EXPLANATORY STATEMENT

Carbon Credits (Carbon Farming Initiative) Act 2011

Carbon Credits (Carbon Farming Initiative—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025

Legislative authority

Subsection 106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) empowers the Minister to make, by legislative instrument, a methodology determination.

Subsection 123(1) of the Act also empowers the Minister to revoke, by legislative instrument, a methodology determination.

Purpose

The Carbon Credits (Carbon Farming Initiative—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025 (the determination) credits emissions reduction achieved through the capture and destruction of methane generated by decomposing waste at landfill sites. Methane is a greenhouse gas 28 times more potent than carbon dioxide over a 100-year period. Capturing and combusting methane emissions converts the methane into carbon dioxide, reducing net emissions from landfills. Projects that capture methane from landfills and upgrade it into biomethane for use within Australia further reduce emissions by displacing fossil gas.

The determination sets out the criteria for establishing and managing a landfill gas project. Additionally, the determination sets out the process for monitoring, calculating, reporting, and crediting the greenhouse gasses abated as a result of a landfill gas project for the purpose of generating Australian carbon credit units (ACCUs).

Background

The purpose of and the requirements for the making of a methodology determination

The Act enables the crediting of greenhouse gas abatement from emissions reduction activities across the economy. Greenhouse gas abatement is achieved either by avoiding emissions or by carbon sequestration, which is the process of capturing atmospheric carbon and storing it in soil or trees. The process for establishing an offsets project, which is defined in section 5 of the Act, is set out in Part 3 of the Act. An offsets project must be covered by, and carried out in accordance with, a methodology determination.

A methodology determination sets out the requirements for a project to be an offsets project and establishes procedures for estimating abatement from eligible offsets projects, as well as the rules for monitoring, record-keeping, and reporting. Methodology determinations ensure that emissions reductions are genuine, real, and additional to business as usual.

When making a methodology determination, the Minister must have regard to the advice of the Emissions Reduction Assurance Committee (ERAC), an independent expert panel established to advise the Minister on integrity of methodology determinations. The Minister must not make or vary a methodology determination if the ERAC has advised that it does not comply with one or more of the offsets integrity standards (OIS). The OIS are set out in section 133 of the Act. In making a methodology determination, the Minister must be satisfied it complies with the OIS, and must have considered whether any adverse environmental, economic or social impacts are likely to arise as a result of projects to which a methodology determination applies.

Offsets projects carried out in accordance with a methodology determination and approved by the Clean Energy Regulator (the Regulator), can generate ACCUs which represent greenhouse gas abatement achieved by eligible offsets projects.

The ACCU Review and implementation of recommendation 10

In December 2022, an independent panel, led by former Chief Scientist Professor Ian Chubb concluded an independent review of Australian Carbon Credit Units (ACCU Review). The ACCU Review considered whether the Carbon Credits (Carbon Farming Initiative – Landfill Gas) Methodology Determination 2015 (the 2015 determination) and the Carbon Credits (Carbon Farming Initiative – Electricity Generation from Landfill Gas) Methodology Determination 2021 (the 2021 determination) met the OIS[1].

The ACCU Review found the ACCU Scheme arrangements are essentially sound, and made 16 recommendations to clarify governance, improve transparency, facilitate positive project outcomes and co-benefits, and enhance confidence in the integrity and effectiveness of the Scheme. Recommendation 10 of the ACCU Review stated that:

• “Landfill gas methods and crediting period extensions should incorporate upward sloping baselines.
  • 10.1 The baseline of new landfill gas projects and crediting period extensions of existing projects should be adjusted during the lifespan of the project.
  • 10.2 Arrangements should be made for the early review and voluntary adjustment to the baseline of existing projects.”

In January 2023, the Government accepted in-principle this and all other ACCU Review recommendations.

In June 2023, the Department of Climate Change, Energy, the Environment and Water (the department) established a technical working group to advise the government on the scientific improvements in landfill gas methane management, and the economic and regulatory context landfill gas projects operate in. The Landfill Gas Technical Working Group comprised of project proponents, industry peak bodies, state and territory environmental regulators, academics, consultants, the CSIRO, and auditors with technical experience in landfill gas management. The working group met 13 times from June 2023 to July 2025[2]. In May 2024, the department publicly consulted on options for reforming the 2015 determination and the 2021 determination.

The determination implements recommendation 10 and replaces the 2015 determination and the 2021 determination. It is informed by:

• the department’s analysis of data provided by landfill gas project proponents, national and international inventory data on methane capture, ACCU Scheme project data, data supplied by local councils for their landfills, and international waste emissions management policies;
• advice from the Landfill Gas Technical Working Group;
• feedback from public consultation on landfill gas method reform options contained in the May 2024 consultation on reform options; and
• feedback from public consultation on the exposure draft.

Consultation

ERAC consulted on an exposure draft of the determination. Consultation was open from 16 May 2025 for 28 days. Some extensions were granted on a case-by-case basis. 26 submissions were received. Further changes were made to the draft determination to respond to consultation feedback. Public submissions can be found on the department’s website.  

Operation of the determination

The determination provides rules and requirements for the following abatement activities:

• landfill gas projects that generate electricity from capturing and combusting landfill gas, either exclusively or in conjunction with flaring;
• landfill gas projects that combust landfill gas exclusively in a flare; and
• landfill gas projects that conduct biomethane activities – to capture landfill gas and produce biomethane to be used as a natural gas substitute in Australia

The determination establishes rules for implementing and monitoring offsets projects that avoid emissions by operating a landfill gas project undertaking these activities. Projects are also required to calculate net abatement amounts applicable to their project.

There are different types and sub-types of landfill gas capture and destruction projects that may be eligible under the determination. These projects are subject to different procedures to calculate their net abatement amount and different crediting periods.

The rules in the determination meet the requirements of the OIS set out in section 133 of the Act.

1.       Additionality: A method should result in carbon abatement that is unlikely to occur in the ordinary course of events (disregarding the effect of the Act). 
2.       Measurable and verifiable: A method involving the removal, reduction or emissions of greenhouse gases should be measurable and capable of being verified. 
3.       Eligible carbon abatement: A method should provide abatement that is able to be used to meet Australia’s international mitigation obligations. 
4.       Evidence-based: A method should be supported by clear and convincing evidence.
5.       Project emissions: Material greenhouse gas emissions emitted as a direct result of the project should be deducted.
6.       Conservative: Where a method involves an estimate, projection or assumption, it should be conservative.

Project proponents must make an application to the Regulator under section 22 or section 128 of the Act if they intend to have a landfill gas project declared as an eligible offsets project under the determination. They must also meet the general eligibility requirements for an offsets project set out in subsection 27(4) of the Act, which include compliance with the requirements set out in the determination, and meeting the additionality requirements set out in subsection 27(4A) of the Act. The additionality requirements are:

• the newness requirement;
• the regulatory additionality requirement; and
• the government program requirement.

Subsection 27(4A) of the Act provides that a methodology determination may specify requirements in lieu of the newness requirement or the regulatory additionality requirement.

The regulatory additionality requirement as specified in the Act applies to landfill gas projects covered by the determination. The government program requirement is provided for in the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Rule).

Sunsetting

The determination is not exempt from sunsetting, however, the operation of paragraph 5(b) of the determination means that it will cease to be in force on the day before it would otherwise be repealed in accordance with subsection 50(1) of the Legislation Act 2003.

Determination Details

The determination is a legislative instrument within the meaning of the Legislation Act 2003. The determination commences on the day after it is registered on the Federal Register of Legislation.

Details of the determination are at Attachment A. Numbered sections in this explanatory statement align with the relevant sections of the determination. The definition of terms highlighted in bold italics can be found in section 6 or the applicable sections of the determination.

For the purposes of subsections 106(4) and (4AA) of the Act, the Minister:

• has had regard to, and agrees with, the advice of the ERAC;
• is satisfied that the determination complies with the OIS; and
• has had regard to any adverse environmental, economic, or social impacts from the carrying out of the kind of projects to which the determination would apply.

For the purposes of subsections 106(4A) and (4B) of the Act:

• a project made in accordance with the determination would provide for eligible carbon abatement; and
• the determination complies with all of the OIS.

For the purposes of subsections 123(3) of the Act, the Minister requested ERAC advice on whether the Minister should revoke the Carbon Credits (Carbon Farming Initiative—Electricity Generation from Landfill Gas) Methodology Determination 2021 and gave regard to:

• whether the determination complies with the OIS;
• any relevant advice given by the ERAC; and
• other matters that the Minister considers relevant.

Statement of Compatibility with Human Rights

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

Glossary

In this Explanatory Statement, the following acronyms, abbreviations and terms are used:

Attachment A

Details of the Carbon Credits (Carbon Farming Initiative—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025

Part 1—Preliminary

Section 1 – Name

Section 1 sets out the full name of the determination as the Carbon Credits (Carbon Farming Initiative—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025.

Section 2 – Commencement

Section 2 provides for the determination to commence on the day after it is registered on the Federal Register of Legislation.

Section 3 – Authority

Section 3 states that the determination is made under subsections 106(1) and 123(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act).

Subsection 106(1) of the Act provides that the Minister may, by legislative instrument, make a certain type of methodology determination.

Subsection 123(1) of the Act provides that the Minister may, by legislative instrument, revoke a methodology determination.

Section 4 – Schedules

Section 4 states that each methodology determination specified in a Schedule to the determination is amended or revoked as set out in the applicable items in the relevant Schedule.

Additionally, section 4 states that any other item in a Schedule to the determination has effect according to its terms.

Section 5 – Duration

Section 5 sets out the period that the determination is in force – in accordance with subparagraph 122(1)(b)(i) of the Act.

The determination will remain in force between the commencement date (the day following registration on the Federal Register of Legislation) and the day before it would otherwise be repealed in accordance with subsection 50(1) of the Legislation Act 2003.

In practice, this means that the determination expires on 31 March 2036.

Section 6 – Definitions

Section 6 provides definitions for various terms used throughout the determination. Where a term is not defined in the determination, it has the same meaning set out in section 5 of the Act. Under section 23 of the Acts Interpretation Act 1901, words in a legislative instrument in the singular number include the plural and words in the plural number include the singular.

Section 6 includes a definition of NGA Factors document by incorporating the document entitled “National Greenhouse Accounts Factors” published by the department into the determination by reference, as in force from time to time as permitted by paragraph 106(8)(a) of the Act. As of 29 September 2025, it can be freely accessed via the department’s website and can be found amongst the climate change publications.[3]

Section 7 – Meaning of monitoring and control system

Section 7 specifies the meaning of a monitoring and control system for a flare, a monitoring and control system for a biogas upgrading system, and a monitoring and control system for an electricity generator.

In general, a monitoring and control system must be able to shut down the flow of gas to the combustion device (flare, biogas upgrading system, or electricity generator) if it is not operating to the manufacturer’s specifications. This is to ensure the methane sent to the combustion device is completely combusted.

Section 8 – Meaning of existing enhanced project

Section 8 provides the definition and requirements for an existing enhanced project.

Subsection 8(1) states that a project is an existing enhanced project if a project was an eligible offsets project covered by an earlier determination, in relation to that project, other than an upgrade project or a transitioning (upgrade) project within the meaning of the earlier determination. Additionally, an application must be approved under section 130 of the Act and the project must be a:

• biomethane conversion and displacement project;
• flaring only project; or
• electricity generation and flaring project.

Section 9 – Meaning of existing upgrade project

Section 9 provides the definition and requirements for an existing upgrade project.

Subsection 9(1) states that a project is an existing upgrade project if a project was an upgrade project or a transitioning (upgrade) project within the meaning of an earlier determination in relation to the project. Additionally, an application must be approved under section 130 of the Act.

Section 10 – References to factors and parameters from external sources

Subsection 10(1) states that any reference in a calculation in the determination, to a factor or parameter in another instrument or document, is a reference to the relevant factor or parameter in that instrument or document as in force at the end of the reporting period. This provision is important as it allows external sources of information, relevant to the determination, to be updated as needed from time to time without the need to amend the determination.

This is relevant as most parameters in the determination are derived from the National Greenhouse and Energy Reporting Regulations 2008 or the NGER (Measurement) Determination.

Subsection 10(2) states that subsection 10(1) does not apply if the determination specifies otherwise (paragraph 10(2)(a)), or if it is not possible to define or calculate a factor or parameter by reference to the instrument or writing as in force at the end of the reporting period (paragraph 10(2)(b)).

Paragraph 10(2)(b) is relevant for circumstances where the monitoring approach defined in an external source is amended to require additional or different monitoring practices after the reporting period has commenced. In these circumstances, it would not be possible or appropriate to undertake monitoring activities retrospectively in accordance with a new requirement.

Subsection 10(3) states that, if paragraph 10(2)(b) applies, the proponent must:

• ascertain the factor or parameter by reference to an earlier version of the instrument or writing; or
• make a conservative estimate of the factor or parameter by reference to any:
  • applicable measurement or estimate approaches in the NGER (Measurement) Determination;
  • relevant historical data for the project or other project data that is considered relevant; or
  • other matters that the proponent considers relevant.

Additionally, as section 10 of the Acts Interpretation Act 1901 and section 13 of the Legislation Act 2003 state that references to external documents which are legislative instruments (such as the NGER (Measurement) Determination) are references to versions of those instruments as in force from time to time, it is important to facilitate circumstances where this may not be possible or appropriate to do so.

Subsection 74(1) sets out the requirements to be followed in circumstances where paragraph 10(2)(b) applies. It is also expected that project proponents will use the version of an external document in force at the time at which monitoring or other actions were conducted.

Part 2—Landfill gas capture and destruction projects

Section 11 – Landfill gas capture and destruction projects

Section 11 states that, for the purposes of paragraph 106(1)(a) of the Act (which requires a methodology determination to specify the kinds of applicable offsets projects), the determination applies to an offsets project that features the collection and treatment of gas from a landfill site in a way that either destroys the methane (paragraph 11(1)(a)), or collects and treats by biogas upgrading at a project biomethane facility to produce biomethane. The biomethane is then sent to be reasonably expected to be combusted within Australia as a natural gas substitute (paragraph 11(1)(b)).

Subsection 11(2) states that a project covered by subsection 11(1) is a landfill gas capture and destruction project.

Subsection 11(3) states that the ‘landfill site’ mentioned in subsection (1) is the project landfill for the landfill gas capture and destruction project.

Subsection 11(4) states that, unless otherwise stated, a reference in the determination to an eligible offsets project is a reference to a landfill gas capture and destruction project that is an eligible offsets project.

Part 3—Project requirements

Division 1—Preliminary

Section 12 – Operation of this Part

Section 12 sets out the operation of Division 2, Division 3, Division 4, and Division 5 of Part 3 of the determination.

