Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026

Explanatory Statement

Issued by the authority of the Assistant Minister for Climate Change and Energy

Carbon Credits (Carbon Farming Initiative) Act 2011

Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026

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 empowers the Minister to revoke, by legislative instrument, a methodology determination.

For the purposes of subsections 106(4) and (4AA) of the Act, in making the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026 (the determination), the Minister:

• was satisfied that the determination complies with the offsets integrity standards (OIS);
• had regard to and agreed with the advice of the Emissions Reduction Assurance Committee (ERAC) given to the Minister under subsection 123A(2) of the Act;

• had regard to any adverse environmental, economic or social impacts likely to arise from the carrying out of the kind of projects to which the determination applies.

For the purposes of 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 following advice from the ERAC.

In accordance with subsection 106(11) of the Act, the Minister published a copy of the advice from the Emissions Reduction Assurance Committee (the ERAC) on the website of the Department of Climate Change, Energy, the Environment and Water (the department).

Purpose

The determination enables projects that store carbon in living and dead biomass and avoid emissions through fire management to generate Australian Carbon Credit Units (credits). Strategic savanna fire management reduces greenhouse gas emissions by shifting the timing, frequency, and intensity of fires in Australia’s tropical savanna ecosystems from the late dry season to the early dry season.

The determination builds on the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018 and aims to address the following:

• Scientific advancements—incorporating new research and data on fire dynamics, carbon stocks, and emissions factors to refine method accuracy.
• Consistency and integrity—ensuring alignment with the evolving requirements of the ACCU Scheme and international best practice.
• Improvements to enhance participation and environmental benefits —ensuring the method supports First Nations participation by enabling capacity fire building, and enhances environmental benefits through strengthened weed and air quality management requirements.

The determination:

• explains how to calculate and verify the emissions reductions from eligible project activities to earn credits; and
• sets the framework for which projects can be credited for storing carbon or avoiding emissions and outlines the related notification and monitoring requirements.

Background

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 sequestering carbon. Carbon sequestration 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.

Before making a methodology determination, the Minister must have regard to the advice of the ERAC, an independent expert panel established to advise the Minister on the 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 OIS (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 any adverse environmental, economic or social impacts likely to arise as a result of projects to which a methodology determination applies.

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.

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

Accounting for abatement from fire management activities

In the determination, net abatement is calculated as the emissions avoided by conducting early season fires that mitigate later, more emissions-intensive fires, and the corresponding additional carbon sequestered. Emissions from fires and sequestration of carbon during the project are compared to the baseline scenario. Calculations can be performed using the Savanna Carbon Abatement Model (SavCAM) or by following the equations in the determination.

Emissions Avoidance

• Abatement is calculated as the difference between baseline fire emissions and fire emissions in the project year.
• Abatement is adjusted using an uncertainty buffer, which accounts for inter-annual variability of fires and risk of over-crediting.
• The buffer is capped at 5% of average annual baseline emissions.
• If there is a year with negative abatement (e.g. more emissions released than avoided), credits are only issued again after the loss has been covered using buffer credits, and if needed, from positive abatement in future years.

Sequestration

• Abatement is calculated as the change in carbon stock in living and dead biomass compared to the average carbon stock during the baseline period.
• For the first year, it is the difference between current carbon stock and the baseline average.
• For subsequent years, it is the difference between the current and previous year’s stock.
• To manage the risk of reversal:
  • Abatement is adjusted so that crediting occurs sequentially, with more credits released as confidence in the permanence of sequestration increases. This sequestration bank concept changes the timing of crediting, but not overall crediting amounts.
  • Abatement is also adjusted using a sequestration buffer (25% for 25-year permanence, 5% for 100-year permanence) to account for the risk of reversal. This acts as an overall discount of the amount of credits issued.
• As with the avoidance component, negative abatement is carried forward and deducted from future positive abatement using a carryover mechanism.

Both components are calculated separately for each project area and rainfall zone. Negative values in one area cannot offset positive values in another. Extensive science sits behind the parameters used.

Consultation

An exposure draft of the determination was first published on the Department website on 14 August 2025. The ERAC’s formal public consultation period opened on 7 October 2025 and closed on 3 November 2025. The Department, on behalf of the ERAC, consulted with stakeholders through information sessions held on 3 September 2025, 2 October 2025, 21 October 2025 and 23 October 2025. 29 written submissions were received and considered in further developing the determination. Public submissions can be found on the department’s website.

The ERAC was also consulted and considered the determination at its meeting on 19 February 2026 and found that the determination meets the OIS.

Details and Operation

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 set out in 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.

