Explanatory Statement
Issued by the authority of the Assistant Minister for Climate Change and Energy
Carbon Credits (Carbon Farming Initiative) Act 2011
Carbon Credits (Carbon Farming Initiative) Amendment (Savanna Fire Management Projects) Rules 2026
Legislative Authority
Section 308 of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) provides that the Minister may make legislative rules prescribing matters required or permitted by the Act to be prescribed by the rules, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. The Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Principal Rule) is made under section 308 of the Act.
Subsection 29(1) of the Act authorises the rules to make provision for and in relation to empowering the Clean Energy Regulator (the Regulator) to vary a declaration under section 27 in relation to an area‑based offsets project so far as the declaration identifies the project area or project areas.
Subsection 166A(1) of the Act provides that the Regulator must publish on its website any information that is held by the Regulator and specified in the legislative rules for the purposes of subsection (2). Subsection 166A(2) provides that the legislative rules may specify information that is relevant to Australia meeting its obligations under any, or all, of:
- the United Nations Framework Convention on Climate Change (UNFCCC);
- the Kyoto Protocol;
- the Paris Agreement; or
- any other international agreement.
Purpose
The Carbon Credits (Carbon Farming Initiative) Amendment (Savanna Fire Management Projects) Rules 2026 (the Amendment Rule) amends the Principal Rule to restrict the variation of project areas of savanna fire management offsets projects (both emissions avoidance projects and sequestration projects) to ensure integrity of emissions accounting. Additionally, the Amendment Rule introduces a new publication requirement for the Regulator. This requires the Regulator to publish the vegetation fuel type map for each project. The overall purpose of the Amendment Rule is to increase the integrity and transparency of the Australian carbon credit unit scheme (the ACCU Scheme), particularly in relation to savanna fire management projects.
Background
The Act enables the crediting of greenhouse gas abatement from emissions reduction activities across Australia. Greenhouse gas abatement is achieved either by reducing or avoiding emissions, or by removing carbon from the atmosphere and storing it, consistent with Australia’s international obligations under the UNFCCC and the Paris Agreement.
The Act is supported by subordinate legislation, including the Principal Rule and methodology determinations (methods). The purpose of a method is to establish procedures for estimating abatement (emissions avoidance or sequestration) from eligible projects and rules for monitoring, record-keeping and reporting. Methods ensure that emissions reductions are genuine—that they are both real and additional to business as usual.
The ACCU Scheme is a key component of the Australian Government’s policy agenda to drive emissions reductions across the economy and meet its targets of at least a 43% reduction in emissions by 2030 (based on 2005 levels), a 62-70% reduction in emissions by 2035 (based on 2005 levels) and net zero emissions by 2050.
Savanna fire management projects enable projects that store carbon in living and dead biomass and avoid emissions through fire management to generate Australian carbon credit units (ACCUs). Strategic savanna fire management reduces greenhouse gas emissions by shifting the timing, frequency, and intensity of fires in Australia’s tropical savanna ecosystems from the late dry season to the early dry season.
The Amendment Rule complements the:
- Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026; and
- Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2026.
These two methods reflect the latest scientific advancements, maintain a higher integrity standard and better facilitate projects of all sizes across various regions.
Consultation
The Department undertook public consultation of the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026; and the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2026 to which this Amendment Rule complements. Although this instrument itself was not published for consultation, it is consistent with the policy objectives set out in the two methodology determinations. On the issue of publishing vegetation fuel type maps, the Department consulted on this matter through public consultation on the ACCU Scheme reforms, set out in the 25 August 2023 to 3 October 2023 ACCU Review discussion paper.
Details and Operation
The Amendment Rule is a legislative instrument for the purposes of the Legislation Act 2003.
Details of the Amendment Rule is set out in Attachment A. Numbered sections in this explanatory statement align with the relevant sections of the Amendment Rule.
Schedule 1 of the Amendment Rule commences at the same time as the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026.
Exemption from Sunsetting
The Amendment Rule is subject to the disallowance process under section 42 of the Legislation Act 2003 (Legislation Act) and the sunsetting regime set out in Part 4 of Chapter 3 of the Legislation Act; it is not exempt from sunsetting. However, section 48A of the Legislation Act has the effect that, because the Amendment Rule only amends another instrument, if it is not disallowed it will be automatically repealed at the end of the disallowance period. Once repealed, the sunsetting regime has no practical effect on the Amendment Rule.