Subsection 12(1) states that, for the purposes of paragraph 106(1)(b) of the Act, Division 2 and Division 3 set out the requirements that must be met for landfill gas capture and destruction projects to be eligible offsets projects. These requirements include specifications of certain project types and project sub-types which landfill gas capture and destruction projects must belong to. Additionally, Division 2 and Division 3 set out the requirements for project types and project sub-types. The various requirements in Division 2 and Division 3 must be met for a project to be an eligible offsets project in accordance with paragraph 106(1)(b) of the Act.

A note to subsection 12(1) states that the section 22 application in relation to a project must include details of how the project meets all the requirements as set out in the determination, in accordance with paragraphs 13(1)(d) and (n) of the CFI Rule. Additionally, the note states that a section 128 application must include a statement that the project meets all requirements of the determination in accordance with paragraph 90(e) of the CFI Rule.

Subsection 12(2) states that, for the purposes of subparagraphs 27(4A)(a)(ii) and 27(4A)(b)(ii) of the Act, Division 4 specifies the requirements in lieu of the newness requirement (for certain projects) and the requirements in lieu of the regulatory additionality requirement. Subparagraphs 27(4A)(a)(ii) and 27(4A)(b)(ii) of the Act require that, in approving an eligible offsets project, the Regulator must be satisfied that a project meets the newness requirement and the regulatory additionality requirement. Alternatively, a methodology determination may specify requirements in lieu of the newness requirement and requirements in lieu of the regulatory additionality requirement.

Subsection 12(3) states that, for the purposes of paragraph 69(3)(b) of the Act, Division 5 specifies crediting periods for certain project types and project sub-types. Paragraph 69(3)(b) of the Act requires a methodology determination to specify the crediting period for an emissions avoidance project if it is not seven years.

Division 2—General project requirements

Section 13 – Project activities

Section 13 states that a landfill gas capture and destruction project must include one or more of the three listed project activities. These activities are:

• landfill gas capture for biomethane (paragraph 13(a));
• biomethane production (paragraph 13(b)); and
• emissions destruction (paragraph 13(c)).

Landfill gas capture for biomethane is an activity that involves collecting landfill gas and sending that landfill gas to a biogas upgrading system at a project biomethane facility.

Biomethane production is an activity that involves treating biogas, including from landfills, by upgrading it to produce biomethane at a project biomethane facility. It is intended that the resulting biomethane must be sent to an end use where it can reasonably be expected to be combusted within Australia as a natural gas substitute. Only biomethane produced from eligible biogas will contribute towards a project’s net abatement. Section 20 of the determination establishes the requirements for biomethane projects which achieve this intent.

Emissions destruction is an activity that involves collecting landfill gas and destroying that gas using a combustion device. This activity includes destruction of methane through flaring, as well as combustion of the methane to create electricity.

Division 3 of Part 4 specifies how baseline conversion abatement from each activity is to be accounted for, depending on the project type and project sub-type.

Section 14 – Project types

Section 14 sets out the different project types for landfill gas capture and destruction projects. The distinction between project types reflects that different approaches are needed to calculate the emissions reductions that are eligible to be counted towards the net abatement amount of the project. This is to ensure that the method aligns with the OIS.

Subsection 14(1) states that a landfill gas capture and destruction project must be one of the listed project types from column 1 (non-biomethane project, biomethane conversion and displacement project, biomethane displacement only project, or a restarting biomethane displacement only project) as well as one of the listed project types from column 2 (safeguard LFG project, or a non-safeguard LFG project). Projects are then classified as a particular project type in accordance with section 16.

Subsection 14(2) states that a project that is classified as a restarting biomethane displacement only project must not be subsequently classified as any other project. This subsection is intended to ensure that a restarting biomethane displacement only project is never reclassified as any other alternative project type. This restriction is necessary to prevent restarting biomethane displacement only projects from being reclassified under subsection 16(2)(c) of the determination as a biomethane displacement only project type, which would result in more crediting to the project than is intended by the determination.

The project type is important because it determines the project activities that contribute towards the project’s net abatement amount, and the emissions reductions that are eligible to be counted towards the net abatement amount of the project.

The Safeguard Mechanism is the Australian Government’s policy for reducing emissions at Australia’s largest industrial facilities. It sets legislated limits—known as baselines—on the greenhouse gas emissions of these facilities. These emissions limits will decline, predictably and gradually. These limits will help achieve Australia’s emission reduction targets of 43% below 2005 levels by 2030 and net zero emissions by 2050.

The Safeguard Mechanism commenced in 2016 and was reformed in 2023 to ensure that covered facilities contribute to meeting these targets. The reforms also help strengthen their competitiveness as the world moves to net zero emissions.[4]

The distinction between safeguard and non-safeguard projects in subsection 14(1) reflects that projects at safeguard facilities can only create ACCUs for a proportion of the methane captured and combusted or taken to be combusted. This is because these facilities have regulatory obligations to reduce emissions and would therefore reduce emissions even if the ACCU Scheme did not exist. This means some of the emissions reductions from projects at safeguard facilities are not additional for the purposes of subparagraph 27(4A)(b)(ii) of the Act.

Biomethane conversion and displacement projects could undertake any of the three project activities set out in section 13 and earn ACCUs for conversion abatement and displacement abatement associated with those activities. They must involve the installation of one or more biogas upgrading systems, and for biomethane conversion and displacement projects that undertake landfill gas capture for biomethane purposes, they must also involve biomethane production. This is to ensure that all biogas generated by the project under a landfill gas capture for biomethane activity is upgraded into biomethane as part of the project and sent for eventual combustion.

If a biomethane conversion and displacement project stops the biogas upgrading and biomethane production project activities, it continues as a biomethane conversion and displacement project because those activities are not mandated under section 13 of the determination. This prevents the project’s project type changing if a facility stops producing biomethane for a period of time. However, net abatement will only be calculated for project activities that are undertaken by the project (see section 32 of the determination). If a project stops biomethane production, no abatement from biomethane production will be credited.

Section 15 – Project sub-types for non-biomethane and biomethane conversion and displacement projects

Section 15 sets out the different project sub-types for non-biomethane projects and for biomethane conversion and displacement projects.

A note to section 15 states that project sub-types are not relevant for biomethane displacement only projects and for restarting biomethane displacement only projects because the net abatement for these project types do not involve conversion abatement.

Subsection 15(1) states that, subject to section 15, non-biomethane projects and biomethane conversion and displacement projects must, at all times, be one of the listed project sub-types from column 1 (new project, upgrade project, existing upgrade project, or an existing enhanced project) as well as one of the listed project sub-types from column 2 (electricity generation and flaring project, flaring only project, flaring only project (small and regional landfill), or a restarting flaring only project). Subsection 15(1) also states that if a project is a particular project sub-type, then it is classified as that project sub-type, if the classification occurs in accordance with section 16 of the determination.  

Project sub-types are necessary because they enable projects to be issued different crediting periods, different requirements in-lieu of newness provisions, and/or different approaches to calculating baseline conversion abatement in the determination. This reflects the fact that different project types have different emissions outcomes and need different requirements in order for the determination to meet the OIS.

Subsection 15(2) states that a non-biomethane project that is a restarting flaring only project is not required to be a project sub-type in column 1 of the table in subsection 15(1). This is because the restarting flaring only project exists to support a unique circumstance where a project cannot continue to generate electricity or biomethane from landfill gas. It therefore could not be a new project, an upgrade project, an existing upgrade project or an existing enhanced project.    

Subsection 15(3) states that a biomethane conversion and displacement project is not required to be a project sub-type in column 2 of the table in subsection 15(1). This allows biomethane conversion and displacement projects to be credited for conversion abatement even when a combustion device is not part of the project, for example, where all of the methane in landfill gas is upgraded into biomethane and taken to be combusted (for example if all the biomethane is injected into the gas grid).

A new project is defined in section 6 to mean a project that:

• installs a new landfill gas collection system to avoid emissions from a project landfill where there has not previously been such a system; or
• begin to combust landfill gas from a project landfill to produce electricity, where the landfill gas from the project landfill has not previously been combusted to produce electricity.

This definition ensures that the 12-year crediting period specified for new projects can only be accessed by projects that are newly installed or newly carrying out the specific activity of electricity generation. This allows flaring only projects to become electricity generation and flaring projects, register as a new project, and access a further 12-year crediting period from that point.  

This means that projects which carry out emissions destruction activities must be either existing projects under previous methodology determinations that have chosen to apply the determination to the project (existing enhanced projects or existing upgrade projects) or projects that are being recommenced after a period of time (upgrade projects), or projects that are new (or at least newly carrying out a specific activity, like electricity generation).

As baseline conversion abatement is worked out for the project in accordance with section 48 to section 51 of the determination, baseline conversion abatement is only relevant for project types that include conversion abatement calculations under Division 2 of Part 4 of the determination. Project requirements are defined more extensively in Division 3 of Part 3 of the determination.

Section 16 – Classification of a project as project type and sub-type

Section 16 states when and how a landfill gas capture and destruction project can be classified as a particular project type or project sub-type specified in sections 14 and 15. This provision ensures that the classification of landfill gas capture and destruction projects can only occur in a way that enables the Regulator to assess and determine whether supporting information meets project requirements, while providing project proponents greater autonomy to reclassify projects if those requirements have been met. Division 3 of Part 3 contains detailed provisions about requirements for project types and sub-types.  

Subsection 16(1) states that a landfill gas capture and destruction project must be classified as a project type or project sub-type on each applicable day mentioned in subsection 16(2). Additionally, it requires classification to be documented in the manner mentioned in subsection 16(2) for that particular day.  

Subsection 16(2) states that, for the purposes of subsection 16(1), the applicable days are as follows:

• On the day the project is declared as an eligible offsets project by the determination under section 27 of the Act (with the project type and project sub-type being nominated in the ‘section 22 application’ for a project) (paragraph 16(2)(a)). A ‘section 22 application’ provides that a person may apply to the Regulator for the declaration of an offsets project as an eligible offsets project.
• The first day of the reporting period for which the determination applies to the project following the approval of the application of the determination to the project under section 130 of the Act (with the project type and project sub-type being nominated in the ‘section 128 application’ for a project) (paragraph 16(2)(b)). Section 130 of the Act states that the Regulator may approve a section 128 application with effect from the start of a reporting period. A section 128 application provides that a project proponent may, during a reporting period for an eligible offsets project, request the Regulator to approve the application of a specified methodology determination to the project. This effectively allows proponents to transfer their projects so that it is covered by a new or updated methodology determination, where appropriate.
• The first day of the reporting period for which the project meets all the requirements for the new project type or sub type if the project changes its project type or sub-type during its crediting period (with the information required by section 73(1)(c) included in the offsets report for that reporting period) (paragraph 16(2)(c)). For example, if:
  • a project’s reporting period starts on 15 October 2025; and
  • a project only begins to meet the requirements of a different project type and sub-type on 1 October 2026; and
  • a project’s reporting period ends on 30 November 2026; then
  • a project may be classified as the new project type and sub-type at the start of the following reporting period which starts on 1 December 2026 – being the start date of the reporting period that the project met all the requirements of the particular project type and sub-type.
  • The offsets report for the reporting period which started on 1 December 2026 must include details of how the project meets all requirements of the different project type and sub-type.

While the determination operates so that most eligible offsets projects are prevented from changing project type or sub-type from the time they are declared or transitioned from another methodology determination, paragraph 16(2)(c) is intended to allow projects to begin to undertake biomethane production during the crediting period of the project. If the project receives less than 12 years of displacement abatement, that project may apply as a restarting biomethane displacement only project. Paragraph 16(2)(c) is also intended to allow project proponents of safeguard LFG projects to reclassify as non-safeguard LFG projects, if the project landfill is no longer a designated large facility for the purposes of the NGER Act, and vice versa, at the election of the project proponent. 

Section 17 – Information required for project applications

Section 17 sets out the information that is required to be included in project applications under section 22 or section 128 of the Act.

Paragraph 17(a) requires an application to be accompanied by a copy of the State or Territory licence in relation to a project landfill for the project (as in force at the time of making the application). The State or Territory licence is important for determining the regulatory proportion of methane combusted or taken to be combusted.  

Paragraph 17(b) requires written evidence that the project proponent intends to combust landfill gas to generate electricity for use on site, supply to the grid or both (subparagraph 17(b)(i)), to treat landfill gas by biogas upgrading at a project biomethane facility to produce biomethane (subparagraph 17(b)(ii)), or to combust landfill gas in a flare (subparagraph 17(b)(iii)).

Paragraph 17(c) requires specification of the project types and project sub-types to which the project belongs. This is necessary as the project type and project sub-type need to be classified in accordance with section 16.

Section 18 – Requirements for projects involving landfill gas capture for biomethane or emissions destruction

Section 18 states that there must be only one project landfill for a landfill gas capture and destruction project that involves landfill gas capture for biomethane (paragraph 18(a)) or emissions destruction (paragraph 18(b)). This is intended to prevent a single project, which may have different project types or sub-types, from being carried out across multiple project landfills. This would complicate attributing the correct baseline factor (WB) and/or legacy and non-legacy waste emission calculation to each landfill part of the project.

Note that this provision does not prevent landfill gas from multiple landfills from being combusted at the same combustion device or sent to the same biogas upgrading system at a biomethane facility. However, each landfill needs to be its own project landfill, and therefore a separate project, to allow for appropriate metering and measurement of landfill gas.  

Division 3—Requirements for project types and sub-types

Section 19 – Requirements for non-biomethane projects

Section 19 sets out the requirements (both substantive and application requirements) that need to be met for non-biomethane projects.

Subsection 19(1) states that the project landfill for a non-biomethane project must not also be a project landfill for another project that is:

• a non-biomethane project or a biomethane conversion and displacement project under the determination; or
• covered by another methodology determination, but the same in substance as a project mentioned above.

These requirements are intended to prevent multiple projects of different sub-types (which could have different baselines) abating the same landfill’s emissions as this scenario is not accounted for in the calculation of eligible net abatement. This also ensures that the calculation of net abatement appropriately accounts for additional project abatement.

Subsection 19(2) states that a section 22 application or a section 128 application in relation to a non-biomethane project must include a description of how inputs used for calculating net conversion abatement under the determination will cover the whole of the project landfill.

This information is needed to ensure the Regulator can appropriately assess the application.

Section 20 – Application requirements for biomethane conversion and displacement projects, biomethane displacement only projects and restarting biomethane displacement only projects

Section 20 sets out application requirements for biomethane conversion and displacement projects, biomethane displacement only projects, and restarting biomethane displacement only projects.

This is intended to assist the Regulator to assess whether the project will be able to deliver eligible net abatement.

Subsection 20(1) states that section 20 applies to the section 22 application or section 128 application in relation to a biomethane conversion and displacement project or a biomethane displacement only project (paragraph 20(1)(a)), and the section 22 application in relation to a restarting biomethane displacement only project (paragraph 20(1)(b)).