Incorporation by Reference

Paragraph 106(8)(b) of the Act provides that a methodology determination may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, a matter contained in an instrument or writing as in force or existing from time to time.

The Technical Guidance Document for the 2026 Savanna Fire Management Methods (the Technical Guidance Document) is incorporated by reference in the determination as it is in force from time to time. As of 27 March 2026, the Technical Guidance Document can be freely accessed via the department’s website.

The SavCAM is also incorporated by reference in the determination as it is in force from time to time. As of 27 March 2026, the SavCAM can be freely accessed via the department’s website.

The Relevant Weeds Risk spatial data layer is incorporated by reference in the determination as it is in force from time to time. As of 27 March 2026, the Relevant Weeds Risk spatial data layer can be freely accessed via the department’s website.

The Savanna Fire Management High Rainfall Zone spatial data layer and the Savanna Fire Management Low Rainfall Zone spatial data layer are incorporated by reference in the determination. The applicable version is the version published on the department’s website at the time of the end of the project’s reporting period. As of 27 March 2026, they can be freely accessed via the Department’s website. The Savanna Fire Management LDS Start Date and the Savanna Fire Management LDS End Date spatial data layers are incorporated by reference in the determination. The applicable version is the version published on the department’s website at the time of the end of the project’s reporting period. As of 27 March 2026, they can be freely accessed via the Department’s website.

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.

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.

ATTACHMENT A

Details of the Legislative Instrument

Section 1 – Name

Section 1 sets out the full name of the determination as the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026.

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 provides that the determination is made under subsection 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 determination.

Subsection 123(1) of the Act provides that the Minister may, by legislative instrument, revoke a methodology determination (see Schedule 3 of the determination).

Section 4 – Schedules

Section 4 provides that each instrument that is specified in the Schedule to the determination is amended or revoked as set out in the items in that Schedule, and any other item in the Schedule to the determination has effect according to its terms.

Section 4 makes it clear that t the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018 (2018 determination) is revoked by Schedule 3 of the determination.

Section 5 – Duration

Section 5 provides 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 from the commencement date (the day after registration on the Federal Register of Legislation as per section 2) and the day before it would otherwise be repealed in accordance with subsection 50(1) of the Legislation Act 2003.

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.

The definitions of ‘high rainfall zone’ and ‘low rainfall zone’ refer to the Savanna Fire Management High Rainfall Zone spatial data layer and Low Rainfall Zone spatial data layer documents published on the Department’s website, as in effect at the end of the reporting period. The original spatial layers were developed with reference to the amount of rainfall within areas, and the seasonality of that rainfall. The department may update the spatial data layers over time if climatic conditions change.

The definition of SavCAM makes it clear that references to SavCAM are references to the latest version of SavCAM, unless the technical guidance document states otherwise. If during a reporting period, a particular version of SavCAM was the latest version, but that version is not available at a later time when CER is administering the section, the definition of SavCAM also makes it clear that the CER may use the latest version of SavCAM.

Section 7 - Meaning of fire season, early dry season and late dry season

Subsection 7(1) provides that the fire seasons for the determination are the early dry season (EDS) and the late dry season (LDS).

A note to subsection 7(1) states that while there is also a wet season each year in northern Australia, it is not relevant for the purposes of the determination. This is because fire activity is generally negligible during the wet season. The definitions of the early and late dry seasons may overlap with the wet season, but only the dry seasons are considered fire seasons under the determination.

Subsection 7(2) defines the terms early dry season and late dry season for a particular area of land and calendar year.

• The early dry season means the period of the calendar year that is not the late dry season for that area.
• The late dry season means the period that begins on the date specified for that area in the Savanna Fire Management LDS Start Date spatial data layer (paragraph (a)) and ends on the date specified in the Savanna Fire Management LDS End Date spatial data layer (paragraph (b)). These spatial data layers may specify uniform dates across all areas or different dates for different regions.

At the time the determination was made, the spatial data layers indicated that the late dry season begins on 1 August and ends on 31 December for all areas in both the high rainfall and low rainfall zones. It is anticipated that in future versions of the spatial data layers, the start and end dates of the late dry season may vary between regions if new science becomes available. Additionally, the end date of the late dry season for a particular area may fall in the following calendar year, meaning the late dry season could span across two calendar years.

Subsection 7(2) also defines the applicable version of the Savanna Fire Management LDS Start Date and End Date spatial data layers. The applicable version for a particular calendar year is the version published on the department’s website and in force on 30 June in the previous calendar year. This incorporation is consistent with paragraph 106(8)(b) of the Act and subsection 14(2) of the Legislation Act 2003. As of 27 March 2026, they can be freely accessed via the department’s website.