Statement of Compatibility with Human Rights
The Amendment Rule is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.
Attachment A
Details of the Legislative Instrument
Section 1 – Name
Section 1 provides that the name of the Amendment Rule is the Carbon Credits (Carbon Farming Initiative) Amendment (Savanna Fire Management Projects) Rules 2026.
Section 2 – Commencement
This section provides for the Amendment Rule to commence at the same time as the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026.
The Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026 commences the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
Section 3 provides that the Amendment Rule is made under sections 166A and 308 and subsection 29(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011.
Section 4 – Schedules
Section 4 has the effect that the Amendment Rule amends the Carbon Credits (Carbon Farming Initiative) Rule 2015 in the manner set out in the Schedule.
Schedule 1—Amendments
This Schedule sets out amendments to the Principal Rule.
Item 1 – Sub-subparagraph 23(1)(cb)(i)(B)
Item 1 inserts “unless the area-based emissions avoidance project that the area of land is being moved to is covered by the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2026” after “former area-based emissions avoidance project” in sub-subparagraph 23(1)(cb)(i)(B).
As a result of Item 1, the Rule’s restriction on moving land between area-based projects does not apply where the receiving (transferee) project’s crediting period ends after the transferring (transferor) project’s crediting period. In these circumstances, the transferee project may have a later crediting period end date than the transferor project.
Item 2 – After section 23
Item 2 inserts new section 23A Project area or areas—savanna fire management projects.
New section 23A applies to savanna emissions avoidance projects or savanna sequestration projects (Savanna Fire Management Projects).
New section 23A clarifies when a section 27 declaration may be varied for Savanna Fire Management Projects - despite section 23 of the Principal Rule (which sets out the various circumstances where the Regulator may vary a section 27 declaration). Any variation of the section 27 declaration so far as the declaration identifies the project area or areas after the start of the crediting period may only be done to:
- add an additional project area (paragraph 23A(1)(a));
- remove an entire project area and replace it with subdivided project areas (paragraph 23A(1)(b));
- remove an entire subdivided project area and not replace it (paragraph 23A(1)(c)); or
- remove an entire project area from a project with more than one project area (but only in circumstances where all abatement calculations for the project area have been carried out separately from the other project areas throughout the crediting period) (paragraph 23A(1)(d)).
These limitations on varying section 27 declarations are required for the integrity of the ACCU Scheme as it only permits the variance of areas in a manner in which the determination can appropriately adjust calculations.
This section allows proponents to subdivide and remove project areas that contain a relevant weed species or ineligible vegetation fuel types. It is an eligibility requirement for Savanna Fire Management Projects to not contain relevant weed species as weed infested areas of land burn with higher intensity, which in turn produce more emissions and conflict with the objectives of the ACCU Scheme.
Subsection 23A(2) clarifies that the restriction to vary project areas does not apply to projects under the:
- Carbon Credits (Carbon Farming Initiative) (Reduction of Greenhouse Gas Emissions through Early Dry Season Savanna Burning—1.1) Methodology Determination 2013; or
- Carbon Credits (Carbon Farming Initiative—Emissions Abatement through Savanna Fire Management) Methodology Determination 2015.
This is because these determinations do not contain adjustments to calculations that would appropriately deal with such removals, in particular, a way to reverse the calculation of sequestered abatement for such areas.
Subsection 23A(3) defines a subdivided project area for the purposes of section 23A. The same definition as in the applicable methodology determination for the project should be used.
Item 3 – Section 53
Item 3 inserts “(1)” before “The”. This creates subsection 53(1) to facilitate Item 4 of the Amendment Rule (see below) which inserts new subsection 53(2) into the Principal Rule.
Item 4 – At the end of section 53
Item 4 inserts new subsection 53(2) into the Principal Rule.
New subsection 53(2) excludes the operation of section 53 in circumstances where the project is a transferee offsets project that is covered by either the:
- Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026; or
- Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2026.
The exclusion of the operation of section 53 in the above circumstances ensures the crediting period can be extended for transferee offsets projects covered by the 2026 Savanna Fire Management Determinations. For projects transferring to these methods, the Emissions Reduction Assurance Committee considered whether an extended crediting period would meet the legislated Offset Integrity Standards and agreed it would.
Item 5 – At the end of subsection 93A(1)
Item 5 adds new paragraph 93A(1)(i) and (j) at the end of subsection 93A(1).