Subsection 20(2) requires applications to include certain specified information, including:

• which project activities will be carried out (paragraph 20(2)(a)),
• a description of at least one project biomethane facility in relation to the project (paragraph 20(2)(b)),
• a description of at least one biogas upgrading system that will be used for the project and details of its location (paragraph 20(2)(c)),
• a declaration by the project proponent for the project that biomethane produced can reasonably be expected to be combusted within Australia as a natural gas substitute (paragraph 20(2)(d)),
• and a description as to how the project can reasonably be expected to result in eligible carbon abatement (paragraph 20(2)(e)).

Notably, declarations are required under paragraphs 20(2)(d) and description required in 20(2)(e) to provide assurance that the project is likely to result in eligible carbon abatement, as this is a critical part of the OIS.

A note to section 20 states that additional biomethane facilities may be added to the project after its declaration as an eligible offsets project, provided that they are detailed in the relevant offsets report about the project.

Section 21 – Requirements for existing enhanced projects

Section 21 sets out the requirements (both substantive and application requirements) that need to be met for existing enhanced projects. An existing enhanced project is defined in section 6 to mean a flaring only project, an electricity generation and flaring project or a biomethane project that was an eligible offsets project covered by an earlier determination and lost its status as an eligible offsets project, as a result of revocation of the earlier determination before it could be declared as an eligible offsets project covered by this determination.

Subsection 21(1) states that the project proponent for an existing enhanced project must have invested in new infrastructure for the landfill gas collection system or biogas upgrading system for the project during the period that:

• started immediately after the project was declared as an eligible offsets project under an earlier determination in relation to the project (paragraph 21(1)(a)), or
• ended immediately before the making of the section 128 application in relation to the project (paragraph 21(1)(b)).

Subsection 21(2) requires the section 128 application in relation to an existing enhanced project to include a CEO statement, certifying:

• that the project proponent will invest further in the infrastructure for the landfill gas collection system or biogas upgrading system for the project, as the case requires (paragraph 21(2)(a)),
• that such investment will contribute to the project’s carbon dioxide equivalent net abatement amount (paragraph 21(2)(b)),
• that consultation, undertaken with the owner and operator of the project landfill or project biomethane facility and the State or Territory environmental regulator, by the project proponent supports paragraphs 21(2)(a) and 21(2)(b) (paragraph 21(2)(c)), and
• if the project landfill is, or is reasonably likely to become during the crediting period for the project, a designated large facility— that the operator of the landfill is aware of the effect of the safeguard provisions of the National Greenhouse and Energy Reporting Act 2007 in relation to carbon abatement of any covered emissions from the project landfill, and consents to the project on that basis.

Section 22 – Application requirements for upgrade projects and existing upgrade projects

Section 22 sets out the application requirements for upgrade projects and existing upgrade projects. These project types are intended to provide an avenue for further development of an existing or previously existing landfill gas collection system, to achieve abatement that would not otherwise occur. The requirements are intended to help ensure that the landfill gas collection system will be improved, so that these abatement outcomes can be achieved.

Section 22(1) requires a section 22 application or section 128 application in relation to an upgrade project to be accompanied by a CEO statement certifying:

• that the project proponent intends to further invest in the infrastructure for the landfill gas collection system or biogas upgrading system for the project, as the case requires (paragraph 22(a)),
• that such investment will contribute to the project’s eligible abatement (paragraph 22(b)), and
• that consultation, undertaken with the owner and operator of the project landfill or project biomethane facility, by the project proponent endorses the statements in paragraphs 22(1)(a) and 22(1)(b) (paragraph 22(c)).

Section 22(2) provides that if the project landfill for an existing upgrade project is, or is reasonably likely to become during the crediting period for the project, a designated large facility, the section 128 application in relation to the project must include a CEO statement certifying that the operator of the landfill is aware of the effect of the safeguard provisions of the National Greenhouse and Energy Reporting Act 2007 in relation to carbon abatement of any covered emissions from the project landfill, and consents to the project on that basis.

These existing upgrade projects are subject to less requirements as they would have already demonstrated continued investment as part of their declarations as upgrade or transitioning (upgrade) projects under an earlier determination. Additionally, these provisions are aimed at mitigating the risk of an existing upgrade project leaving the ACCU Scheme then re-applying as an upgrade project.

Section 23 – Requirements for flaring only projects

Section 23 sets out the requirements for flaring only projects.

Section 23 states that a flaring only project must be a project to which the following apply:

• the section 22 application or section 128 application in relation to the project includes a CEO statement that, the generation of electricity as part of the project is unlikely to provide a reasonable return on investment (based on modelling undertaken in the 12 months before the section 22 application or the section 128 application) (paragraph 23(a)),
• there is no regulatory or contractual obligation which requires combustion of landfill gas from the project landfill beyond that which would have been combusted without the project (paragraph 23(b)), and
• consultation, undertaken with the owner and operator of the project landfill or project biomethane facility, by the project proponent endorses the statements in paragraphs 23(a) and 23(b) (paragraph 23(c)).

Section 24 – Requirements for flaring only projects (small and regional landfill)

Section 24 sets out the requirements for flaring only projects at a small and regional landfill. A flaring only project (small and regional landfill) is a project sub-type introduced in the determination to incentivise abatement at small and regional landfills, which have additional barriers for participation in the ACCU Scheme.

Section 24 states that a flaring only project (small and regional landfill) must be a project to which the following apply:

• the section 22 application or section 128 application in relation to the project includes a CEO statement certifying that, the generation of electricity as part of the project is unlikely to provide a reasonable return on investment (based on modelling undertaken in the 12 months before the section 22 application or the section 128 application) (paragraph 24(a)),
• the average annual amount of waste received by the project landfill was less than 50,000 tonnes and the project landfill was not previously the project landfill for any other eligible offsets project (based on the three years preceding the section 22 application or the section 128 application) (paragraph 24(b)), and
• consultation, undertaken with the owner and operator of the project landfill or project biomethane facility, by the project proponent endorses the statements in paragraphs 24(a) and 24(b) (paragraph 24(c)).

Subparagraph 24(b)(ii) intends to ensure that projects which have demonstrated they are feasible at higher baselines are not able to have the concessions associated with small and regional landfills apply to their project.

Section 25 – Requirements for restarting flaring only projects

Section 25 sets out the requirements for restarting flaring only projects.

Section 25 states that a restarting flaring only project must be a project to which the following apply:

• neither electricity generation nor biomethane production can or does occur in respect of emissions from the project landfill on and after the day that is immediately before the day of the section 22 application or section 128 application or the start of the first reporting period for which the project is classified as a restarting flaring only project (paragraph 25(a)), and
• consultation, undertaken with the owner and operator of the project landfill, by the project proponent supports paragraph 25(a) (paragraph 25(b)).

Division 4—Newness and additionality

Division 4 sets out the requirements in lieu of the newness requirement (subparagraph 27(4A)(a)(ii) of the Act) and the additionality requirement (subparagraph 27(4A)(b)(ii) of the Act). These alternative requirements are to ensure that existing projects, or projects with existing infrastructure not currently in the scheme, are able to be declared as eligible offsets projects under the determination – provided they also meet the requirements of the project types or sub-types (Division 2 and Division 3). The proportion of methane combusted or taken to be combusted (WB) specified for each of these project types or sub-types ensures that abatement generated from these projects is still additional.

Section 26 – Requirement in lieu of newness requirement for new projects

Section 26 establishes the requirement in lieu of the newness requirement (under subparagraph 27(4A)(a)(ii) of the Act) for new projects.

The requirement is that the project is a new project i.e. the project meets the definition of new project in section 6 of the determination.

Section 27 – Requirement in lieu of newness requirement for restarting biomethane displacement only projects

Section 27 establishes the requirements in lieu of the newness requirement (under subparagraph 27(4A)(a)(ii) of the Act) for restarting biomethane displacement only projects.

The requirements are that the project is a restarting biomethane displacement only project and that the requirements for restarting a biomethane displacement only project (section 20) have been met.

This requirement recognises that restarting biomethane displacement only projects abate emissions from facilities that previously carried out an eligible offsets project.

Section 28 – Requirement in lieu of newness requirement for upgrade projects

Section 28 establishes the requirements in lieu of the newness requirement (under subparagraph 27(4A)(a)(ii) of the Act) for upgrade projects.

The requirements are that the project is an upgrade project and the requirements for an upgrade project (section 22) have been met.

This requirement recognises that upgrade projects have existing infrastructure but have improved gas collection abating emissions from the landfill which would lead to additional abatement.

Section 29 – Requirement in lieu of additionality requirement

Section 29 establishes the requirement in lieu of the regulatory additionality requirement for all projects under subparagraph 27(4A)(b)(ii) of the Act.

The requirement is that a project is a landfill gas capture and destruction project (subsection 11(2)).

This ensures that projects can still be credited in circumstances where there are some regulatory requirements that require the capture of methane from landfills. The regulatory baseline factor in the calculations for net abatement amount ensures that this portion is accounted for.

Division 5—Crediting period for projects

Section 30 – Crediting period for projects

Section 30 specifies the crediting period that applies to project types and project sub-types under the determination for the purposes of paragraph 69(3)(b) of the Act.

Paragraph 30(1)(a) states that a crediting period for a biomethane displacement only project is 12 years.

Paragraph 30(1)(b) states that a crediting period, for a restarting biomethane displacement only project, is 12 years minus the time between the start date of the first reporting period in which the project’s forerunner project first treated biogas to produce biomethane, and the end date of the crediting period of that forerunner project.

This allows a project that had received credits for less than 12 years of displacement abatement to re-enter the ACCU Scheme as a restarting biomethane displacement only project and access more ACCUs for a total of 12 years of displacement abatement at the landfill project. For example, if a non-biomethane project commenced in January 2026 and transitioned to a biomethane conversion and displacement project in January 2032 (which involves biomethane production), the project’s crediting period would end in January 2038 – being 12 years after it originally began. At that point, the project would only have been credited for 6 years of displacement abatement (between 2032 and 2038). The project could then re-enter as a restarting biomethane displacement abatement project under the determination with a remaining crediting period of 6 years.

Paragraph 30(1)(b) allows projects to be credited for a full 12-year displacement abatement crediting period, consistent with biomethane displacement-only projects, without being disadvantaged by having started biomethane production part-way through an existing eligible offsets project.

Paragraph 30(1)(c) states that a crediting period for a new project is 12 years.

The specified crediting period of 12 years will drive additional abatement. Specifying a period of 12 years is intended to provide project proponents enough certainty to make decisions to invest in new projects, or project upgrades, while ensuring that there is an appropriately timed review of the science (that justifies the net abatement calculation settings) to account for any new science relevant to the calculations that becomes available over time (as part of a crediting period extension review).

Paragraph 30(1)(d) states that the crediting period, for a restarting flaring only project or an upgrade project, is 144 months minus the number of months in the period that started when the determination came into force and ended when the section 22 application in relation to the project was made.

Paragraph 30(1)(e) states that the crediting period, for an existing upgrade project or an existing enhanced project is the period of 144 months; however, this is adjusted depending on the:

• crediting period of the project under each earlier determination in relation to the project; and
• number of months between the making of the determination and the making of the section 128 application.

The reason why the crediting period is expressed in months in paragraphs 30(1)(d) and (e) is to encourage proponents to spread out these section 128 applications, to avoid the Regulator from being required to assess potentially hundreds of applications within a 90-day timeframe.

It ensures greater fairness for proponents: if the crediting period is expressed in years, and the  project is declared 6 months and 1 day after the instrument is in force, this could be rounded to 1 year, which means the project proponent for the project would lose a full year of crediting compared to a project that was declared 2 days earlier.

This means that applicable projects will have different crediting periods depending on the date that they become a registered project under the determination, and the date they were first declared. This is intended to encourage existing projects to transition to the determination as quickly as possible, given the strengthened integrity controls under this new determination. If existing projects choose to continue to operate in accordance with previous methodology determinations and transfer to the determination when their crediting period ends, they will not gain any additional crediting period by doing so. For example, if a project under the 2015 determination was declared on, and started its crediting period on, 1 January 2021, its 12-year crediting period under that determination would end on 1 January 2033. This section operates so that if that project was registered under the determination (as an existing enhanced project) on 15 October 2032, that existing enhanced project would only receive 60 months (5 years) of further crediting as 2032 is 84 months (seven years) after the determination came into force.

Subsection 30(2) states that, for the purposes of paragraphs 30(1)(d) and (e), project proponents should round up or down to the nearest whole month.

Part 4—Net abatement amount

Division 1—Preliminary

Section 31 – Operation of this Part

Section 31 states that Part 4 of the determination contains formulae to calculate eligible net abatement for the purposes of crediting. The Act provides that one ACCU can be created for 1 tonne of carbon dioxide equivalent net abatement amount (see sections 12 and 18 of the Act). Paragraph 106(1)(c) of the Act provides that a methodology determination must specify how to calculate the carbon dioxide equivalent (CO2-e) net abatement amount for the project in relation to a reporting period.

Section 32 – What can be included in calculating net abatement

Section 32 specifies that a project may only include abatement associated with particular project activities when working out net abatement for a reporting period. The types of project activities that can contribute to the project’s net abatement depend on the project type.

Paragraph 32(a) specifies that the net abatement calculations for non-biomethane projects must only include conversion abatement attributable to emissions destruction worked out in accordance with Division 2 of Part 4.

Paragraph 32(b) specifies that the net abatement calculations for biomethane conversion and displacement projects must include the following:

• conversion abatement attributable to landfill gas capture for biomethane, worked out in accordance with Division 2 of Part 4,
• if the project activity undertaken is emissions destruction, conversion abatement attributable to emissions destruction, worked out in accordance with Division 2 of Part 4,
  • Conversion abatement from emissions destruction activities undertaken during a calendar month is only to be included in net abatement calculations if the project proponent has not chosen to exclude abatement from emissions destruction for that calendar month,
  • If abatement from emissions destruction is excluded for a calendar month, the project’s net abatement is to be worked out as if emissions destruction activities have not been undertaken by the project during that period, and
• displacement abatement attributable to biomethane production, worked out in accordance with Division 2 of Part 5.

Paragraph 32(c) specifies that the net abatement calculations for biomethane displacement only projects must only include displacement abatement attributable to biomethane production, worked out in accordance with Division 2 of Part 5.

Paragraph 32(d) specifies that the net abatement calculations for restarting biomethane displacement only projects must only include displacement abatement attributable to biomethane production, worked out in accordance with Division 2 of Part 5.

Section 33 – Working out net abatement

Section 33 establishes equation 1, used to calculate a landfill gas capture and destruction project’s net abatement amount for a reporting period. Total net abatement is the sum of net abatement attributable to conversion activities, worked out using equation 2 or equation 3, and net abatement attributable to displacement activities, worked out using equation 24.

This is subject to section 32, which specifies the type of abatement calculations a project can use.

Section 34 – Inputs and parameters

Section 34 sets out instructions regarding the inputs and parameters used in the net abatement calculation.

Subsection 34(1) sets out that inputs used to calculate the net conversion abatement amount are for the whole landfill. This is relevant in the context that the NGER (Measurement) Determination provides calculation approaches that apply to a part of a landfill (a sub-facility zone), which are not appropriate for calculating the net abatement amount.