Any updates to the timing of the late dry season will be automatically reflected in SavCAM for the relevant calendar years.

Section 8 – Meaning of baseline period

Subsection 8(1) sets out the general rule for determining the baseline period for an area of land under the determination. The baseline period is defined as the 20 calendar years immediately preceding:

• the calendar year in which the crediting period begins, for areas of land that were part of the project area identified in the section 27 declaration when the project was first declared an eligible offsets project (paragraph 8(1)(a)); or
• the calendar year in which a variation to the section 27 declaration took effect, for areas of land that were added to the project area at a later date (paragraph 8(1)(b)).

This ensures that the baseline period reflects the most recent 20-year period prior to the commencement of crediting for each area of land.

Subsection 8(2) provides that, for an area of land in a subdivided project area, the baseline period is the same as that of the original project area. This ensures continuity and consistency in baseline calculations following subdivision.

Subsection 8(3) provides that for an area of land in a transferring project area, the baseline period is preserved from the former determination. This maintains alignment with the historical baseline period already established under the former determination.

Subsection 8(4) applies to areas of land that are not a transferring project area where capacity building fire management was conducted prior to the project’s crediting period.

Capacity building fire management is defined in section 6 as planned and intended early dry season burning that is conducted to enable land managers to develop knowledge, skills and processes relevant to early dry season fire management. It must be a period immediately preceding the start of the project.

If capacity building fire management has been carried out, the baseline period used for carbon calculations depends on how long the fire management lasted

• If it lasted 6 calendar years or less, the baseline period is the 20 calendar years ending in the year the capacity building fire management began.
• If it lasted more than 6 calendar years, the baseline is the 20 calendar years before the end date of the capacity building fire management.

This provision recognises the influence of long-term fire management activities on fire regimes and ensures that the baseline period reflects conditions prior to such interventions.

Section 9 – Meaning of original project area and subdivided project area

This section sets out that an original project area is a project area that has not been subdivided.

However, if a project area is divided into 2 or more smaller project areas, and the areas of land divided when taken together is identical to the original project area land, then each smaller project area is referred to as a ‘subdivided project area’.

The note at the bottom of the section explains that a project proponent must make an application under section 29 of the CFI Act to vary the project area of a declared eligible offsets project. Any variations would also have to occur in accordance with the CFI Rules.

The CFI Rules permit certain types of variations to project areas under this determination. Schedule 1 and Schedule 2 of this determination set out adjustments to the calculation of abatement that apply when a project area is varied.

Section 10 – Updates to external documents as in force from time to time

The determination recognises that abatement estimates within the determination are underpinned by science that is undergoing continuing development and improvement. Accordingly, the determination makes reference to different documents as they are in force or existing from time to time as permitted by paragraph 106(8)(b) of the Act. Section 10 outlines the processes for updating these documents. Updates to these documents might include updates which reflect and incorporate improved science to inform more robust abatement calculations.

Subsection 10(1) provides that an updated document is only taken to be in force if it includes or is published with:

• an accompanying document stating the reason why the document has been updated and an outline of the process undertaken to update the document (paragraph 10(1)(a)); and
• if the Emissions Reduction Assurance Committee provided any advice relating to the update of the document, a copy of that advice (paragraph 10(1)(b)).

Subsection 10(2) states that if a document is republished with updates without meeting the requirements in subsection 10(1), the earlier version of the document remains in force.

Section 11 – Factors and parameters from external sources

Subsection 11(1) provides that if a calculation refers to a parameter that is defined or calculated by reference to an external document, the parameter to be used for the reporting period is the factor or parameter referred to, or calculated by reference to, the external document as in force at the end of the reporting period.

Subsection 11(2) states that subsection 11(1) does not apply if the determination stipulates otherwise, or if it is not possible to define or calculate these parameters by reference to the relevant external documents.

Accordingly, if a calculation in the determination depends on a value or rule from another document, then the relevant version of that document is the one that was in force at the end of the reporting period. This does not apply if:

• the determination specified a different version be used; or
• it is not possible to work out the value or rule from the version of the other document in effect at the end of the reporting period.

Part 2— Savanna sequestration projects

Section 12 – Savanna sequestration projects

Paragraph 27(4)(b) of the Act provides that the Regulator must not declare that an offsets project is an eligible offsets project unless the Regulator is satisfied that it is covered by a methodology determination. Paragraph 106(1)(a) of the Act provides for methodology determinations to specify the kind of offsets projects to which they apply.

Section 12 provides that the determination applies to an offsets project that satisfies each of paragraphs 12(1)(a), (b), (c) and (d).