Subsection 93A(1) sets out information that must be published by the Regulator in accordance with subsection 166A(2) of the Carbon Credits (Carbon Farming Initiative) Act 2011. Subsection 166A(2) of Act states that the legislative rules may specify information that is relevant to Australia meeting its obligations under:
- the Climate Change Convention;
- the Kyoto Protocol;
- the Paris Agreement; or
- Any other international agreement.
New paragraph 93A(1)(i) states that for Savanna Fire Management Projects, the Regulator must publish the vegetation fuel type map for each project.
However, new paragraph 93A(1)(j) provides an exception to this requirement if the Regulator has approved an application under subparagraph 93A(2)(b)(iii), in which case, the Regulator must publish a map which identifies any parts of the project areas that are classified as ineligible in accordance with the vegetation fuel type map.
This information will promote transparency and, accordingly, more confidence in project integrity. Third parties will be able to identify which areas of a project are not calculated as delivering abatement. Where areas of cleared land are observed but not represented in the vegetation fuel type map, this enables third parties to notify the Regulator who can then ensure proponents are aware of the need to update their vegetation fuel type maps, and alter their abatement calculations.
Item 6 – At the end of subparagraph 93A(2)(b)(ii)
Existing section 93A concerns the publication of relevant information. Existing subsection 93A(2) provides that certain information must not be published by the Regulator in certain circumstances.
Item 6 inserts new subparagraph 93A(2)(b)(iii) which provides an additional matter that the Regulator can be satisfied of when considering a project proponent’s application for non-publication in accordance with subsection 93A(2)(a).
The Regulator may be satisfied that the information set out in paragraph 93A(1)(i) (the vegetation fuel type map for a savanna emissions avoidance project or a savanna sequestration project) is subject to a contractual obligation between the project proponent and a person contracted to create or validate the information, which would be breached if the Regulator were to publish the information. If the Regulator is so satisfied, new subparagraph 9sA(1)(j), sets out an alternative type of map to be published (a map which identifies any parts of the project areas that are classified as ineligible in accordance with the vegetation fuel type map).
This exception provides flexibility for proponents, ensuring that they can satisfy their contractual obligations, while also maintaining an appropriate level of transparency in relation to individual projects.
Item 7 – At the end of Part 29
Item 7 inserts new Division 5 at the end of Part 29. New Division 5 sets out new section 129.
New section 129 deals with application provisions in relation to the Amendment Rule and establishes a transitional period of six months which begins on the commencement of the Amendment Rule (subsection 129(2)).
During the transitional period, the Regulator is not required to comply with paragraphs 93A(1)(i) or (j) in respect of information that is:
- held by the Regulator at commencement of Item 7, or
- acquired by the Regulator during the transitional period.
This transition period is intended to help ensure the Regulator has adequate time to prepare for publication of the new information, and to engage with proponents on the new requirement ahead of initial publication.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Carbon Credits (Carbon Farming Initiative) Amendment (Savanna Fire Management Projects) Rules 2026
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
Section 308 of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) provides that the Minister may make legislative rules prescribing matters required or permitted by the Act to be prescribed by the rules, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. The Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Principal Rule) is made under section 308 of the Act.
The Carbon Credits (Carbon Farming Initiative) Amendment (Savanna Fire Management Projects) Rules 2026 amends the Principal Rule to increase the integrity and transparency of the Australian carbon credit unit scheme; particularly in relation to savanna fire management projects. It clarifies how section 27 declarations of savanna fire management project areas may be varied. It also imposes a new requirement for the Clean Energy Regulator (the Regulator) to publish a map showing boundaries of each savanna fire management project which identifies ineligible and eligible project areas.
Subsection 29(1) of the Act authorises the rules to make provision for and in relation to empowering the Regulator to vary a declaration under section 27 in relation to an area‑based offsets project so far as the declaration identifies the project area or project areas.
Subsection 166A(1) of the Act provides that the Regulator must publish on its website any information that is held by the Regulator and specified in the legislative rules for the purposes of subsection (2). Subsection 166A(2) then provides that the legislative rules may specify information that is relevant to Australia meeting its obligations under any, or all, of:
- the United Nations Framework Convention on Climate Change;
- the Kyoto Protocol;
- the Paris Agreement; or
- any other international agreement.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon. Josh Wilson MP
Assistant Minister for Climate Change and Energy