Subsection 34(2) states that, if the same parameter is an input to more than one equation in the determination, then the method used to determine the value used for that parameter must be the same in each circumstance.

Division 2—Working out conversion abatement

Subdivision 1—Overview

Section 35 – Overview of gases accounted for in conversion abatement calculations

Section 35 sets out the greenhouse gas sources that are assessed to determine the net conversion abatement amount. These are shown in the table labelled ‘Greenhouse gas abatement and emissions’.

A number of emissions sources are excluded from the conversion abatement calculations for the following reasons:

• Emissions from generating, collecting, transporting, processing and disposing of the waste that generates landfill gas collected in the project are excluded because these activities are common to both the baseline and project.
• Carbon dioxide emissions emitted from the decay of organic waste in a landfill or the combustion of landfill gas are excluded because these emissions have a biogenic origin (originate from organic material). This means that without the project, this carbon dioxide from organic material would have been released.
• Emissions from using fuel or electricity to operate the landfill gas system, including any processing of the landfill gas, are excluded based on analysis of data from existing landfill gas projects showing that this emission source is immaterial. Note that emissions from fuel consumption for biomethane activities and purchased electricity for biomethane activities are included in the gases accounted for in abatement calculations.
• Emissions of nitrous oxide from the combustion process are excluded because it is an immaterial amount. Methane emissions from the combustion device are included through the application of a destruction efficiency factor in the calculation of abatement.

Subdivision 2—Method for calculating net conversion abatement amount

Section 36 – Simplified outline of this Subdivision

Section 36 provides an overview of how net conversion abatement is calculated. For landfill gas capture and destruction projects, the net conversion abatement amount is calculated as project abatement minus baseline abatement. This is a different approach to some other ACCU Scheme methodology determinations where total emissions after a project has been carried out are compared to total emissions that would otherwise have occurred. The approach instead compares the emissions abatement that occurs at a project with the expected abatement that would have occurred at the project in the absence of the ACCU Scheme.

For biomethane conversion and displacement projects or restarting biomethane conversion and displacement projects that only upgrade biogas sourced from the project landfill, an alternative calculation approach is available that works out gross abatement based on the amount of biomethane produced. From this total, any project operating emissions (for example fuel-use emissions) are deducted to derive net abatement.

Section 37 – Net conversion abatement amount

Section 37 sets out how the net conversion abatement amount is to be worked out.

Subsection 37(1) provides that net conversion abatement for a biomethane conversion and displacement project that only undertakes biogas upgrading of landfill gas from the project landfill can be worked out by using either Method 1 or Method 2. Otherwise for other projects, it is to be worked out using Method 1.

The two methods provided to work out net conversion abatement amounts are:

• Method 1 in subsection 37(2) works out the conversion abatement for the project landfill, based on the amount of methane destroyed or taken to be destroyed by the landfill project (equation 2). Method 1 can be used by all landfill gas capture and destruction projects (apart from displacement only projects).
• Method 2 in subsection 37(4) provides an alternative calculation method that works out conversion abatement based on the output of both project landfill and project biomethane facilities (equation 3). Conversion abatement from emissions destruction is worked out in the same manner as with Method 1. However, in Method 2, conversion abatement arising from landfill gas capture for biomethane is worked out by determining the quantity of methane sent out by project biomethane facilities. Method 2 is intended to reduce monitoring requirements for projects that produce biomethane, allowing abatement to be worked out directly through measurement of produced biomethane rather than requiring measurement of sent-out biogas on a project landfill basis as in Method 1. To ensure that conversion abatement is only being accredited for destruction of methane that is part of the project, paragraph 37(1)(a) specifies that Method 2 can only be used by biomethane conversion and displacement projects that only upgrade biogas sourced from the project landfill. No biogas from non-project sources is to be imported to the project for biogas upgrading.

Subsections 37(3) and 37(5) specify circumstances in which net abatement for a project landfill is zeroed for a reporting period. This occurs if the project landfill sends biogas to a biogas upgrading system, but that gas is not upgraded into biomethane that could be reasonably expected to be combusted in Australia as a natural gas substitute. This would be triggered if, for example, landfill gas sent from a project landfill was vented to the atmosphere.

Subsection 37(6) analogously zeroes the net abatement for a project biomethane facility under Method 2 if biomethane produced by that facility could not be reasonably expected to be combusted in Australia as a natural gas substitute.

Subdivision 3—Method for calculating project conversion abatement

Section 38 – Simplified outline of this Subdivision

Section 38 sets out a summary of the method for calculating project conversion abatement.

For safeguard LFG projects, this means that only emissions reductions from waste deposited before 1 July 2016 are eligible for ACCUs. This is similar to the approach taken for waste deposited during the operation of the Carbon Pollution Reduction Scheme between 2012 and 2014. Emissions reductions from waste deposited during the period that policy was operational, are not eligible for ACCUs.

Section 39 – Project conversion abatement

Subsection 39(1) sets out that for projects working out conversion abatement using Method 1 in section 35, the project proponent determines the project conversion abatement amount for each reporting period using equation 4, which has 2 elements:

• the amount of methane that is combusted which was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste during the reporting period (MCom, NCT).

less

• the portion of this combusted methane that was not generated from carbon tax waste and, in the case of a safeguard LFG project, not generated from non-legacy waste, and that, without the project, would have been oxidised in the near surface conditions of the landfill (MCom, Ox).

Methane is destroyed naturally as it travels from lower to higher segments of a landfill. This ‘oxidation’ occurs before the methane is released into the atmosphere. It would occur even in circumstances where no offsets project is at the landfill. However, because projects capture and combust methane before it travels from lower to higher segments of the landfill, it must be accounted for and subtracted from the project conversion abatement.

Subsection 39(2) analogously sets out that for projects working out conversion abatement using Method 2 in section 37, the project proponent determines the project conversion abatement amount for each reporting period using equation 5, which has 2 elements:

• the amount of methane that is combusted through emissions destruction activities which was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste, during the reporting period
  (MCom, NCT, ED).

less

• the portion of this combusted methane that was not generated from carbon tax waste and, in the case of a safeguard LFG project, not generated from non-legacy waste, and that, without the project, would have been oxidised in the near surface conditions of the landfill l (MCom, Ox).

Offsets projects that reduce covered emissions at safeguard facilities (within the meaning of the National Greenhouse and Energy Reporting Act 2007) are only able to be credited for their reduction in non-covered emissions. The reduction in covered emissions is regulated, and therefore not a reduction of additional emissions. Because emissions from non-legacy waste (waste deposited at a landfill before 1 July 2016) are not covered by the Government’s Safeguard Mechanism, offsets projects at safeguard facilities can continue to receive ACCUs for any reductions in these emissions. This is consistent with the approach taken for emissions that were regulated under the carbon pollution reduction scheme, also referred to as the ‘carbon tax’. Because of that policy, the method only credits the destruction of emissions from non-carbon tax waste. Waste deposited between 1 July 2012 and 1 July 2014 generates landfill gas that is not eligible for emissions reduction credits. This waste is referred to as carbon tax waste.

Section 40 – Methane combusted or taken to be combusted that was not generated from carbon tax waste and, in the case of a safeguard LFG project, not generated from non-legacy waste

Subsection 40(1) sets out, for projects working out conversion abatement using Method 1 in section 37, how to determine the amount of methane that is combusted, or taken to be combusted, which was not generated by carbon tax waste. This means the methane from waste except from waste deposited between 1 July 2012 and 1 July 2014. For safeguard LFG projects, the conversion abatement calculation also excludes any abatement from covered emissions, being emissions that are generated from non-legacy waste.

This calculation is worked out using equation 6, which has 3 elements:

• the default conversion factor used to express the result of this calculation in carbon dioxide equivalent (ɣ).

 multiplied by

• the total volume of methane combusted or taken to be combusted (irrespective of whether it was generated by carbon tax waste or not, or non-legacy waste or not) (MCom) – when worked out under section 43 for the purposes of equation 6, MCom accounts for both methane combusted by combustion devices and methane taken to be combusted by biogas upgrading systems).

multiplied by

• the proportion of the methane combusted or taken to be combusted that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste (WNCT).

Similarly, subsection 40(2) sets out, for projects working out conversion abatement using Method 2 in section 37, how to determine the amount of methane that is combusted, or taken to be combusted, which was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste. This means the methane from waste except from waste deposited between 1 July 2012 and 1 July 2014, and in the case of a safeguard LFG project, the methane generated from waste except waste deposited after 1 July 2016.

This calculation is worked out using equation 7, which has 3 elements:

• the default conversion factor used to express the result of this calculation in carbon dioxide equivalent (ɣ).

multiplied by

• the total volume of methane combusted through emissions destruction activities (irrespective of whether it was generated by carbon tax waste or not, or non-legacy waste or not) (MCom) – when worked out under section 44 for the purposes of equation 7, MCom only accounts for methane combusted by combustion devices.

multiplied by

• the proportion of the methane combusted through emissions destruction activities that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste (WNCT).

Section 41 – Proportion of methane combusted or taken to be combusted that was not generated from carbon tax waste

Subsection 41(1) sets out the calculation for the proportion of methane combusted that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste (WNCT). This calculation is performed on a financial year basis in line with calculations in the NGER (Measurement) Determination. As flexible reporting periods could be up to 2 years in length, a reporting period could span up to 3 financial years and not necessarily align with financial years. In the case that a reporting period covers more than one financial year, then a single proportion must be derived for the reporting period.

To achieve this, the proportion of methane generated in the landfill that is generated from carbon tax waste, and in the case of a safeguard LFG project, generated by legacy waste, is worked out for each financial year y that the reporting period partly or fully covers. The proportion for each financial year y is then adjusted by multiplying by the proportion of methane combusted in the reporting period that was combusted in each financial year y. Summing these adjusted proportions calculates the result (WNCT) for the reporting period. For example, if 10% of the methane combusted in a reporting period was combusted in the 2025-26 financial year and the other 90% in the 2026-27 financial year, then the proportion calculated for the reporting period is 10% multiplied by the proportion for 2025-26 added to 90% multiplied by the proportion for 2026-27.

A benefit of this calculation approach is that the calculation of WNCT in one reporting period would be applicable for other reporting periods falling within the same financial year.

Equation 8 consists of 2 main parts. The first part is to adjust the proportions calculated for more than one financial year. This part of the equation has 2 terms:

• the amount of methane combusted in the financial year y (MCom,y).

divided by

• the amount of methane combusted in the reporting period (MCom).

These parameters are worked out in accordance with section 44. For the case of MCom,y the calculations are carried out as if the reporting period is the part of the reporting period occurring in financial year y. This calculation requires inputting the amount of methane sent to the combustion device calculated in section 45, which is worked out based on the same time period. If the reporting period is completely within a single financial year, then MCom,y would equal MCom and the proportion equals one and can be ignored.

The second part of the equation calculates the proportion of the methane generated that was not generated by carbon tax waste and, in the case of a safeguard LFG project, not generated by non-legacy waste for the financial year y. It consists of 3 terms:

• the amount of methane that was generated by carbon tax, and, in the case of a safeguard LFG project, generated by non-legacy waste in the financial year y (MCTW,y).

divided by

• the total amount of methane that was generated by the landfill in the financial year y (MGen, y).

subtracted from

• one so that it represents the proportion not generated by carbon tax waste, and the case of a safeguard LFG project, not generated by non-legacy waste.

Subsection 41(2) sets out that the methane generated from carbon tax waste, and, in the case of a safeguard LFG project, generated from non-legacy waste, in a particular financial year y (MCTW,y) is worked out using the NGER (Measurement) Determination. The calculation is performed using the assumption that the only waste disposed of in the landfill is carbon tax waste, and in the case of a safeguard LFG projects the calculation is based on carbon tax waste and non-legacy waste. Inputs for waste that is not carbon tax waste are zero, and in the case of a safeguard LFG project inputs for waste that is not non-legacy waste are zero.

Subsection 41(3) states that the total methane generated in the landfill in a particular financial year y (MGen, y) is worked out using the NGER (Measurement) Determination (paragraph 41(3)(a)). In addition, this calculation is performed for all waste that has been disposed of in the project landfill. Paragraphs 41(3)(b) and 41(3)(c) set out how other parameters that are also estimates of methane generation in a landfill are calculated. These similar instructions are grouped together in this section of the determination to avoid repetition. The NGER (Measurement) Determination calculates landfill gas generation on a financial year basis.

Subsections 41(4), 41(5) and 41(6) set out requirements for circumstances where landfill gas generation is being calculated for a 12-month period that is not a financial year. As the 12-month period will partly cover 2 financial years, subsection 41(6) requires that landfill gas generation be calculated for both of these financial years, and the result be multiplied by the proportion of days in the particular year that fall in each financial year. The results are then summed to work out the landfill gas generation for the particular year.

Section 42 – Methane combusted or taken to be combusted

Subsection 42(1) sets out equation 9 that calculates the volume of methane combusted or taken to be combusted in the project MCom as the sum of methane combusted by each combustion device h, or taken to be combusted by each biogas upgrading system of a project biomethane facility h, in cubic metres, (MCom, h).

Subsection 42(2) specifies that if MCom is being worked out for the purposes of calculating the methane combusted through emissions destruction activities for the project landfill during a reporting period that was not generated from carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste, MCom, NCT, ED, h means a combustion device. Subsection 42(2) applies when the project’s conversion net abatement is being worked out using Method 2 under section 37. Restricting MCom to combustion devices avoids double counting of conversion abatement arising from landfill gas sent to biogas upgrading systems, as under Method 2 conversion abatement from landfill gas sent to biogas upgrading systems is accounted for in equation 3.

The methane combusted by combustion device h, or taken to be combusted by biogas upgrading system h, during the reporting period, in cubic metres (MCom, h), is worked out using.

• equation 10 where h is a biogas upgrading system or a combustion device that is a boiler, a flare with monitoring and control system, or an internal combustion engine system; and
• equation 11 where h is a combustion device that is not a boiler, a flare with monitoring and control system or an internal combustion engine.

Subsection 42(3) establishes equation 10 that determines the amount of methane combusted by a combustion device h or taken to be combusted by biogas upgrading system h using the following parameters:

• The amount of methane sent to the combustion device or biogas upgrading system (MSent, h), worked out using equation 12 or 13.
• The biomethane production loss factor, PLh, identifies the percentage of gas lost during the biogas upgrading process, worked out in accordance with section 46. The factor 1-PLh gives the percentage of gas that is not lost during the biogas upgrading process. The biomethane production loss factor is only relevant for biogas sent to a biogas upgrading system.
• The transport loss factor, TLh, identifies the percentage of gas lost during transport, prior to combustion. For landfill gas sent to a combustion device, or landfill gas upgraded into biomethane where the biomethane is used on-site, this factor is assumed to be zero – transport losses are taken to be negligible. For landfill gas upgraded into biomethane that is combusted off-site, it is conservatively estimated that some gas will be lost during the transport process. A conservative factor of 2% is applied in this circumstance, based on an average of the unaccounted-for gas fractions for states and territories in the NGA Factors document. This value takes a weighted average of the state and territory factors weighted by the proportion each jurisdiction represents of Australia’s total gas consumption (based on the Australian Energy Statistics 2020), and accounts for the NGA Factors attributing 55% of unaccounted for gas to leakage. The factor 1-TLh gives the percentage of gas that is not lost during transport.
• A default destruction efficiency factor (DE), which is 1 for internal combustion engines and 0.98 for other combustion devices.