Savanna fire management must be carried out to meet the first objective set out in subparagraph 12(1)(a)(i) – to remove carbon dioxide from the atmosphere by sequestering more carbon in living biomass or dead organic matter than was sequestered during the baseline period.

Savanna fire management must also be carried out to meet the second objective set out in subparagraph 12(1)(a)(ii) – to ensure there are less emissions of methane and nitrous oxide from the burning of savannas in the project area compared to the emissions that occurred in that area during the baseline period.

Effective savanna fire management leads to a greater proportion of cooler fires and fewer hotter fires. This avoids substantial emissions of methane and nitrous oxide then would otherwise occur.

Paragraph 12(1)(b) specifies that projects must not increase greenhouse gas emissions from other sources or alter the rate of decomposition of organic carbon. For example, projects cannot increase stocking rates of livestock above those that would otherwise occur in the absence of the project, in an attempt to reduce fuel loads and hence modify fire activity. Further, projects cannot undertake activities that would increase the rate of decomposition of organic carbon. For example, projects cannot undertake activities that increase water content of soil or biomass, or increase the activity of termites or other organisms involved in decomposition of organic matter. It is possible, however, that natural disturbances (rather than project activities) may, in a particular calendar year, increase greenhouse gas emissions, or alter the rate of the decomposition of organic carbon. This does not preclude the project from being an eligible offsets project. The determination accounts for these impacts in the calculation of abatement.

Paragraph 12(1)(c) requires projects to be carried out in a savanna that is in either or both the high-rainfall zone, or the low-rainfall zone. These zones are defined by the relevant rainfall zone spatial data layers. Spatial data layers are map‑based datasets that show different types of information (such as information on vegetation, fires) laid out over the same area, so they can be viewed and analysed together.

Paragraph 12(1)(d) requires projects to be reasonably expected to result in eligible carbon abatement. This means there must be a reasonable expectation that the objectives in this paragraph can be met through a change in fire management activity, and this is likely to result in net positive abatement that can contribute to Australia’s international emissions reduction targets.

Subsection 12(2) provides that a project covered by subsection 12(1) is a savanna sequestration project.

Subsection 12(3) provides that the determination does not apply to an offsets project that has been or could be covered by a savanna emissions avoidance determination – which deals with projects that involve undertaking savanna fire management activities with the sole purpose of avoiding emissions.

This is because the process for transitioning between methodology determinations in section 128 and 130 of the Act does not apply for projects wishing to move between emissions avoidance only and sequestration offsets projects as this process would not effectively allocate the project a 25-year or 100-year permanence period. However, subsection 12(3) does not prevent the transfer of savanna emissions avoidance only projects to the determination in accordance with sections 30A and 30B of the CFI Rules.

Part 3—Project requirements

Division 1—General

Section 13 – Operation of this Part

Section 13(1) states that, for the purposes of paragraph 106(1)(b) of the Act, Part 3 of the determination set out the various requirements that must be met for a project to be an eligible offsets project. Paragraph 27(4)(c) of the Act states that the Regulator must not declare that a project is an eligible offsets project unless the Regulator is satisfied that the project meets these requirements.

Subsection 13(2) states that Division 6 of Part 3 specifies the requirements in lieu of the newness requirement and the regulatory additionality requirement for savanna sequestration projects for the purposes of subparagraphs 27(4A)(a)(ii) and (b)(ii) respectively.

Subsection 13(3) states that Division 7 of Part 3 specifies crediting periods for certain project types. These project types are those with transferring project areas.

Division 2—Project area

Section 14 – Requirement to be in high or low rainfall zone

Section 14 requires all areas of land included in the project to be in either the high rainfall zone or the low rainfall zone or in both rainfall zones. This means that projects cannot be undertaken on an area of land that is not in either of the rainfall zones.

Section 15 – Requirement to maintain vegetation fuel types

Subsection 15(1) requires each part of the project area to contain an area of land with a vegetation fuel type at the relevant date.

Paragraph 15(2) requires each part of the project area to continue to include an area that contains a vegetation fuel type after the relevant date.

Subsection 15(3) states that, if at any time after the relevant date there is a change to the project area that would result in a significant portion of land becoming re-classified as ineligible according to the Technical Guidance Document, then that land may be removed from the project. If the proponent chooses to remove the area of land, the relevant area of land must be removed in accordance with the CFI Rules.

A note to subsection 15(3) states that to effect the removal, a section 29 application must be made. In order to remove a part of a project area, the relevant project area of land must be subdivided first and then the subdivided portion that is made of the contiguous area of land classified as ineligible would constitute the whole of a project area which can subsequently be removed from the project.

