Emissions Reduction Fund: Industrial Sector Methods fact sheet

Department of the Environment, 2014

The Government has set up technical working groups to develop suitable methods for emissions reduction opportunities in the industrial sector. The Government is also working with businesses to develop land sector methods.

What types of industrial methods will be available?

The Government is working with businesses to develop two categories of Emissions Reduction Fund methods:

  • Facility-wide methods will be developed to join up (or aggregate) emissions reductions from multiple activities at large facilities for which data are reported under the National Greenhouse and Energy Reporting Scheme (NGERS).
  • Activity methods will be developed for specific emissions reduction activities.

What facility-level methods are being developed?

The Government is developing a generic method for crediting aggregate emissions reductions from direct or indirect emissions sources across eligible facilities reporting under NGERS. These facilities include power stations, cement and aluminium production facilities, and oil and gas extraction plants that could achieve emissions reductions through a wide range of activities.

The facility method will use the data already reported by facilities under NGERS to calculate credits by comparing facility emissions with the project in place to what the emissions at the facility would have been had the project not been implemented.

The Government intends to have this method ready for use in early Emissions Reduction Fund auctions.

What activity methods will be available?

The Government is working with business through technical working groups to develop methods for specific emissions reduction activities, such as coal mine waste gas capture and industrial energy efficiency improvements.

The Government intends to have the methods listed below available for use in early Emissions Reduction Fund auctions.

Coal mine gas capture

This method will cover the capture and destruction of coal mine waste gas by flaring and/or electricity generation at active underground and open cut mines and, in time, Ventilation Air Methane (VAM) oxidation at underground mines. Where possible, it will use existing approaches under NGERS to directly measure the amount of methane captured and destroyed.


This method will cover emissions reductions from the transport sector due to technology upgrades, low emission vehicles and operational changes. It will rely on straightforward intensity metrics for air, sea, road and rail activities, for example emissions per tonne of freight per kilometer for freight, and emissions per passenger per kilometer for passenger transportation.


Three methods are being developed based on existing methods under the Carbon Farming Initiative. They cover:

  • landfill gas capture and combustion
  • alternative waste treatment, and
  • methane capture from waste water treatment, including from abattoirs and chemical processing facilities.

Industrial energy efficiency

This method will support a wide range of energy efficiency improvements in industrial facilities, such as upgrading boilers, improving control systems and processes, installing co-generation facilities and improving the efficiency of compressed air systems.

Building energy efficiency

Two methods are being developed specifically for improvements in building energy efficiency:

  • A method for commercial buildings based on the National Built Environment Rating System (NABERS). This method will be able to be used to estimate emissions reductions from offices, large shopping centres, hotels and data centres.
  • A method for the residential and small business sectors. This method will measure emission reductions by comparing emissions from a project containing households or businesses to those of a comparable control group.

More information

Details about the Emissions Reduction Fund are available at:


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.