake a project under the coal mine waste gas method. The project involves:
- reducing fuel combustion at the facility
- reducing consumption of electricity generated by a separate undertaking or enterprise (such as grid electricity)
- supplying electricity to the grid.
This project is eligible to be registered under the ACCU Scheme because:
- the project involves abatement of other emissions including displacement abatement from supplying electricity to the grid
- the method provides a way to calculate this abatement separately from the safeguard facility’s covered emissions and that calculation will be used.
This project may also help the responsible emitter of the safeguard facility earn Safeguard Mechanism credit units in relation to the reduction of the facility’s fuel combustion.
Proponent D wants to undertake a project under the alternative waste treatment method. It would construct a new facility to divert waste from multiple landfills. One of the landfills is a safeguard facility.
This project would generally not be eligible to registered as an ACCU Scheme project because it involves abatement of covered emissions of a safeguard facility and the way to calculate the net abatement amount under the method would generally include these emissions.
The project may be eligible under the ACCU Scheme if:
- the waste diverted from the safeguard landfill facility is treated separately from the other waste by the alternative waste treatment facility, and
- the abatement of emissions from the waste diverted from the safeguard facility isn't included in the net abatement calculations for the project.
Proponent E wants to undertake a project under the source separated organic waste method to separate organic waste where it's created. The waste is currently being disposed of in a landfill that is also a safeguard facility.
The project isn't eligible to be registered under the ACCU Scheme because it abates emissions that would otherwise have been emitted from a safeguard facility.
Proponent F is the responsible emitter for a safeguard facility. Proponent F that wants to undertake a project under the 2021 soil carbon method which involves sequestering carbon on the land where the safeguard facility is located.
This project is eligible to be registered under the ACCU Scheme. This is because the project doesn't involve abatement of covered emissions from the operation of the facility.
New activities for existing projects at safeguard facilities
During their crediting periods, existing ACCU Scheme projects may be eligible to add new project activities that abate the covered emissions of a safeguard facility.
You must meet one of the following requirements for your new project activity to be eligible:
- You began to undertake the new project activity before 6 May 2023. This could include:
- making a final investment decision for the project activity
- acquiring or leasing a tangible asset (other than land or a minor asset) for use for the project activity
- starting construction work for the project activity.
- You specifically described the new project activity in your application to register the project, including specific details about:
- the project activity and location
- the type of equipment involved
- how the activity would result in carbon abatement in line with the relevant method.
- Your project previously involved an activity that abated the covered emissions of a safeguard facility, and that activity was specifically described in the application to register the project. You are now starting a new activity to abate the covered emissions of the same safeguard facility (instead of or additional to the original activity).
- Your new project activity abates other emissions, the project's method includes a way to calculate the net abatement amount for the other emissions separately from the safeguard facility’s covered emissions, and that calculation is used.
These changes to the CFI Rule came into effect on 6 May 2023.
Scenarios for new activities in existing projects
These scenarios outline eligibility for adding new activities that abate the emissions of a safeguard facility to existing ACCU Scheme projects.
Scenario 1
Facility A is a safeguard facility which includes 10 industrial ovens. Before 12 January 2023, the responsible emitter for the facility registered an ACCU Scheme project under the industrial and commercial emissions reduction method to upgrade 5 of its ovens (ovens 1 to 5) to make them more energy efficient. This project will reduce Facility A’s covered emissions.
The project proponent decides to also upgrade ovens at Facility B to abate Facility B’s covered emissions. Facility B is also a safeguard facility. The project proponent isn't eligible to claim abatement from the project activities at Facility B because:
- the activity was not described in the project application, and
- the new activities aren't occurring at the same facility as the old project activities.
The project proponent decides to also upgrade ovens 6 to 10 (which are within Facility A) during the crediting period of the project. The upgrades to ovens 6 to 10 can be included in the project if they are eligible under the method. Upgrades to other machinery within Facility A can also be included in the project if they are eligible under the method.
Relevant legislation
- Section 9, subsections (8) to (10) of the CFI Rule