For the purposes of section 15, subsection 15(4) defines:

• the relevant date as the date of the section 22, section 29 or section 128 application in relation to the project in which the project area is first identified.
• significant portion of land means an area of land that shares a common unbroken border, in a project area that is larger than 5% of the total area of the project area, or larger than 50 hectares.

Section 16 – Requirement to manage relevant weed species

Section 16 establishes the requirements and conditions under which a project area must be managed to control and eradicate relevant weed species.

Subsection 16(1) establishes a requirement for a project area to be free of all relevant weed species at the relevant date. Subsection 16(7) defines the relevant date as the date of the section 22, section 29, or section 128 application in which the project area is first identified.

If after the relevant date, the project proponent becomes aware that the project area includes an area of land containing a relevant weed species (a weed affected area), subsection 16(2) provides that the weed-affected area must be treated appropriately within 18 months of the weed species being identified, and until the weed species is eradicated from that area.

Subsection 16(3) states that an area of land is taken to not have included a weed-affected area before its removal if the weed-affected area was removed from the project in accordance with the CFI Rules.

It is important to note that the removal must occur during the same reporting period as the weed species has been identified, otherwise subsection 16(3) could not be relied upon.

The note after subsection (3) clarifies that removal of a weed-affected area from the project may be done through subdividing the project area so that the area to be removed constitutes the whole of a smaller project area, then making an application to vary the section 27 declaration in accordance with the CFI Rules (as authorised by section 29 of the CFI Act).

Subsection 16(4) provides that a project area is considered clear of relevant weed species at the relevant date if there is evidence that demonstrates all known weed-affected areas were treated appropriately within the 12 months prior. However, if after the relevant date, the weed is still present, subsection 16(2) continues to apply, that is, the weeds must continue to be treated appropriately.

Subsection 16(5) provides that a weed-affected area is taken to have been treated appropriately if:

• the relevant weed species is treated with a herbicide to kill all of its aboveground biomass or subjected to mechanical removal to destroy the entirety of its aboveground biomass; and
• that treatment or removal is carried out in accordance with any relevant Australian laws at least once every 12 months (unless such treatment is not possible due to circumstances beyond the proponent’s reasonable control). For instance, treatment may not be possible in a particular year because of climatic events that make it unsafe or ineffective to carry out the action. The intention of this ‘reasonable control’ requirement is that the test would be the same as that applied under sections 82, 90 and 91 of the Act when determining whether particular conduct is within the reasonable control of the project proponent. This exemption also recognises that the optimal treatment window is shorter than a full year due to the phenology or growth cycles of gamba grass which makes it susceptible to external impacts, and the need for large logistical operations across vast landscapes.

Subsection 16(6) provides that a relevant weed species is taken to be eradicated from a weed-affected area when it has not been detected in that area for the period of time specified in the Technical Guidance Document, or if not specified, 24 months.

Section 17 – Project area not to contain previously removed areas

Section 17 provides that a project area part must not include any land that was:

• previously part of the same project or another project under this methodology determination or a savanna fire management determination; and
• removed in accordance with paragraphs 15(3), or as referred to in section 16(3) or an equivalent provision under a savanna fire management determination.

This is intended to prevent the cycling of ineligible land back into projects, thereby maintaining the integrity of emissions reductions and sequestration outcomes.

Division 3—Project activity

Section 18 – Requirement to undertake savanna fire management

Subsection 18(1) provides that the project proponent must undertake planned burning in each project area every calendar year. Annual planned burning using cooler, small early dry season fires, if done strategically, will reduce the number and size of large, high intensity late dry season fires. Strategic early dry season burns create an age-class mosaic of burnt and unburnt patches across the landscape which creates a discontinuous fuel load that slows or stops the spread of fires across the project area. This will result in a reduction of greenhouse gas emissions. The risk of annual late dry season fires remains high in the absence of strategic annual fire management in the early dry season.

Planned burning in the late dry season is permitted as this may include the use of fire to control unplanned fire activity, such as the burning of containment lines. The aim of these containment lines is to reduce the spread of unplanned fire, reducing the overall area burnt during the late dry season. Fire suppression activities are also permitted and proposed suppression approaches could be included in a project management plan.

Subject to meeting the requirement of subsection 18(2), the determination does not prescribe a particular type or amount of planned burning, enabling project proponents some flexibility as to how they conduct their savanna sequestration projects. The objectives set out in section 12 of the determination are most easily achieved if the fire management results in an increase in fire activity in the early dry season and a decrease in fire activity in the late dry season. In most circumstances, this will result in a reduction in the overall fire frequency in the project area and a reduction in the total area burnt in the project area.