Subsection 42(4) sets out equation 11 that determines the amount of methane combusted (MCom, h) for combustion devices that are not boilers or flares with monitoring and control systems, or internal combustion engines.

Equation 11 uses the amount of methane sent to the combustion device h in hour a (MSent, h, a) and a default destruction efficiency factor (DE) as explained above but includes a third term that is the operation of the combustion device h in each hour a of the reporting period (Oh, a). Inclusion of Oh, a ensures that the amount of methane sent to the combustion device when the combustion process is not occurring in a satisfactory manner (and therefore may not be properly combusting the methane) is excluded from the calculation of net abatement. If the combustion process of the device is occurring satisfactorily in an hour (if the combustion device is operating in accordance with the manufacturers’ instructions for the complete combustion of methane) then the value is one and otherwise it is taken to be zero.

For both equations 10 and 11, any landfill gas that is sent to a combustion device when it is not being operated in accordance with the manufacturer’s instructions must be excluded, in line with the project requirements in Part 6 of the determination.

Section 43 – Methane sent to combustion device or biogas upgrading system

Subsection 43(1) outlines 3 methods, in equations 12, 13 and 14, to calculate the methane sent to a combustion device h or biogas upgrading system h (Msent, h). The reference in this subsection that this amount is worked out for a particular period indicates that, depending on the output required, the calculation is carried out for different periods. These time bases are the default reporting period (calculating MSent, h), the hour a in the reporting period (calculating MSent, h, a) or the year y (calculating MSent, h, y).

Each of the 3 methods requires a different monitored parameter, either the volume of landfill gas sent to the combustion device or biogas upgrading system together with the proportion of landfill gas that is methane (applying a monitored value) in equation 12, the energy content of the landfill gas sent to the combustion device that is not an internal combustion engine in equation 13 or the electricity produced by the combustion device (this method is only applicable to internal combustion engines) in equation 14.

Subsection 43(2) (method 1) provides equation 12, which is the method of using measurement of the volume of landfill gas sent to the combustion device. The equation has 2 terms:

• the volume of landfill gas sent to combustion devices or biogas upgrading systems (QLFG, h), which is a monitored parameter

multiplied by

• the fraction of the volume of landfill gas sent to combustion devices or biogas upgrading systems that is methane (WLFG, CH4), which is a monitored parameter subject to subsection 43(3).

Subsection 43(3) states that, for a flaring only project for which the project landfill as  a closed landfill, the value of 0.30 may be assigned to (WLFG, CH4) if the project proponent for the project wishes to.

Subsection 43(4) (method 2) provides equation 13, which is the method using measurement of the energy content of landfill gas sent to the combustion device. The equation has 2 terms:

• the energy content of landfill gas sent to combustion devices (QEn, h), which is a monitored parameter

divided by

• the energy content factor for landfill gas (ECLFG), which is sourced from the NGER (Measurement) Determination.

Subsection 43(5) (method 3) provides equation 14, which is the method that uses measurement of the electricity generated from combusting landfill gas in an internal combustion engine. The equation has 4 terms:

• the electricity generated from combusting landfill gas in an internal combustion engine h (QEG, h), which is a monitored parameter

multiplied by

• the factor that converts megawatt hours to gigajoules, which is 3.6

divided by

• the factor for electrical efficiency of the internal combustion engine, which is the factor specific to the internal combustion device h and landfill gas fuel, which is the amount of electricity produced from an amount of landfill gas, expressed as a percentage. If this factor is not stated in the manufacturer’s specifications for the internal combustion engine, then an amount of 36% is used

divided by

• the energy content factor for landfill gas that is captured for combustion (methane only) (ECLFG), which is sourced from the NGER (Measurement) Determination.

Section 44 – Methane combusted that was not generated from carbon tax waste (and, in the case of a safeguard LFG project, not generated by non-legacy waste) and that would have been oxidised in near surface conditions

Section 44 sets out equation 15, which is used to calculate the amount of methane combusted or taken to be combusted in the project that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste, that would have been oxidised in the near surface conditions of the landfill (MCom,Ox). Under the project activity, this oxidation effect is reduced, as a part of the landfill gas is collected and does not pass through the top layer of the landfill. Given a proportion of the methane combusted in the project would also have been combusted in the baseline scenario, oxidation in the near surface conditions of the landfill only needs to be accounted for the amount of methane combusted that is beyond what would have been combusted in the baseline scenario. This is done using the baseline proportion value of WB. The oxidation factor (OF) is sourced from the NGER (Measurement) Determination and is a default value indicating how much of the methane passing through the near surface layer of the landfill is converted to carbon dioxide. The equation has 3 terms:

• the methane that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste combusted in the project (MCom,NCT).

multiplied by

• the oxidation factor (OF), which is a default value sourced from the NGER (Measurement) Determination.

multiplied by

• the proportion of the methane combusted in the reporting period that would otherwise have been combusted without the project subtracted from one (1 – WB). The effect of subtracting from one is to calculate the proportion of the amount combusted that goes beyond the amount combusted without the project.

Section 45 – Methane destroyed in biomethane produced by project biomethane facilities

Section 45 sets out in equation 16 how the volume of methane sent out from a project biomethane facility, BCf, is estimated. Biomethane produced by a project must be reasonably expected to be combusted within Australia as a natural gas substitute. As such, BCf represents the volume of methane taken to be destroyed from biogas generation for biomethane activities.

Equation 16 multiplies the total volume of biomethane sent out by a biogas upgrading system that is part of a project biomethane facility (QBM, k), estimated in accordance with Division 2.3.6 of the NGER (Measurement) Determination, by the proportion of that biomethane that is methane (WBM, CH4, k), worked out in accordance with the monitoring requirements. This is summed over all biogas upgrading systems at the project biomethane facility, resulting in the total volume of methane sent out by that facility during the reporting period.

In equation 16, the total volume of methane sent out is multiplied by one minus the transport loss factor (1-TLBM, f) and destruction efficiency factor (DEBM), which respectively serve the same function as TL and DE in section 43 in accounting for methane that is not ultimately combusted due to loss.

Section 46 – Biomethane production loss factor

Subsection 46(1) states that the biomethane production loss factor for a combustion device is zero. This eliminates the biomethane production loss factor when calculating abatement for emissions destruction under section 39(2). For biogas upgrading systems, the biomethane production loss factor is worked out in accordance with subsection 46(2).

Subsection 46(2) specifies that the biomethane production loss factor must be worked out or measured, as a fraction, in accordance with the manufacturer of the biogas upgrading system’s specifications. Determination of this factor may be used where the manufacturer sets out values representing the proportion of gas lost during the upgrade process when using a particular device. Measurement of this factor must take place in accordance with the manufacturer’s specifications.

Subsection 46(3) specifies that, for paragraph 46(2)(a), if the manufacturer’s listed specifications for the biomethane production loss factor include a range of values, the highest of those values is to be selected. This ensures estimates and factors are conservative, consistent with the OIS.

Division 3—Method for calculating baseline conversion abatement

Section 47 – Simplified outline of this Division

Section 47 sets out a summary of Division 3 which states that baseline conversion abatement is calculated as the amount of methane combusted or taken to be combusted by the project that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste, multiplied by the proportion representing the amount of methane combusted or taken to be combusted during the reporting period for the project that would have been combusted without the project.

The determination of this proportion depends on the project sub-type.

Section 48 – Baseline conversion abatement

Section 48 establishes equation 17, which is used to calculate baseline conversion abatement. It has 2 terms.

• the methane that was not generated by carbon tax waste, and in the case of a safeguard LFG project, not generated by non-legacy waste combusted or taken to be combusted in the project (MCom, NCT), calculated in section 40.

multiplied by

• the proportion of the methane combusted in the reporting period that would have been combusted without the project (WB).

Section 49 – Proportion of methane that would have been combusted without the project – new projects

Subsection 49(1) establishes equation 18 which determines how the proportion of methane that would have been combusted without the project should be calculated if the project is a new project.

A new project is a project that collects landfill gas:

• by installing a landfill gas collection system to avoid emissions from a landfill for which no such system has previously been installed; or
• from a project landfill and begins to combust it in a new electricity generator in circumstances where landfill gas from the project landfill has never previously been combusted to produce electricity.

As set out in equation 18, the project proponent uses the higher of the 2 following proportions:

• the regulatory proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project, which is derived using Schedule 1 based on quantitative regulatory requirements (WB, Reg);
• the default proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project (WB, Def).

The table in subsection 49(1) instructs the proponent how to work out the value of (WB, Def) for different project sub-types.

Table item 1 deals with the case of a new project that is an electricity generation and flaring project. It applies an upward sloping baseline factor to the project from a baseline of 0.37. It provides that for the first 12 months after a project receives its dual classification (year 1) as a new project that is an electricity generation and flaring project, the value of (WB, Def) is 0.37. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.37 to the result of multiplying 0.005 by the number of years since the project was classified as an electricity generation and flaring project (not including year 1). For example, if a project is first classified in 2030, then in 2035, its baseline factor for the relevant reporting period would be 0.37 + (0.005 x 4) = 0.39.

Table item 2 deals with the case of a new project that is a flaring only project. It applies an upward sloping baseline factor to the project from a baseline of 0.30. It provides that for the first 12 months after a project receives its dual classification (year 1) as a new project that is a flaring project, the value of (WB, Def) is 0.30. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.30 to the result of multiplying 0.005 by the number of years since the project was classified as a new project that is a flaring only project (not including year 1). For example, if a project is first classified in 2030, then in 2035, its baseline factor for the relevant reporting period would be 0.30 + (0.005 x 4) = 0.32.

Table item 3 deals with the case of a new project that is a flaring only project (small and regional landfill). It applies an upward sloping baseline factor to the project from a baseline of 0.00. It provides that for the first 12 months after a project receives its dual classification (year 1) as a new project that is a flaring only project (small and regional landfill), the value of (WB, Def) is 0.00. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.00 to the result of multiplying 0.005 by the number of years since the project was classified as a new project that is a flaring only project (small and regional landfill) (not including year 1). For example, if a project is first classified in 2030, then in 2035, its baseline factor for the relevant reporting period would be 0.00 + (0.005 x 4) = 0.02

Table item 4 deals with the case of a new project and a biomethane conversion and displacement project. It provides that for the first 12 months after a project is classified as a new project (year 1), the value of (WB, Def) is 0.37. In then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.37 to the result of multiplying 0.005 by the number of years in the period that started when the project was classified as a new project and ended at the end of the reporting period (not including year 1). For example, if a project is first classified in 2030, then in 2035, its baseline factor for the relevant reporting period would be 0.37 + (0.005 x 4) = 0.39

Subsection 49(2) provides that when rounding to the nearest year for the purposes of the table in subsection (1), a period of six months is to be rounded up.

Section 50 – Proportion of methane that would have been combusted without the project—upgrade projects, existing enhanced projects or restarting flaring only projects

Subsection 50(1) establishes equation 19 which determines the proportion of the methane combusted or taken to be combusted during a reporting period that would have been combusted without the project, for upgrade projects, existing enhanced projects, and restarting flaring only projects.

As set out in equation 19, the project proponent uses the higher of the 2 following proportions:

• the regulatory proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project, which is derived using Schedule 1 based on quantitative regulatory requirements (WB, Reg).
• the default proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project (WB, Def).

The table provides that the value of (WB, Def) in a reporting period depends on the project sub-type.

Table item 1 deals with the case of an existing enhanced project and an electricity generation and flaring project. It provides that for the first 12 months after a project is classified as an existing enhanced project (year 1), the value of (WB, Def) is 0.40.It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.40 to the result of multiplying 0.005 multiplied by the number of years since the project was classified as an existing enhanced project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). This specifies the starting baseline and operationalises the upward slope.

Table item 2 deals with the case of a restarting flaring only project. It provides that for the first 12 months after a project receives that classification (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.30 to the result of multiplying 0.005 by the number of years since the project was classified as a restarting flaring only project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). This specifies the starting baseline and operationalises the upward slope.

Table item 3 deals with the case of an existing enhanced project that is a flaring only project. It provides that for the first 12 months after a project is classified as an existing enhanced project (year 1), the value of (WB, Def) is 0.30. It then provides that for every year after year 1,  the value of (WB, Def) increases. The increase is to be determined by adding 0.30 to the result of multiplying 0.005 by the number of years since the project was classified as an existing enhanced project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). This specifies the starting baseline and operationalises the upward slope.

Table item 4 deals with the case of an upgrade project that is also an electricity generation and flaring project. It provides that for the first 12 months after the project is classified as an upgrade project (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases.  The increase is to be determined by adding 0.40 to the result of multiplying 0.005 by the number of years since the project was classified as an upgrade project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). This specifies the starting baseline and operationalises the upward slope.

Table item 5 deals with the case of an upgrade project and a flaring only project. It provides that for the first 12 months after the project is classified as an upgrade project (year 1), the value of (WB, Def) is 0.30. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.30 to the result of multiplying 0.005 by the number of years since the project was classified as an upgrade project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). This specifies the starting baseline and operationalises the upward slope.

Table item 6 deals with the case of an upgrade project and a biomethane conversion and displacement project. It provides that for the first 12 months after the project is classified as an upgrade project (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.40 to the result of multiplying 0.005 by the number of calendar years since the project was classified as an upgrade project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). If the project was originally classified as a non-biomethane project and an upgrade project, the number of years elapsed should be considered since the time the project first received classification as an upgrade project.

Table item 7 deals with the case of an existing enhanced project and a biomethane conversion and displacement project. It provides that for the first 12 months after the project is classified as an existing enhanced project (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.40 to the result of multiplying 0.005 by the number of calendar years since the project was classified as an existing enhanced project (not including year 1) and ending at the end of the reporting period (rounding to the nearest year). If the project was originally classified as a non-biomethane project and existing enhanced project, the number of years elapsed should be considered since the time the project first received classification as an existing enhanced project.

Subsection 50(2) provides that when rounding to the nearest year for the purposes of the table in subsection (1), a period of six months is to be rounded up.

Section 51 – Proportion of methane that would have been combusted without the project – existing upgrade projects

Section 51 establishes equation 20 which determines the proportion of the methane combusted or taken to be combusted for a reporting period that would have been combusted without the project. The project proponent uses the highest of the following proportions:

• the regulatory proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project (WB, Reg).
• the default proportion of the methane combusted or taken to be combusted during the reporting period that would have been combusted without the project (WB, Def).
• means the proportion of the methane combusted or taken to be combusted in the reporting period that would have been combusted without the project as it was calculated under an earlier determination in relation to the project, or 0 (if the proportion of methane combusted or taken to be combusted without the project was not calculated for the project under an earlier determination) (WB, Ex).

