Carbon Credits (Carbon Farming Initiative) (Conservative Estimates, Projections or Assumptions: Greenhouse Friendly Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012

Administered by Department of Climate Change, Energy, the Environment and Water

Legislation au F2012L02191 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Carbon Credits (Carbon Farming Initiative) Act 2011

 

DETERMINATION UNDER SUBSECTION 133(4)

 

  1. The Instrument is made under subsection 133 (4) of the Carbon Credits (Carbon Farming Initiative) Act 2011 (‘the Act’).
  2. Subsection 133 (4) provides that, for the purposes of the offsets integrity standards set out in section 133 of the Act, the Minister may determine, by legislative instrument, that a specified estimate, projection, or assumption is taken to be conservative.
  3. The offsets integrity standards set out in section 133 of the Act ensure that abatement of greenhouse gas emissions credited under the Carbon Farming Initiative meet internationally recognised offsets integrity criteria. These criteria are designed to ensure that abatement is real and verifiable.
  4. The criteria include the requirement that abatement be credibly measured or estimated. Conservative assumptions, numerical values and procedures must be used to ensure that abatement and other claims are not over-estimated. Under subsection 133 (4) of the Act, the Minister can determine that specified estimates, projections, or assumptions are, for the purposes of the offsets integrity standards, taken to be conservative.
  5. The Instrument, Carbon Credits (Carbon Farming Initiative) (Conservative Estimates, Projections or Assumptions) (Greenhouse FriendlyTM Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012 provides that the estimate set out in the Schedule of the instrument for alternative waste treatment projects transitioning from the Greenhouse FriendlyTM initiative is conservative. 
  6. Consultation was carried out in relation to the Instrument’s approach to crediting (the estimate taken to be conservative). This approach was published on the Department’s website:
  1. From 30 September 2011 to 9 November 2011 in the ‘Avoided Emissions from Diverting Legacy Waste from Landfill for Process Engineered Fuel Manufacture’ methodology proposal — as a result of this consultation, five public submissions were received and considered by the Domestic Offsets Integrity Committee in their endorsement of the proposal under Section 112 of the Act; and
  2. From 23 April 2012 to 2 June 2012 in the ‘Diversion of Legacy Waste to an Alternative Waste Treatment Facility’ and in the ‘Avoided Emissions from Diverting Waste from Landfill through a Composting Alternative Waste Technology’ methodology proposals — as a result of these consultations, four public submissions were received.

7.      The Instrument is a legislative instrument within the meaning of the Legislative Instruments Act 2003.

8.      A Statement of Compatibility prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011 is at Attachment A.

9.      The Instrument, Carbon Credits (Carbon Farming Initiative) (Conservative Estimates, Projections or Assumptions) (Greenhouse FriendlyTM Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012, commences retrospectively on the day it is made. Subsection 12 (2) of the Legislative Instruments Act 2003 provides that, for a legislative instrument to have effect before the date it is registered, it must not adversely affect the rights of any person or impose a liability on any person in respect of anything done or not done before the date of registration. The instrument does not offend against these requirements. Retrospective application confers a benefit in that it allows persons to apply for and generate Australian Carbon Credit Units in circumstances where they would not normally be eligible to apply.


Attachment A

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) (Conservative Estimates, Projections or Assumptions) (Greenhouse FriendlyTM Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012

The Legislative Instrument specified above 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

The Carbon Credits (Carbon Farming Initiative) (Conservative Estimates, Projections or Assumptions) (Greenhouse FriendlyTM Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012 (the Instrument) specifies that, for the purposes of section 133 of the Carbon Credits (Carbon Farming Initiative) Act 2011, certain abatement estimates, projections or assumptions for alternative waste treatment projects transitioning from the Greenhouse FriendlyTM initiative are conservative. 

Human rights implications

The Instrument does not engage any of the applicable rights or freedoms.

Conclusion

The Instrument is compatible with human rights as it does not raise any human rights issues.