Subsection 18(2) provides that the combination of planned burning each year, in future years, and the pattern of planned and unplanned burning in previous years since the project commenced must be undertaken in such a way that meets the objectives of savanna fire management described in section 12 and could reasonably be expected to ensure that the amount of carbon sequestered in savanna in the project area does not decrease significantly over the permanence obligation period of the project. A decrease is significant if is not likely to happen due to reasonable variations in climate and should be mitigated through permanence obligations being met. These objectives are to reduce emissions of greenhouse gases and increase or maintain stores of carbon in dead organic matter.

Subsection 18(3) acknowledges that proponents may not be able to achieve the annual planned burning for a project area in a particular project year due to circumstances beyond their reasonable control. Provided the proponent can demonstrate the failure to undertake planned burning in a particular year resulted from circumstances beyond their reasonable control, they have not contravened subsection 18(1). Under these circumstances, subparagraph 38(2)(b)(ii) of the determination requires that the proponent must provide the Regulator and an auditor a reasonable set of circumstances justifying why they were unable to undertake planned burning in accordance with the determination. The intention of this ‘reasonable control’ requirement is that the test would be the same as that applied under sections 82, 90 and 91 of the Act when determining whether particular conduct is within the reasonable control of the project proponent.

There are a number of circumstances beyond the proponent’s reasonable control that could prevent them from undertaking planned burning in a year, such as a late finish to the wet season that leaves vegetation too moist for planned burning for most or all of the early dry season, or extensive late dry season fires in the previous fire season. These late dry season fires may have burnt most of the project area or used a significant proportion of the fire management resources for the subsequent fire season. In this example, project proponents may be able to demonstrate suppression efforts to manage these late dry season fires led to planned burning that is consistent with subsection 18(2), and meets the objectives outlined in paragraph 12(1)(a). Another example would be if resources such as helicopters and rangers were unable to complete the planned burning for reasons beyond the proponent’s reasonable control.

Financial difficulty may not be considered as circumstances beyond the proponent’s reasonable control.

Subsection 18(4) provides that if the project area has been subdivided into two or more subdivided project areas in accordance with section 9, then, for the purposes of section 18(4), planned burning that occurred on the original project area before the area was subdivided may be considered to have occurred on the subdivided project area. That is, if in previous years planned burning was undertaken in the original project area in accordance with subsections 18(1), (2), and (3), then it will be assumed that these conditions have been met for each subdivided project area.

A note to section 18 acknowledges that in monitoring whether a project continues to meet the requirements of section 18, the Regulator will consider a range of information, including the project management plan, the information required to be provided in an offsets report under section 38, and the information in any SavCAM reports relating to the project.

Division 4—Project management plan

Section 19 – Requirement to prepare plan

Section 19 sets out the requirement for project proponents to prepare an annual project management plan. This requirement ensures that fire management activities are planned in advance and documented in a way that supports the delivery of abatement outcomes and compliance with the determination.

Subsection 19(1) requires that each calendar year, the project proponent must prepare a project management plan or plans that covers all project areas for each savanna sequestration project.

Subsection 19(2) details what a ‘project management plan’ is. It is a document that describes the planned burning intended in a project area for that year, demonstrates consideration of the likely impact of PM2.5 particulate matter from the planned burning on air quality in the areas where people live nearby, and that if any air quality management requirements are specified in the Technical Guidance Document, these have been met. Subsection 19(2)(c) details that the project management plan must also include a plan to monitor the presence of relevant weed species in the area. That plan must demonstrate the level of risk of relevant weed species occurring in each project area has been considered, must describe how that risk has been determined, must outline a monitoring approach (including the methods and frequency of monitoring), and must be consistent with any weed monitoring requirements specified in the Technical Guidance Document.

Subsection 19(3) requires that the project management plan for a particular project area must be prepared before any planned burning commences in that area for the year. This ensures that fire management is pre-planned and that the project is operating in accordance with the determination’s requirements.

Nothing in subsection 19(1) is intended to preclude a project proponent using another annual plan (such as a fire management plan) that it prepares as the project management plan provided it meets the requirements of the determination.

A single project management plan may relate to one or more project areas, providing flexibility for proponents managing multiple areas under a single project.

Section 20 – Updating or revising project management plan

Section 20 provides flexibility, allowing project proponents to revise or update their project management plans throughout the year, recognising that fire management must often respond to changing environmental conditions and operational constraints, such as weather variability, access limitations, or updated ecological priorities.