The policy intent is that existing upgrade projects must use their existing baseline factor if it is higher than the default.

Subsection 51(2) provides that the value of (WB, Def) in a reporting period depends on the project sub-type(s) and provides a table to determine (WB, Def) based on the project type.

Table item 1 deals with the case of an existing upgrade project and an electricity generation and flaring project. It provides that for the first 12 months after the project is classified as an existing upgrade project (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.40 to the result of multiplying 0.005 by the number of whole years in the period that starts on the day this determination came into force and ends at the end of the reporting period. The number of years elapsed is to be rounded to the nearest year.

Table item 2 deals with the case of an existing upgrade project and a flaring only project. It provides that for the first 12 months after the project is classified as an existing upgrade project (year 1), the value of (WB, Def) is 0.30. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.30 to the result of multiplying 0.005 by the number of whole years in the period that starts on the day this determination came into force and ends at the end of the reporting period. The number of years elapsed is to be rounded to the nearest year.

Table item 3 deals with the case of an existing upgrade project and a biomethane conversion and displacement project. It provides that for the first 12 months after the project is classified as an existing upgrade project (year 1), the value of (WB, Def) is 0.40. It then provides that for every year after year 1, the value of (WB, Def) increases. The increase is to be determined by adding 0.40 by the result of multiplying 0.005 by the number of whole years in the period that starts on the day this determination came into force and ends at the end of the reporting period. The number of years elapsed is to be rounded to the nearest year.

Subsection 51(3) states that the value of (WB, Ex) means the proportion of the methane combusted or taken to be combusted in the reporting period that would have been combusted without the project as it was calculated under an earlier determination in relation to the project, or 0 (if the proportion of methane combusted or taken to be combusted without the project was not calculated for the project under an earlier determination). This means that if the project under an earlier determination calculated a value for (WB, Ex) in accordance with an earlier determination, and an earlier determination was the applicable methodology determination in relation to the project at the time the section 128 application for the existing upgrade project was made, then the value of (WB, Ex), as calculated under the earlier determination, is the value for (WB, Ex) for the reporting period.

This sets the baseline factor and operationalises the upwards slope.

Subsection 51(4) provides that when rounding to the nearest year for the purposes of the table in subsection (2), a period of six months is to be rounded up.

Division 4—Project emissions from landfill gas capture for biomethane

Section 52 – Simplified outline of this Division

Section 52 sets out a summary of Division 4 which provides how project emissions for conversion abatement from landfill gas capture for biomethane activities are worked out. Project emissions are the emissions that are attributable to the use of equipment for landfill gas capture for biomethane activities. These include emissions from fuel and electricity used to conduct the project. The total project emissions are subtracted from a project’s gross abatement for a reporting period.

Section 53 – Project emissions from landfill gas capture for biomethane—conversion and displacement abatement

Subsection 53(1) establishes equation 21 which determines how project emissions from landfill gas capture for biomethane activities are worked out for a project landfill. They are the sum of emissions from fuel that is specifically attributable to the operation of the project for the treatment of landfill gas by landfill gas capture for biomethane, during the reporting period (including transport) (EF, LFG-BM) and emissions from purchased electricity that is specifically attributable to the treatment of landfill gas by landfill gas capture for biomethane, the during the reporting period (EPE, LFG-BM).

Subsection 53(2) states that when working out EF, LFG-BM and EPE, LFG-BM, emissions associated with the biomethane production project activity, as worked out under equation 22 and equation 23, should be disregarded. This includes emissions from fuel and electricity used to operate biogas upgrading systems, and any emissions associated with the transport of biomethane.

A note specifies that this provision exists to ensure double counting of project emissions does not occur. Project emissions for the biomethane production project activity are accounted for under net displacement abatement calculations and worked out under Division 5 of Part 5. Specifying that project emissions associated with biomethane production are not to be accounted for under conversion abatement project emissions ensures that the same emissions are not being accounted for twice.

Note that project emissions associated with biomethane production will be accounted for in a project’s net emissions. This is because a project that undertakes landfill gas capture for biomethane must also undertake biomethane production.

Section 54 – Emissions from fuel use for landfill gas capture for biomethane

Subsection 54(1) establishes equation 22 which is the calculation for estimating emissions from fuel used that is specifically attributable to the operation of the project for the treatment of landfill gas by landfill gas capture for biomethane activities during the reporting period. Methane, nitrous oxide and carbon dioxide emissions from fuel use are calculated from the quantity of each fuel type used, QF, LFG-BM, i, the energy content factor for each fuel type, ECi, and the emissions factor for each greenhouse gas type, EFij. Emissions from each fuel type and greenhouse gas are summed to estimate the total emissions from fuel used to undertake the project activity.

Estimates of the amount of fuel used must be worked out in accordance with the monitoring requirements.

Subsection 54(2) provides that if fuel is used by the project landfill in performing a function that was also performed before the implementation of the project, the fuel use that is attributable to the operation of the project is only to the extent that the project has caused an increase in fuel use.

Section 55 – Emissions from purchased electricity use—conversion abatement

Subsection 55(1) establishes equation 23 which is the calculation for estimating the emissions from purchased electricity that is used to undertake the project activity. Equation 23 multiplies the amount of purchased electricity that is specifically attributable to the operation of the project landfill during the reporting period, QPE, LFG-BM, with EPE, LFG-BM, the emissions factor for electricity obtained from the electricity grid.

The electricity grid from which electricity is sourced may or may not be an electricity grid that is a grid in relation to the NGA Factors document.

The definition of EFPE, LFG-BM states that:

• whenever possible, the project proponent must apply the relevant emissions factor from the NGA Factors document that is in force at the end of the reporting period (in accordance with section 10); or
• where the electricity used to undertake the project activity is not sourced from a grid in relation to which the NGA Factors document applies, the project proponent must apply:
  • a factor that reflects the emissions intensity of the electricity - for example, this could be a factor provided by the supplier of the electricity; or
  • if this factor is not known, then the factor for off-grid electricity (provided in the NGA Factor document) must be used.

Subsection 55(2) specifies how the emissions factor must be calculated for the purposes of subparagraph (b)(i) of the definition of EFPE, LFG-BM. In these circumstances, the emissions factor must be worked out by using the amount of electricity sent out and be worked out using a measurement or estimation approach that is consistent with the NGER (Measurement) Determination.

Part 5—Working out displacement abatement

Division 1—Overview of gasses

Section 56 – Overview of gasses accounted for in displacement abatement calculations

Section 56 describes the emissions sources that need to be accounted for to determine the total net abatement amount resulting from project activities that generate displacement abatement.

Division 2—Method for calculating net displacement abatement amount

Section 57 – Simplified outline of this Division

Section 57 provides an overview of how net displacement abatement is worked out.

Displacement abatement amounts are worked out for each project biomethane facility, based on the quantity of biomethane produced under the assumption biomethane displaces natural gas on a one-to-one basis, and summed to determine gross displacement abatement. The gross abatement is then multiplied by the proportion of biogas that is ineligible biogas. This ensures that biomethane created from ineligible waste sources do not contribute towards the project’s net displacement abatement.

From this adjusted total, project-operating emissions are deducted to derive net abatement.

Section 58 – Net displacement abatement amount

Subsection 58(1) establishes equation 24 which calculates the net displacement abatement amount attributable to biomethane production (Adisplacement) based on the sum of the net abatement amounts for project biomethane facilities (Adisplacement, h) that are part of the project, multiplied by a factor alpha The factor alpha is either zero or 1, at the election of the project proponent. This is to allow projects that undertake biomethane production at a project biomethane facility, to elect not to claim displacement abatement ACCUs. Proponents may elect this if they consider it more beneficial for them claim a PGO certificate for the biomethane.

Subsection 58(2) specifies that if during the reporting period, biomethane produced by a project biomethane facility cannot be reasonably expected to be combusted within Australia as a natural gas substitute, the net abatement amount for that project biomethane facility is taken to be zero for that reporting period.

Section 59 – Project biomethane facility net abatement amount

Section 59 establishes equation 25 which calculates the net abatement amount, Adisplacement, f in tonnes CO2‑e for each project biomethane facility. The equation takes the gross displacement abatement for that facility, GAdisplacement, f, multiplies it by the eligible abatement fraction for that facility (EAh), and subtracts the project emissions for the facility,
PEdisplacement, f.

Section 60 – Certain abatement must not be included in calculating net abatement amount

Subsection 60(1) specifies that for the purposes of working out Adisplacement, under equation 25, the project cannot include abatement from a project biomethane facility that undertakes biomethane production and sends some or all of the biomethane produced to be used as an energy source in a fuel switching emissions reduction activity at an emissions avoidance offsets project within the meaning of the Act.

Subsection 60(2) specifies that a fuel switching emissions reduction activity means the changing of energy sources in a way that results in eligible carbon abatement. Paragraphs 60(2)(a) to 60(2)(d) set out a non-exhaustive list of activities under methodology determinations that would constitute a fuel switching emissions reduction activity. Activities that involve changing the energy sources in a way that results in eligible carbon abatement that are not specified in paragraphs 60(2)(a) to 60(2)(d) may still constitute a fuel switching emissions reductions activity within the meaning of the determination.

Displacement abatement credited under the determination credits the avoidance of emissions associated with natural gas combustion emissions displaced by biomethane produced by the project.

There is the potential for this biomethane to be used under another ACCU Scheme project for the purposes set out in subsection 60(2), and for that second project to also receive ACCUs for replacing a high-emissions fuel source for the same biomethane credited under the determination. This situation would result in a single unit of biomethane earning ACCUs for displacing natural gas or other fuels twice – once under the determination as displacement abatement, and once under the fuel switching project. To prevent this ‘double credit’ from occurring, section 60 prevents a project biomethane facility’s displacement abatement from contributing to a project’s net abatement if some, or all of the biomethane it produces is used for a fuel switching purpose in another ACCU Scheme project.

Division 3—Gross abatement amount

Section 61 – Simplified outline of this Division

Section 61 provides an overview of how net displacement abatement is worked out for a project biomethane facility for a reporting period, being the emissions avoided from the carrying out of biomethane production.

Section 62 – Gross abatement amount for a project biomethane facility

Section 62 sets out in equation 26 the gross abatement amount for a project biomethane facility. It is the total quantity of biomethane sent out by biogas upgrading systems that are part of the project biomethane facility (QBM, k) multiplied by both the energy content factor for pipeline natural gas (ECNG) and the carbon dioxide combustion emissions factor for pipeline natural gas (EFNG, CO2). Both factors are based on values in the NGER (Measurement) Determination.

Equation 26 operates by assuming a one-to-one displacement of natural gas based on the volume of biomethane produced. The emissions avoided will be the emissions associated with that quantity of natural gas being combusted – these emissions are worked out by multiplying the gas volume QBM, k by the natural gas energy content and emissions factors, as if that volume of gas were pipeline natural gas.

A note to the section defining EFNG,CO2 clarifies that methane and nitrous oxide emissions are constant regardless of whether biomethane or natural gas is combusted. Combustion of gas will result in small amounts of methane and nitrous oxide greenhouse gas emissions due to incomplete combustion. These emissions occur for both natural gas and biomethane, and hence biomethane production and use does not displace these emissions – they will occur anyway. As such, only the natural gas emissions factor for carbon dioxide (EFNG, CO2) is used when working out displacement abatement.

Division 4—Eligible abatement fraction

Section 63 – Simplified outline of this Division

Section 63 provides an overview of how the eligible abatement fraction is worked out for a project biomethane facility for a reporting period. The eligible abatement fraction is the proportion of gross displacement abatement associated with biomethane produced from eligible biogas, on a project biomethane facility basis, during a reporting period. It prevents the crediting of displacement abatement for biomethane produced from ineligible biogas. If 30 per cent of a project biomethane facility’s biogas comes from ineligible sources, the eligible abatement fraction for that project biomethane facility will be 70 per cent.

The eligible abatement fraction is worked out as the total quantity of eligible biogas that a project biomethane facility upgrades during a reporting period divided by the total quantity of biogas upgraded by that facility during that reporting period. The quantity of eligible biogas sent from a biogas source facility is worked out either by, if possible, direct measurement of the quantity of eligible biogas sent by that facility for upgrading, and otherwise through estimation based on the method provided in Division 4.

Section 64 – Eligible abatement fraction for a project biomethane facility

Section 64 sets out in equation 27 the eligible abatement fraction for a project biomethane facility. It is given by the total volume of eligible biogas sent to the project biomethane facility by biogas source facilities, divided by the total volume of biogas sent to the project biomethane facility by biogas source facilities.

Section 65 – Determining the quantity of eligible biogas from a biogas source

Paragraph 65(1)(a) specifies that the volume of eligible biogas sent to a project biomethane facility from a biogas source facility during a reporting period (QBG, El, g) is to be worked out by, if possible, measurement of QBG, El, g in accordance with the monitoring requirements. If it is not possible to measure QBG, El, g in this way, paragraph 64(1)(b) specifies that QBG, El, g is to be worked out in accordance with subsection 65(2) instead.

A note to this subsection clarifies that measurement of QBG, El, g is possible if either all biogas from a biogas source facility is eligible, or if the eligible biogas from that facility is physically separated in a way that permits direct measurement of the volume of eligible biogas. For example, if a wastewater facility that supplies biogas to a project biomethane facility has two anaerobic digesters – one that treats only eligible biogas waste and the other that treats ineligible biogas waste – it would be possible to measure the volume of eligible biogas by measuring biogas sent from the anaerobic digester that treats the eligible biogas waste. It would not be possible to measure QBG, El, g if the biogas from a biogas source facility was a mix of eligible and ineligible biogas. In the wastewater facility example, this might arise if the facility only had a single anaerobic digester that treated both eligible and ineligible biogas waste. If this mix occurs, QBG, El, g must be worked out in accordance with subsection 65(2) instead.

Subsection 65(2) sets out in equation 28 how QBG, El, g is to be worked out for paragraph 64(1)(b). QBG, El, g is given by the proportion of biogas sent by the biogas source facility during a reporting period that is eligible biogas (EBg) multiplied by the volume of biogas sent by the biogas source facility during the reporting period (QBG, g).

Subsection 65(3) specifies that, for the purposes of subsection 65(2), an accurate and conservative value for EBg must be worked out based on data and calculations that are auditable and verifiable. This is done by either:

• working out the proportion of eligible biogas waste to biogas waste treated to produce biogas from biogas source facility g for a reporting period, by methane-producing capacity or by mass (paragraph 65(3)(a)), or
• using another approach that can reasonably be expected to provide a fraction that accurately reflects the proportion of eligible biogas for biogas source facility g for a reporting period (paragraph 65(3)(b)).

