Carbon maintenance obligations help prevent large-scale loss of carbon from Australian Carbon Credit Unit (ACCU) Scheme projects.
About carbon maintenance obligations
Carbon maintenance obligations are a compliance measure under the Carbon Credits (Carbon Farming Initiative) Rule 2015. They only apply to sequestration projects.
Carbon stored by a sequestration project may be lost because of natural disturbance or deliberate conduct. When this happens, a project proponent may have to relinquish a certain number of ACCUs. If ACCUs aren't relinquished, we may declare a carbon maintenance obligation on the project area.
A carbon maintenance obligation helps protect remaining carbon stores and prevent further losses of sequestered carbon. It does not prevent using the land for productive purposes, provided carbon stores are maintained.
Process for making a carbon maintenance obligation declaration
A carbon maintenance obligation is a compliance measure that can only be used in specific circumstances. It is the final option where permanence obligations have not been met.
A carbon maintenance obligation usually won't be required if:
- projects are managed according to the relevant sequestration method
- ACCUs have already been relinquished for lost carbon stores.
Before we can initiate a carbon maintenance obligation declaration, we must:
- have issued you a relinquishment notice to return ACCUs that you haven't complied with or are unlikely to comply with
- be satisfied your project will have to relinquish ACCUs and the relinquishment requirement won't be met.
We provide a copy of the carbon maintenance declaration to:
- the project proponent
- each eligible interest holder
- the relevant land registration official.
What a carbon maintenance obligation means
A carbon maintenance obligation declaration means that:
- a person must not conduct an activity that reduces or is likely to reduce carbon stores on the land below the level of when the obligation was declared (benchmark sequestration level) unless it is a permitted carbon activity. This applies to any person, even if they weren't involved in the project.
- an owner or occupier of the land must ensure the carbon stores on the land aren't less than the benchmark sequestration level. This applies even if they weren't the owner or occupier when the project was first registered.
The benchmark sequestration level is the level of carbon sequestration that must be maintained under a carbon maintenance obligation.
You must not conduct any activity that reduces or is likely to reduce the benchmark sequestration level. If the carbon stored falls below the benchmark sequestration level, you must take all reasonable steps to ensure the carbon stored recovers to the benchmark level.
We determine the benchmark sequestration level. To do this, we may:
- review the original information provided by the project proponent
- conduct desktop assessments
- use compliance monitoring tools
- apply relevant method formulas
- access the land to conduct validating ground activities.
How the level is calculated depends on the reason for the relinquishment. For example, if the relinquishment requirement is related to:
- project revocation, the level could be based on the project offset reports and supporting documentation
- carbon stock loss, the level would need to account for that reversal
- false and misleading information, we would conduct our own assessment of the likely abatement achieved by the project.
Permitted activities may be specified in the carbon maintenance obligation declaration. Activities would only be permitted where we're satisfied they wouldn’t result in carbon stocks being reduced to below the benchmark sequestration level.
Permitted activities allow areas to be used for productive purposes, such as grazing. They can also include activities by native title holders exercising their native title rights where they were determined after the project became unconditionally declared.
The carbon maintenance obligation declaration will specify the permitted activities and set out the manner, time, place, persons or time period during which the activity may be carried out. Permitted activities don’t override existing regulations around land use.
Vary or revoke a carbon maintenance obligation declaration
You may apply to us to vary or revoke the declaration where a proposed activity will impact the carbon stores of a particular area subject to a carbon maintenance obligation.
You can apply to:
- remove a particular part of the land from the declaration
- add or change permitted activities
- revoke the declaration.
Providing flexibility in the management of carbon maintenance obligations allows other commercial activities to continue while recognising the impact of these activities on carbon stores. This helps ensure ACCUs continue to represent genuine and additional abatement.
How to request a variation
To remove a specified area from a carbon maintenance obligation declaration, you must submit your request in writing. You must include details of the land that you want to remove.
We will let you know the amount of ACCUs that need to be voluntarily cancelled for the variation to be made. This will usually be a percentage of ACCUs issued for the project, based on the size of the land that is being removed, relative to the carbon estimation area(s) in the project.
Example:
- The carbon maintenance obligation covers an entire project area.
- The area(s) of land being removed makes up 30% of the project’s total carbon estimation areas.
- The number of ACCUs to be voluntarily cancelled would be no more than 30% of the total amount of ACCUs issued in relation to the project.
You will then need to arrange to voluntarily cancel the required number of ACCUs. The ACCUs don't have to come from the project.
Once we're satisfied the ACCUs have been cancelled for the variation, we will remove the relevant areas from the declaration.
We will take reasonable steps to ensure variations are made within 30 days of the ACCUs being cancelled.
Removing a carbon maintenance obligation
A carbon maintenance obligation declaration will be removed if:
- all ACCUs issued for the project are relinquished and land subject to the carbon maintenance obligation isn’t part of any sequestration project
- all outstanding penalties for failing to relinquish ACCUs are paid in full
- the permanence period of the project expires.
The person applying for revocation of the carbon maintenance obligation declaration or relinquishing the associated ACCUs doesn’t need to be the original project proponent.