Subsection 20(2) states that the part of the project management plan that monitors the presence of weed species as specified in subsection 19(2)(c) must be reviewed and revised by the project proponent at least once every 5 years.

Subsection 20(3) requires that any revision or update must specify the date on which the change was made.

Division 5—Vegetation fuel type map

Section 21 – Requirement to create and validate vegetation fuel type map

Section 21 provides that project proponents must create and validate a vegetation fuel type map for each project area within the savanna sequestration project. This requirement applies regardless of whether the project area was identified in the original section 22 application, a section 128 application, or was subsequently added to the project through a section 29 application.

Paragraph 21(a) requires that the vegetation fuel type map be created and validated in accordance with the Technical Guidance Document. The Technical Guidance Document outlines the procedures for identifying and classifying vegetation fuel types, including the use of remote sensing, GIS tools, and field observations. It also provides guidance on how to determine whether a mapping unit is eligible or ineligible based on vegetation characteristics, presence of weed species, or land clearing.

Paragraph 21(b) requires that the vegetation fuel type map must be created and validated before the project proponent submits the first offsets report relating to the project area under Division 1 of Part 5 of the determination. This ensures the vegetation fuel type map is available to support the reporting of sequestration and emissions avoidance outcomes from the outset of the crediting period. However, it is important to note that section 30 of the determination provides an exemption for a project with a transferring project area that effectively does not require the vegetation map to be revalidated after transfer.

Section 22 – Revising vegetation fuel type map

Section 22 outlines the circumstances under which a vegetation fuel type map must or may be revised, and the requirements for validating the revised map.

Subsection 22(1) provides that the map must be revised if the proponent becomes aware that:

• a mapping unit was incorrectly classified as being eligible when it should have been classified as ineligible (subsection 22(1)(a)); or
• a mapping unit was incorrectly classified as one particular vegetation fuel type when it should have been classified as another vegetation fuel type (subsection 22(1)(d)).

Proponents may become aware of mapping units being incorrectly classified through a range of scenarios including as part of their monitoring activities, audits, or other project assessments. They may also be notified by other parties. The proponent must notify the Regulator in writing about the misclassification of the mapping unit, within 90 days of becoming aware of it, and update the vegetation fuel type map to reflect the correct classification. The proponent may also remove the area in accordance with the CFI Rules.

Subsection 22(2) provides that a project proponent may revise a vegetation fuel type map if they become aware that a mapping unit previously classified as ineligible may now be classified with a vegetation fuel type, in accordance with the Technical Guidance Document. This allows for flexibility where vegetation conditions have changed or where new information becomes available but current measurements are still conservative.

Subsection 22(3) requires that any revised vegetation fuel type map must be validated in accordance with the Technical Guidance Document. A note to this subsection states that the entire vegetation fuel map may need to be revalidated even if the area being revised is only part of the area covered by the map.

Subsection 22(4) sets out the timing requirements for completing revisions and validations as for:

• revisions required under subsection 22(1), the revised and validated map must be completed before submitting the offsets report for the reporting period during which the issue was identified; and
• all other revisions, the revised and validated map must be completed before submitting the offsets report for the first reporting period for which the revised map is used.

This ensures offsets reporting is based on up-to-date, accurate and validated vegetation fuel type data.

Section 23 – Vegetation fuel type map for subdivided project area

Subsection 23(1) provides that this section applies where a vegetation fuel type map has already been created and validated, or revised and validated (where necessary), in accordance with the determination for a particular project area, and that project area is subsequently subdivided into 2 or more subdivided project areas.

There are various reasons a project proponent may choose to subdivide a project area, such as to transfer part of the area to a new project, to report separately on different parts of the project area, or to proceed to remove those subdivided areas because of the presence of weeds, or because they are made up of a substantial area of ineligible vegetation.

Subsection 23(2) provides that in the case of such a subdivision occurring, the vegetation fuel type map for the original project area is taken to:

• be a single map that relates to each subdivided project area; and
• have been created and validated, or revised and validated in accordance with the determination.

Subsection 23(3) clarifies that if the subdivision impacts the accuracy of the vegetation fuel type map, the map must be revised, and if necessary, re-validated within two years of the subdivision. This ensures vegetation fuel type maps remain relevant, accurate and up-to-date.

Division 6—Newness and additionality

Section 24 – Requirement in lieu of newness requirement

Subsection 24(1) specifies that subsection 24(3) sets out requirements in lieu of the newness requirement for a savanna sequestration project for the purposes of subparagraph 27(4A)(a)(ii) of the Act.

The newness requirement is one of the ways the Act ensures ACCU methods only credit abatement that would not have occurred otherwise.