The effect of subsection 65(3) is that if it is not possible to physically measure the volume of eligible biogas produced by a biogas source facility during a reporting period, it may be estimated using a reasonable approach based on a metric relating to the quantities of eligible and ineligible biogas waste treated. The project proponent must have access to data that would allow formulation of such an estimate and will need to clearly report how this value has been derived. If a project biomethane facility receives biogas from a range of sources, the project proponent will need to be able to determine the eligibility of biogas for each of those biogas source facilities and must provide this information in offsets reports for the project.

Subsection 65(4) specifies that if it is not possible to work out the volume of eligible biogas sent by a biogas source facility (QBG, El, g) in accordance with subsection 65(1), QBG, El, g is taken to be zero for the reporting period. This may occur if direct measurement fails and no data is available to provide an estimate in accordance with subsection 65(2), or if the approach to work out QBG, El, g under subsection 65(2) uses an estimate for EBg that cannot be reasonably expected to be accurate and conservative.

Division 5—Displacement abatement project emissions

Section 66 – Simplified outline of this Division

Section 66 provides an overview of how project emissions for displacement abatement are worked out. Project emissions are worked out for each project biomethane facility that undertakes biomethane production during the reporting period.

Section 67 – Project emissions—displacement abatement

Subsection 67(1) sets out in equation 29 how project emissions are worked out for a project biomethane facility. They are the sum of emissions from fuel (EF, displacement, f) and emissions from purchased electricity (EPE, displacement, f) attributable to the operation of the project biomethane facility and transport of biomethane produced by that facility during the reporting period.

Subsection 67(2) specifies that in working out EF, displacement, f and EPE, displacement, f, fuel and purchased electricity used in landfill gas capture for biomethane and emissions destruction activities are to be disregarded, as these emissions are accounted for in a project’s net abatement under Division 4, Part 4 and including them here would result in a double count. Examples of emissions to be disregarded may include fuel and electricity used in the collection of landfill gas or transport of landfill gas to a biogas upgrading system. This provision may be relevant if a facility is both a project landfill undertaking landfill gas capture for biomethane or emissions destruction, and a project biomethane facility undertaking biomethane production. In such a case, fuel and electricity consumption would need to be apportioned based on the project activity that uses that fuel or electricity. Displacement abatement project emissions are anticipated to primarily stem from fuel and electricity used in biogas upgrading systems and any transport of that biomethane to an end-user.

Section 68 – Emissions from fuel use—displacement abatement

Subsection 68(1) sets out in equation 30 the calculation for estimating emissions from fuel used at a project biomethane facility or from transport of biomethane produced at that facility to an end user. Methane, nitrous oxide and carbon dioxide emissions from fuel use are calculated from the quantity of each fuel type used, QF, displacement, f, i, the energy content factor for each fuel type, ECi, and the emissions factor for each greenhouse gas type, EFij. Emissions from each fuel type and greenhouse gas are summed to estimate the total emissions from fuel used to undertake the project activity. This equation converts the emissions from each fuel type to a common measure of energy, the gigajoule.

Estimates of the amount of fuel used must be worked out in accordance with the monitoring requirements.

Subsection 68(2) provides that if fuel is used by either the project biomethane facility or equipment used to transport biomethane from that facility, and that fuel is used for a function that was also performed before the implementation of the project, the fuel use attributable to QF, displacement, f, i is only to the extent the project has caused an increase in fuel use. For emissions associated with transport of biomethane, this means that fuel consumption emissions associated with transporting the biomethane in a pipeline that existed prior to the project – for example, gas compression equipment – does not need to be accounted for.

However, if equipment is built to process and transport biomethane produced as the result of the project, fuel consumed by that equipment must be included in working out
QF, displacement, f, i. If road transport of biomethane is employed, fuel consumed by trucks or other vehicles would need to be accounted for in this section unless the project proponent can demonstrate that these transport functions were already occurring in the absence of the project.

Section 69 – Emissions from purchased electricity use—displacement abatement

Subsection 69(1) sets out in equation 31 the calculation for estimating the emissions from purchased electricity that is used by a project biomethane facility. Equation 31 multiplies the amount of purchased electricity that is specifically attributable to the operation of the project biomethane facility during the reporting period, QPE, displacement, f, with EFPE, displacement, f, the emissions factor for electricity obtained from the electricity grid.

The electricity grid from which electricity is sourced may or may not be an electricity grid that is a grid in relation to the NGA Factors document. Paragraph 69(1)(a) states that whenever possible, the project proponent must apply the relevant emissions factor from the NGA Factors document that is in force at the end of the reporting period in accordance with section 8.

Paragraph 69(1)(b) provides for a situation when the electricity used to undertake the project activity is not sourced from a grid in relation to which the NGA Factors document applies. In this circumstance the project proponent must apply a factor that reflects the emissions intensity of the electricity (subparagraph 69(1)(b)(i)). For example, this could be a factor provided by the supplier of the electricity. Subparagraph 69(1)(b)(ii) provides that if this factor is not known, then the factor for off-grid electricity that is provided in the NGA Factors document must be used.

Subsection 69(2) specifies how the emissions factor must be calculated if subparagraph 69(1)(b)(i) applies. In these circumstances, the emissions factor must be worked out using the amount of electricity sent out and be worked out using a measurement or estimation approach that is consistent with the NGER (Measurement) Determination.

Part 6—Monitoring, record-keeping and reporting requirements

Division 1—Offsets report requirements

Section 70 - Operation of this Division

Section 70 states that, for the purposes of paragraph 106(3)(a) of the Act, Division 1 of Part 6 specifies the information that must be included in an offsets report about an eligible offsets project for a reporting period.

Paragraph 106(3)(a) of the Act provides that a methodology determination may provide specified requirements to include specified information relating to a project in each offsets report about the project.

Section 71 - Required information for offsets reports—general information

Section 71 lists the information that must be provided by a project proponent to the Regulator in an offsets report for a reporting period. In particular, an offsets report must include the following:

• a copy of any State or Territory licence in relation to the project landfill in force at the end of the reporting period (paragraph 71(a)),
• a list of project activities carried out during the reporting period (paragraph 71(b)),
• a description of all sources of project emissions in respect of the project (paragraph 71(c)),
• evidence that biogas sent to biogas upgrading systems is used to produce biomethane that can reasonably be expected to be combusted within Australia as a natural gas substitute (if landfill gas capture for biomethane is being carried out) (paragraph 71(d)), and
• various information if biomethane production has been carried out as part of the project (paragraph 71(e)).

A note to section 71 clarifies that suitable evidence for the purposes of paragraph 71(d) may include invoices or other records of commercial transactions involving biomethane being bought or sold for combustion as a natural gas substitute.

Section 72 – Required information for offsets reports—net abatement calculations

Section 72 sets out the information that must be included in an offsets report in relation to net abatement calculations for a reporting period. A non-exhaustive list of the information that must be provided to the Regulator (if applicable) with each offsets report is specified in this section.

Paragraph 72(a) requires an offsets report to include the output of each equation used to calculate net abatement for a reporting period.

Paragraph 72(b) requires an offsets report to include, if the project involves landfill gas capture for biomethane, details about the biomethane production loss factor. This includes how the biomethane production loss factor was worked out in accordance with section 46.

Paragraph 72(c) requires an offsets report to include, if biomethane production is carried out as part of the project, details of the displacement abatement calculations (i.e. calculations made under Part 5).

Details of the displacement abatement calculations required under paragraph 72(c) include volumes and methane concentrations of biomethane produced (subparagraph 72(c)(i)), details of the volumes and eligible abatement fractions of biogas treated by each project biomethane facility (subparagraph 72(c)(ii)), and the sources and volumes of project emissions from treatment of biogas by biogas upgrading (subparagraph 72(c)(iii)).

Additionally, subparagraph 72(c)(iv) requires that, if the volume of eligible biogas is worked out in accordance with subsection 65(2) for a reporting period (i.e. if eligible biogas is estimated and not measured), the offsets report must include an explanation of how the proportion of eligible biogas was worked out (sub-subparagraph 72(c)(iv)(A)), evidence or data supporting how eligible biogas was worked out (sub-subparagraph 72(c)(iv)(B)), and a signed declaration from the person that estimated the eligible biogas that the factor is accurate and conservative (sub-subparagraph 72(c)(iv)(C)).

Section 73 – Required information for offsets reports—details of certain project changes

Subsection 73(1) requires that an offsets report include details of changes that have been made to the project since the section 22 application, section 128 application, or last offsets report provided to the Regulator.

Changes made to a project that should be detailed in an offsets report under subsection 73(1) include:

• a project biomethane facility being added to the project (paragraph 73(1)(a)),
• a biogas upgrading system being added to the project or changed (paragraph 73(1)(b)),
• whether, at the start of the reporting period the project was classified as a different project type or sub-type and details of how the project meets all the requirements of that type or sub-type (paragraph 73(1)(c)), and
• any other changes to the project that result in the information given provided in the section 22 application, or section 128 application or previous offsets report needing to be updated (paragraph 73(1)(d)).

Note, that if a project only meets the requirements of a different project type or sub-type partway through a reporting period, the project proponent for the project cannot have the project classified as a different project type or sub-type during that reporting period. This is because classification of a project as a particular project type or project sub-type may only occur in accordance with section 16, which does not permit classification to occur during a reporting period. However, in these cases, the project proponent for the project may advise the Regulator of their intent to classify the project as a different project type or sub-type, from the start of the next reporting period for which the project meets all requirements.

Subsection 73(2) states that, if paragraph 73(1)(a) applies, an offsets report must also include:

• the intended recipients of the biomethane produced (subparagraph 73(2)(a)), and
• a declaration by the project proponent that the biomethane produced can reasonably be expected to be combusted within Australia as a natural gas substitute (subparagraph 73(2)(b)).

Subsection 73(3) states that, for the purposes of paragraph 73(1)(c), the ‘relevant requirements’ include requirements that would need to be met for that project type or sub-type in a section 22 or section 128 application. Additionally, subsection 73(3) sets out how references to information and references to time periods are to be dealt with in relation to an offsets report.

This means that a project which changes project type or sub-type at the start of a reporting period (and partway through the project’s overall crediting period) can only do so where the project proponent is able to satisfy the same requirements for that project type or sub-type under a section 22 or section 128 application.

Section 74 – Required information for offsets reports—determination of certain factors and parameters

Section 74 sets out requirements when determining certain factors and parameters in accordance with other parts of the determination.

Subsection 74(1) provides that, if subsection 10(3) applies to a project proponent, the offsets report must include certain information about the factor or parameter. This information is as follows:

• the reasons why the proponent did not ascertain the factor or parameter by reference to the version in force at the end of the reporting period (paragraph 74(1)(a));
• if the proponent ascertained the factor or parameter by reference to an earlier version, the date it came into effect and the start and end dates of each use of that version (paragraph 74(1)(b));
• if the proponent made an estimate of the factor or parameter in accordance with paragraph 10(3)(b), details of any matters listed in paragraph 10(3)(b) to which the proponent had reference (paragraph 74(1)(c)).

Subsection 74(2) provides that, if a parameter is worked out in accordance with section 79 for the purpose of working out the carbon dioxide equivalent net abatement amount for landfill gas capture and destruction project for a reporting period, the offsets report must include:

• the name of the parameter (paragraph 74(2)(a)),
• the start and end dates of the non-monitored period (paragraph 74(2)(b)),
• the value of the parameter and how it was calculated (paragraph 74(2)(c)), and
• the reasons why the project proponent failed to monitor the parameter as required by the monitoring requirements (paragraph 74(2)(d)).

Section 75 – Required information for offsets reports—monitored parameters

Section 75 states that an offsets report for a reporting period for a flaring only project must include details of how the requirement specified in relation to flaring only projects in Item 7 of the table in subsection 78(1) has been met.

A note to section 75 states that the requirement relates to cross-referencing the continuous measurement device used to measure the parameter mentioned in that table item.

Section 76 - Requirement for projects to calculate regulatory proportion for reporting period

Section 76 sets out the requirements for projects to calculate the regulatory proportion for a reporting period.

Subsection 76 requires the project proponent, for an eligible offsets project to:

• calculate the regulatory proportion of methane combusted or taken to be combusted, that would have been combusted without the project (WB, Reg), in accordance with section 49, 50 or 51 (paragraph 76(a)), and
• submit an offsets report that specifies the (WB, Reg) for that reporting period (paragraph 76(b).

Division 2—Monitoring requirements

Section 77 - Operation of this Division

Section 77 states that, for the purposes of paragraph 106(3)(d) of the Act, Division 2 of Part 6 specifies the requirements to monitor a landfill gas capture and destruction project that is an eligible offsets project (paragraph 78(a)), and certain consequences if the project proponent for such a project fails to monitor the project as required (paragraph 79(b)).

Paragraph 106(3)(d) of the Act states that a methodology determination may provide specified requirements to monitor a project.

Section 78 - Requirements to measure certain parameters

Section 78 sets out various requirements to monitor certain parameters.

Subsection 78(1) requires a project proponent, for a landfill gas capture and destruction project to monitor and determine a parameter set out in an item of the table, in accordance with the instructions in the item.

The first 3 columns in the table are the parameter name, parameter description and unit (consistent with how the parameter, description and unit is presented for the calculation of net abatement in Part 4 and Part 5 of the determination).

The fourth column of the table is the measurement procedure (which is usually a reference to a Division in the NGER (Measurement) Determination) and the frequency of monitoring if relevant. If the requirement is continuous then spot measurements do not meet this requirement (for instance, the volume of biomethane sent out by a biogas upgrading system is worked out on a continuous basis and so cannot be based on weekly samples and analysis).

The fifth column sets how the monitored parameter is to be derived from the measurements. For the case of the proportion of the volume of landfill gas that is methane, then the measurements are paired with measurements made of the flow of landfill gas for the same interval for the purpose of equation 11. The maximum time interval for pairing these measurements is one hour.

The determination sets out that, for some parameters, measurement procedures must be undertaken in accordance with the relevant NGER (Measurement) Determination specifications. 

• the energy content of the landfill gas sent to combustion device h (QEn, h)
• the landfill gas sent to combustion device or biogas upgrading system h (QLFG, h)
• the electricity (supplied to the grid or used on‑site) generated by internal combustion engine h (QEG, h)
• the fraction of the volume of landfill gas that is methane (WLFG, CH4)
  • The frequency of measurement of this parameter is continuous.
  • For a flaring only project, the continuous measurement device must be cross referenced once per month with a field calibrated handheld gas analyser - paired every calendar month with the volume of landfill gas sent to combustion device or biogas upgrading system h measured at the same conditions as QLFG, h;
  • This requirement is because the measurement devices can ‘drift’ out of calibration over time (in the case where gas is not cleaned before combustion). This would mean that the measurement device would not accurately measure the fraction of landfill gas that is methane.
  • To solve this issue, the measurement device that continuously measures the fraction of landfill gas that is methane needs to be calibrated. 
• The volume of biomethane sent out by biogas upgrading system k (QBM, k)
• Volume of biogas sent to a project biomethane facility from biogas source facility g (QBG, g)
• Volume of eligible biogas sent to a project biomethane facility from biogas source facility g (QBG, El, g)

Measurement procedures may be undertaken with the relevant NGER (Measurement) Determination specifications, or by other means for the following parameters.