 

Mark Dreyfus, Parliamentary Secretary for Climate Change and Energy Efficiency

 

Overview

The Carbon Credits (Carbon Farming Initiative) Act 2011 was enacted to provide a legislative framework for the Carbon Farming Initiative, which aims to support projects that reduce greenhouse gas emissions. This Act addresses the need for a mechanism to credit verifiable reductions in greenhouse gas emissions from activities that would not otherwise occur. The Parliament of Australia introduced this legislation to ensure that carbon credits generated under the Carbon Farming Initiative adhere to internationally recognised offsets integrity criteria, thus facilitating the participation of Australian projects in the global carbon market. The policy objective of the Act is to promote and support the reduction of greenhouse gas emissions through the Carbon Farming Initiative, ensuring that credits are credible, reliable, and verifiable. The Act empowers the Minister to determine, by legislative instrument, that certain estimates, projections, or assumptions are to be considered conservative for the purposes of the offsets integrity standards. This ensures that any claims of abatement are not overestimated and that the integrity of the carbon crediting process is maintained. The explanatory statement outlines the process of consultation and the endorsement of the methodology proposals by the Domestic Offsets Integrity Committee, reflecting the commitment to transparency and public participation in the development of the offsets integrity standards.

Scope and Application

The Carbon Credits (Carbon Farming Initiative) Act 2011 applies to persons and entities engaged in the carbon farming industry, including those managing projects that generate carbon credits through the abatement of greenhouse gas emissions. The Act's geographic reach is national, as it is a Commonwealth Act, affecting participants across Australia. The Act's provisions cover the estimation and crediting of carbon emissions abatement, ensuring these are measured or estimated credibly and conservatively. The Act allows the Minister to determine through subordinate legislation, such as the Carbon Credits (Carbon Farming Initiative) (Conservative Estimates, Projections or Assumptions) (Greenhouse FriendlyTM Initiative Transitional Crediting Calculation (Alternative Waste Treatment)) Determination 2012, that certain estimates, projections, or assumptions are conservative for the purpose of meeting offsets integrity standards. This ensures that any credits generated are verifiable and not overstated. The determination specifically applies to projects transitioning from the Greenhouse FriendlyTM initiative, providing them with a conservative estimate for crediting purposes. The determination is retrospective, allowing eligible persons to apply for and generate Australian Carbon Credit Units in circumstances where they might not otherwise have been eligible.

Key Provisions

The Carbon Credits (Carbon Farming Initiative) Act 2011, along with its determination under subsection 133(4), establishes a framework to ensure that greenhouse gas emissions abatement credited under the Carbon Farming Initiative adheres to internationally recognised offsets integrity criteria. Section 133(4) of the Act empowers the Minister to determine, through legislative instrument, that specific estimates, projections, or assumptions are considered conservative for the purpose of meeting these integrity standards. This determination is crucial for maintaining the credibility and verifiability of the abatement claims, ensuring that they are not overstated. The obligations imposed by this legislation on entities participating in the Carbon Farming Initiative primarily revolve around the accurate and conservative estimation of emissions abatement. Section 133 mandates that all estimates and calculations regarding greenhouse gas emissions reductions must be based on conservative assumptions to prevent overestimation. This requirement is integral to the integrity of the initiative, ensuring that the credits issued genuinely reflect the abatement achieved. Entities must therefore adhere to the conservative estimates and methodologies as determined by the Minister, ensuring transparency and reliability in their reporting. Failure to comply with the provisions of the Act, particularly in adhering to the conservative estimates and projections, can lead to significant consequences. While the specific penalties for non-compliance are not detailed in the explanatory statement, it is implied that breaches of the integrity standards could result in the invalidation of credits, fines, or other legal repercussions. Such breaches not only undermine the integrity of the Carbon Farming Initiative but also potentially harm the environment by falsely crediting non-existent or overstated emissions reductions. Therefore, entities are strongly encouraged to comply meticulously to avoid any adverse outcomes.

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