The Emissions Reduction Fund: eligible projects

Department of the Environment, 2014

Projects must be new, not required by regulations and not funded by another Government programme. Existing Carbon Farming Initiative projects are automatically eligible to participate in the Emissions Reduction Fund.

Emissions reduction projects must be new

An Emissions Reduction Fund project (including upgrades and expansions) must not have begun to be implemented before it has been registered.

To clarify this requirement, the Carbon Farming Initiative Amendment Bill includes a non-exhaustive list of examples of actions that will be taken as evidence that a project has commenced, such as installing equipment or making a final investment decision.

This means that proponents can, for example, begin planning projects or obtaining regulatory approvals and this will not be considered as action that will disqualify them as already implemented. The Clean Energy Regulator will provide further guidance on the types of project preparation activities that do not indicate that a project has commenced.

Businesses that notify the Clean Energy Regulator can begin implementing their projects after 1 July 2014 and still meet the definition of a new project. The notification must include the name and location of the project, the method that could potentially apply, and a project description. The Regulator will treat the project as new provided that the project begins after the date of notification. The proponent will have until 1 July 2015 to officially register the projects for which notice has been given under this provision.

Emissions reduction projects must not be required by law

Emissions reduction projects cannot be mandatory under a Commonwealth, state or territory law.

In some cases, the project may involve doing more than is required by regulations. For example, many landfill operators are required to manage methane emissions and may undertake projects to capture additional gas. Methods for these projects may provide rules for establishing a regulatory baseline for these projects.

Methods may also take account of best practice and other guidance materials issued by environmental regulators when setting baselines.    

Support from other Government programmes

The Emissions Reduction Fund will not support activities that are likely to go ahead under another government programme. The purpose of this requirement is to ensure that emissions reduction activities are not paid for twice.

The Clean Energy Regulator will list government programmes that typically provide sufficient support for emissions reduction activities, such as the New South Wales Energy Savings Initiative. Proponents will need to choose whether to seek support for their project through the Emissions Reduction Fund or the other programmes listed.

Proponents may be able to obtain funding through the Emissions Reduction Fund as well as support from other government programmes where this is necessary for the project to go ahead. For example, savanna fire management projects may involve rangers that are supported through Commonwealth and state government Indigenous ranger programmes.  

Emissions reduction projects must be consistent with a relevant method

Proponents will use emissions reduction methods to identify projects, assess their greenhouse gas benefits and develop bids for funding.

Emissions reduction methods set out the rules for estimating emissions reductions from different activities. These methods ensure that emissions reductions are genuine—that they are both real and additional to business as usual operations.

More information

Details about the Emissions Reduction Fund are available at:

www.environment.gov.au/emissions-reduction-fund

Note: While the Commonwealth has made reasonable efforts to ensure the accuracy, correctness or completeness of the material, the Commonwealth does not guarantee, and accepts no liability whatsoever arising from or connected to, the accuracy, reliability, currency or completeness of this material. Any references to the potential costs or benefits of undertaking an activity in accordance with an emissions reduction method are estimates only. This material is not a substitute for independent professional advice and entities should obtain professional advice suitable to their particular circumstances.