• Amount of fuel type a used for landfill gas capture for biomethane activities (QF, LFG-BM, i)
  • This parameter may be evidenced by invoices, contractual arrangements or industry metering records.
• Quantity of each fuel type i used by project biomethane facility f (QF, displacement, f, i)
  • This parameter may be evidenced by invoices, contractual arrangements, or industry metering records.

Measurement procedures that reference other requirements include the following:

• Operation of combustion device h during hour a (Oh, a)
  • The device must be operated in accordance with the manufacturer’s specifications.
  • The measuring equipment must also be used in accordance with appropriate measuring requirements.
• Proportion of the volume of biomethane from biogas upgrading system k, that is methane WBM, CH4, k.
  • This parameter must be measured by an in-line gas analyser which measures the gas composition after the biogas upgrading is complete,
  • The gas analyser must be accurate to +/- 3% and
  • Operated in accordance with the instrument manufacturer’s instructions and the relevant Australian and New Zealand standards.
• Quantity of electricity purchased by project biomethane facility f (QPE,displacement, f)
  • This parameter may be evidenced by invoices, contractual arrangements or industry metering records.
• Amount of purchased electricity used of landfill gas capture for biomethane activities QED, LFG-BM.
  • This parameter may be evidenced by invoices, contractual arrangements or industry metering records.

Subsection 78(2) requires that, unless otherwise specified in the table in subsection 77(1), any equipment or device used to monitor a parameter to be calibrated by an accredited third-party technician at intervals, and using methods, that are in accordance with the manufacturer's specifications.

Subsection 78(3) states that in section 78:

• appropriate measuring requirements, in relation to a measurement or estimate, means the requirements that are consistent with
  • requirements that apply in relation to similar measurements or estimates under the NGER (Measurement) Determination (a), or
  • relevant standards and other requirements under the National Measurement Act 1960 (b); and
• i means a fuel type.

Section 79 - Consequences of not meeting requirement to monitor certain parameters

Section 79 establishes the consequences for a project proponent for a landfill gas capture and destruction project in circumstances where they fail to monitor a particular parameter, as required by the monitoring requirements.

Subsection 79(1) provides that if, during a particular period (known as the non-monitored period in a reporting period) a landfill gas capture and destruction project, a project proponent for the project fails to monitor a parameter mentioned in the table, then the value of the parameter for the purpose of working out the net abatement amount for the reporting period is to be worked out (for the non-monitored period) in accordance with the table in the subsection.

Compliance with the monitoring requirements of parameters is important to ensure that abatement credited by the project is calculated correctly. The monitoring requirements (set out in subsection 79(1) of the determination) include the process for monitoring and the standard to which monitoring must occur.

In some circumstances where a project proponent may be unable to monitor a parameter to the requirements specified, section 37 requires that adjustments be applied for the time intervals that the parameters are not being monitored in accordance with requirements (termed the non-monitored period). This adjustment is necessary to ensure that all estimates or assumptions used in the determination are conservative and are in accordance with the OIS outlined in section 133 of the Act.

For parameters listed in Item 1 of the table in subsection 79(1), the consequence for not monitoring in accordance with the requirements is for the proponent to work out the parameter using the weighted average of the 3 months preceding the non-monitored period (a), or 0.30 - the conservative default emissions factor for that parameter (b).

For parameters listed in Item 2 of the table in subsection 79(1), the consequence for not monitoring these parameters in accordance with the monitoring requirements is for the proponent to make a conservative estimate of the parameter for the duration of the non-monitored period with regard to any relevant measurement or estimation approaches or requirements that apply to the parameter under the NGER (Measurement) Determination (a), any relevant historical data (b), any other data for the project that relates to the parameter (c), or any other matter the project proponent considers relevant (d).

Subsection 79(2) states that, to avoid doubt, section 79 does not prevent the Regulator from taking action under the Act, regulations, or legislative rules, in relation to a project proponent failing to monitor a parameter as required by the monitoring requirements. The information or lack of information provided by a project proponent may be used by the Regulator to determine the nature and frequency of the failure to meet the monitoring requirements and determine what compliance action may be appropriate and proportionate in each individual circumstance.

A note under subsection 79(2) provides three examples of compliance actions that the Regulator may choose to take in response to a project failing to meet monitoring requirements depending on the circumstances.

Schedule 1—Determining regulatory proportion

Part 1—Operation of this Schedule

Clause 1 – Operation of this Schedule

Clause 1 sets out the operation of Schedule 1.

Subclause 1(1) states, for the purposes of sections 49, 50, and 51 of the determination, the regulatory proportion of the methane combusted, or taken to be combusted for a reporting period for an eligible offsets project that would have been combusted during a reporting period without the project (WB, Reg) is worked out in accordance with any of Parts 2 to 4 of Schedule 1.

Subclause 1(2) states that, for the avoidance of doubt, Schedule 1 does not require the environmental regulator in a State or Territory to do anything.

Part 2—Regulatory proportion determined on basis of State or Territory licence conditions

Clause 2 – References to State or Territory licence

Clause 2 states that references to State or Territory licences in Part 2 is a reference to the State or Territory licence in relation to the project landfill for the project, as in force at the end of the reporting period for which WB, Reg is worked out.

Clause 3 – Operation of this Part

Clause 3 sets out the operation of Part 2.

Subclause 3(1) states that Part 2 sets out the methods for working out WB, Reg on the basis of certain conditions (relevant conditions) included in the State or Territory licence.

Subclause 3(2) states that if the State or Territory licence includes only one relevant condition, WB, Reg is worked out by using the method that relates to that condition.

Subclause 3(3) states that if the State or Territory licence includes more than one relevant condition, WB, Reg is worked out by:

• using the method that relates to each of those conditions to work out a value for WB, Reg; and
• selecting the highest of those values.

Subclause 3(4) states that, if the operation of subclauses 3(2) or (3) results in WB, Reg being lower than WB, Def then WB, Reg is taken to be WB, Def.

Subclause 3(5) states that WB, Reg is taken to be WB, Def if the state or Territory licence does not include any relevant conditions.

Clause 4 – Reporting periods for which regulatory proportion must be worked out

Subclause 4(1) states that, if Part 2 applies, WB, Reg must be worked out in accordance with clause 3 for the following reporting periods:

• the first reporting period for the project under the determination,
• each reporting period in respect of which a change to a relevant condition included in the State or Territory licence would result in a different value, and
• each reporting period that starts 5 years after the start of the previous reporting period for which WB, Reg was worked out in accordance with clause 3.

Subclause 4(2) states that if WB, Reg is not required to be worked out for a reporting period under subclause 4(1), it is taken to have the same values for that reporting period as it had in the immediately previous reporting period.  

Clause 5 – Licence condition relating to methane concentration limit or methane flux rate

Clause 5 sets out how the regulatory proportion is worked out when a licence condition relates to methane concentration limit or methane flux rate.

Clause 5 establishes equation 32 as the formula that WB, Reg may be worked by when a State or Territory licence includes a relevant condition specifying the methane concentration limit or methane flux rate in relation to the project landfill.

Clause 6 – Licence condition relating to methane concentration limit or methane flux rate—annual amount of methane permitted to be emitted

Clause 6 establishes equation 33 as the formula that determines the annual amount of methane that is permitted to be emitted from a project landfill in tonnes CO2-e.

Clause 7 – Licence condition relating to methane concentration limit or methane flux rate—annual amount of methane permitted to be emitted from final and intermediate cover

Clause 7 sets out how the amount of methane permitted to be emitted from final and intermediate cover is worked out.

Subclause 1(1) establishes equation 34 as the formula that determines the annual amount methane permitted to be emitted from final and intermediate cover from a project landfill in tonnes CO2-e.

Equation 34 involves the Global Warming Potential value for methane which is set out in Regulation 2.02 of the National Greenhouse and Energy Reporting Regulations 2008 and the oxidation factor set out in the NGER (Measurement) Determination.

Subclause 7(2) states how the permitted methane flux rate for the project landfill for final cover or intermediate cover is worked out for the purposes of subclause 7(1). Subject to the relevant condition, the methane flux rate is worked out in one of two ways. These alternatives are set out in the table of subclause 7(2) which table sets out the method of calculation based on the relevant condition.

Subclause 7(3) sets out the permitted methane flux rates for the purposes of Item 1 in the table in subclause 7(2). The permitted methane flux rate is set out in column 2 the table in subclause 7(3) and linked to the corresponding methane concentration limit in column 1. Essentially the table translates the methane concentration limits specified for the various States and Territories.

The flux rates can be specified by environmental regulators differently for the final cover and intermediate cover of a landfill, because intermediate cover is likely to be more permeable and temporary than the final cover. These methane concentration limits and the corresponding flux rate may be updated in a future method variation.

In accordance with section 8 of the determination, any external document referred to (including in the schedules) is taken to be the latest version of that document as updated from time to time.

Clause 8 – Licence condition relating to methane concentration limit or methane flux rate—annual amount of methane permitted to be emitted from daily/operational cover

Clause 8 states that the annual amount of methane that is permitted to be emitted from the daily/operational cover of the project landfill is equivalent to parameter MGen, y in tonnes CO2-e, and worked out by using section 40 where the calculation is based only on the waste sited vertically below the daily/operational cover.

The NGER (Measurement) Determination is used to calculate this amount of methane generated, in accordance with subsection 40 and based on the waste sited vertically below the daily/operational cover area.

Clause 9 – Licence condition relating to landfill gas collection or release

Clause 9 establishes three different ways in which WB,Reg can be worked out based on the licence condition in relation to landfill gas collection or release. The table sets out the various methods of determining WB,Reg and the corresponding licencing conditions.

Different calculation methods are required based on the licence conditions because licence conditions may express mandatory requirements differently.

Part 3—Regulatory proportion determined by asking State or Territory environmental regulator

Clause 10 – Regulatory proportion determined by asking State or Territory environmental regulator

Clause 10 sets out the process for determining the regulatory proportion by asking a State or Territory environmental regulator.

Subclause 10(1) states that WB,Reg may be worked out by asking the relevant State or Territory environmental regulator to provide, in writing, the gas collection rate that corelates to the methane concentration limits for the project landfill at the end of the relevant reporting period.

This enables the project proponent to ask their State or Territory environmental regulator to determine the gas collection rate required to meet the applicable methane concentration limits applying to the landfill. It is an important requirement for a proponent using this Part that the environmental regulator gives the gas collection rate to the proponent in writing to ensure appropriate record management and verification if the Regulator requests more information.

Subclause 10(2) provides a table which can be used to convert the term used by the relevant environmental regulator to express the quantitative regulatory requirement, to be converted to WB,Reg in accordance with the instructions in the item in the table. The columns in the table are item, term used by State or Territory environmental regulator, and conversion to WB,Reg.

This accommodates for circumstances when the environmental regulator expresses the gas collection rate in different quantitative ways. This is a key reason why the determination does not require the regulator to express it in terms of collection efficiency.

Subclause 7(3) includes a table which sets out the allowable flux rates for the purpose of Item 1 of the table in subclause 10(2).

Part 4—Regulatory proportion determined by independent expert

Clause 11 – Regulatory proportion determined by independent expert

Clause 11 provides for the regulatory proportion to be worked out by an independent expert.

Subclause 11(1) states that WB,Reg may be worked out by a person engaged, for that purpose, by the project proponent to determine the parameter.

Subclause 11(2) states that the person engaged under subclause 11(1) must:

• have no conflict of interest (paragraph 11(2)(a)),
• possess a relevant university degree (paragraph 11(2)(b)),
• have more than three years’ experience in landfill management (subparagraph 11(2)(c)(i)) and the design and operation of landfill gas collection systems (subparagraph 11(2)(c)(ii)), and
• have extensive knowledge of the regulatory framework relevant to landfill gas management in the relevant jurisdiction (paragraph 11(2)(d)).

Subclause 11(3) requires the person engaged under subclause 11(1) to use the methane concentration limits applicable to the project landfill at the end of the reporting period for which WB,Reg is being worked out.

Subclause 11(4) requires the person engaged under subclause 11(1) to provide the project proponent evidence in writing that verifies:

• compliance with subclause 11(2) (paragraph 11(4)(a)), and
• calculations, assumptions, information, inputs and references used (paragraph 11(4)(b)).
  

Schedule 2—Revocations

Carbon Credits (Carbon Farming Initiative-Electricity Generation from Landfill Gas) Methodology Determination 2021

Clause 1 – The whole of the instrument

Clause 1 revokes the Carbon Credits (Carbon Farming Initiative—Electricity Generation from Landfill Gas) Methodology Determination 2021 in accordance with subsection 123(1) of the Act.

As the determination supports activities and projects previously supported by the 2021 determination, the 2021 determination is no longer needed and therefore revoked.

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—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025

This Disallowable 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

Subsection 106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) empowers the Minister to make, by legislative instrument, a methodology determination. Subsection 123(1) of the Act empowers the Minister to revoke, by legislative instrument, a methodology determination.

The Carbon Credits (Carbon Farming Initiative—Reducing Methane Emissions from Landfill Gas) Methodology Determination 2025 (the determination) sets out the criteria for establishing a landfill gas project, as well as the requirements for monitoring, calculating, reporting, and crediting the greenhouse gasses abated as a result of a landfill gas project for the purpose of generating Australian carbon credit units (ACCUs).

Landfill gas projects achieve emissions reductions by capturing and destroying methane that is generated by decomposing waste at a landfill. Methane is a greenhouse gas that is 28 times more potent than carbon dioxide over a period of 100 years. Accordingly, capturing and combusting methane emissions converts it into carbon dioxide, reducing the net emissions from landfills. Additionally, projects that capture methane from landfills and upgrade it to biomethane for injection into the gas grid further reduce emissions by displacing the need for fossil gas.

The determination replaces two existing methodology determinations in relation to landfill gas – the Carbon Credits (Carbon Farming Initiative – Landfill Gas) Methodology Determination 2015 (the 2015 determination), and the Carbon Credits (Carbon Farming Initiative – Electricity Generation from Landfill Gas) Methodology Determination 2021 (the 2021 determination). A primary reason for replacing these determinations was to implement recommendation 10 of an independent review into the ACCU Scheme from December 2022, led by former Chief Scientist Professor Ian Chubb (the ACCU Review). In January 2023, the Australian Government accepted, in principle, all recommendations of the ACCU Review with the objective to bolster the integrity of the ACCU Scheme.

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

[1] Independent Review of Australian Carbon Credit Units accessible at https://www.dcceew.gov.au/climate-change/emissions-reduction/independent-review-accus.

[2] More information is available at the above website link.

[3] This can be found at this link https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-factors-2023.

[4] More information available at https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-reporting-scheme/safeguard-mechanism.