The Emissions Reduction Fund: Emissions Reduction Methods
Businesses will use emissions reduction methods to identify projects, assess their greenhouse gas benefits and develop bids for funding.
What are emissions reduction methods?
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.
Emissions reduction methods are legislative instruments. This means that they must be made in accordance with the Emissions Reduction Fund legislation and can be disallowed by the Parliament.
The Emissions Reduction Fund will feature two types of emissions reduction methods:
- activity methods for specific emissions reduction actions, and
- facility methods that can aggregate emissions reductions from multiple activities at large facilities for which data are reported under the National Greenhouse and Energy Reporting Scheme.
What is the process for approving emissions reduction methods?
The process for developing and assessing methods that was established under the Carbon Farming Initiative has been improved and streamlined. This will allow methods to be made more quickly, provided they are suitable for use under the Emissions Reduction Fund.
The process for developing emissions reduction methods is as follows:
- The Minister for the Environment makes a decision on the priorities for method development, following advice from business and the Emissions Reduction Assurance Committee.
- Emissions reduction methods are developed by technical working groups comprising industry and other stakeholders, and the Department of the Environment.
- Emissions reduction methods are subject to public consultation and assessed by the Emissions Reduction Assurance Committee.
- The Minister (or delegate) considers the advice of the Emissions Reduction Assurance Committee and decides to approve the method.
How are emissions reduction methods prioritised?
Development of Emissions Reduction Fund methods will undergo an annual prioritisation process to ensure they offer the greatest opportunity for uptake and genuine abatement. Each year the Minister for the Environment will consider the types of methods that will be developed for use under the Emissions Reduction Fund with reference to the potential uptake of the method and the likely volume of emissions reductions, whether emissions reductions can be estimated with a reasonable degree of certainty and at an acceptable cost, whether the activity could have adverse social, environmental or economic impacts, and whether the activity could be promoted more efficiently through other government measures.
Following feedback from relevant Technical Working Groups and the public, the Emissions Reduction Assurance Committee (ERAC) will review the draft list of methods to be considered for prioritisation. A proposed methods priority list will then be provided to the Minster for approval. This list is intended to provide a forward 12 month work plan for ERF method development. The Minister will then decide on the priority list of methods, and the approved list will be available on the Department’s website.
How are emissions reduction methods developed?
The Department of the Environment will work with business through technical working groups to develop priority emissions reduction methods and identify priorities for future method development.
The Emissions Reduction Fund Update provides information about method development. You can view past editions and subscribe to future editions of the Update at www.environment.gov.au. For further information on any of the technical working groups, including how to participate, you can also email email@example.com.
Following the passage of the Emissions Reduction Fund legislation, the Minister will make guidelines for method development. These guidelines will cover technical issues such as whether emissions that result from applying a method are material and need to be estimated as part of the project, as well as options for ensuring additionality. The Emissions Reduction Assurance Committee must consider these guidelines when assessing methods. They will also assist technical working groups develop methods.
How are emissions reduction methods assessed?
The Emissions Reduction Assurance Committee will advise the Minister on whether proposed emissions reduction methods meet the requirements of the Emissions Reduction Fund, including the offsets integrity standards. The Emissions Reduction Assurance Committee will have regard to any guidelines made by the Minister and any written advice provided by the Clean Energy Regulator about the implementation of the method. The Emissions Reduction Assurance Committee may seek advice from external experts on technical matters.
The Emissions Reduction Assurance Committee will also monitor and review the effectiveness of emissions reduction methods over time and each emissions reduction method will be reviewed by the Emissions Reduction Assurance Committee at least once every four years.
The Department of the Environment will provide a secretariat for the Emissions Reduction Assurance Committee.
How are emissions reduction methods consulted on?
Draft methods will be subject to public consultation. The consultation period will be 28 days unless the Emissions Reduction Assurance Committee determines that a shorter period, of no less than 14 days, is appropriate.
How are emissions reduction methods approved?
In deciding whether to approve an emissions reduction method, the Minister will have regard to the offsets integrity standards and any advice provided by the Emissions Reduction Assurance Committee. The Minister will also consider whether a method is likely to cause any adverse environmental, economic, or social impacts and may require changes to methods or refuse to make methods that could have adverse impacts.
The process for varying an emissions reduction method is the same as the process for making a new emissions reduction method. The Minister can make minor variations to emissions reduction methods without seeking the advice of the Emissions Reduction Assurance Committee. Proponents can choose to apply a new version of a method or continue to use their current method.
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.