Subsection 24(2) outlines three alternative requirements for savanna sequestration projects in lieu of the newness requirement:

• Paragraph 24(2)(a) provides that newness is not required if the project area is a transferring project area. This recognises that proponents operating projects under a previous savanna emissions avoidance determination may transfer to the determination because the determination has measures in place to ensure it can appropriately calculate and credit additional emissions reductions for these types of projects with transferring project areas.
• Alternatively, paragraph 24(2)(b) provides that newness is not required if the project area does not contain within it, any project covered by a savanna fire management determination or by the determination undertaken in any part of the project area.
• Alternatively, paragraph 24(2)(c) provides that newness is not required, if a project area that has previously been part of a project under a savanna fire management determination or the determination, had no credits issued to it, in relation to any part of the project area during that time. This provision is intended to accommodate situations where a project was registered but revoked before any credits were issued, allowing the area to be treated as new for the purposes of the determination.

These requirements in lieu of the newness requirement will allow most types of previous activity at a project site and meet the OIS because of the way in which the determination determines baseline conditions. These baseline conditions ensure only additional emissions reductions are calculated even in circumstances where there has been previous fire activity in an area.

A note following subsection 24(2) explains that where paragraph 24(2)(c) applies, some provisions of the determination will operate in a modified manner to account for the earlier project activity. These modifications are set out in subsection 24(3).

Subsection 24(3) specifies how certain provisions of the determination are to be applied differently for project areas that meet the condition in paragraph 24(2)(c):

• Paragraph 24(3)(a) provides that, for the purposes of subsection 15(3) (which relates to the relevant application date for determining vegetation fuel type eligibility), the section 22 or section 29 application in which the project area was first identified is to be disregarded. This allows the project to be treated as if it were newly registered under the determination.
• Paragraph 24(3)(b) provides that, for the purposes of subsection 27(1) (which defines a transferring project area), the earlier project from which a project transfers is to be disregarded. This ensures the project area is not treated as a transferring project area under the determination. This is only relevant when the condition in paragraph 24(2)(c) applies.
• Paragraph 24(3)(c) provides that, for the purposes of paragraph 3(1)(a) of Schedule 1 and paragraph 3(1)(a) of Schedule 2 (which relate to the calculation of uncertainty buffers and carry-over amounts), any values previously calculated for the project area are to be disregarded.

The effect of subsection 24(3) is to ensure that, aside from satisfying the requirement in lieu of newness, the earlier project is generally treated as if it had not occurred for the purposes of the provisions listed.

Section 25 – Requirement in lieu of regulatory additionality requirement

Subsection 25(1) provides that Subsection 25(2) specifies a requirement in lieu of the regulatory additionality requirement in the Act, as provided for in subparagraph 27(4A)(b)(ii) of the Act.

Subsection 25(2) of the determination states that a project must not include land where it is required by or under a law of the Commonwealth, a State or Territory to carry out fire management for the primary purpose of reducing emissions from fire or sequestering carbon in living biomass and dead organic matter.

The effect of section 25(2) is that if a project proponent is required by or under a Commonwealth, State or Territory law to reduce emissions from fire or sequester carbon in living biomass and dead organic matter on that land, then the project will not meet the requirement in lieu of regulatory additionality. In this situation, the project cannot be declared an eligible offsets project, as it will not result in additional abatement. However, if a project is required by a Commonwealth, State or Territory law to undertake planned fire management for any other purpose, such as asset protection, then the project will not fail this eligibility requirement.

Division 7—Projects that include transferring project areas

Section 26 – Simplified outline of this Division

Section 26 provides a simplified outline of the Division.

This Division contains provisions for project areas that were previously part of a project covered by a savanna fire management determination, or another project covered by the determination, that seek to become a new savanna sequestration project. These project areas are known as transferring project areas.

A project area may be moved from one savanna sequestration project to another under section 23 of the Rule.

Where the original project is an emissions avoidance project covered by a savanna fire management determination, project areas from that original project may be transferred to a savanna sequestration project under the determination in two ways. Under section 30A of the Rule, all project areas from the original project may be moved, which requires revocation of the original project’s section 27 declaration – which is the declaration under section 27 of the Act that the project is an eligible offsets project. Alternatively, under section 30B of the Rule, only some project areas may be moved, which requires a variation of the original project’s section 27 declaration to remove the transferring areas.

In both cases, the new savanna sequestration project would need to be declared as an eligible offsets project and would have a new crediting period.

Section 27 – Meaning of transferring project area and related definitions

Subsection 27(1) provides that a project area is considered a transferring project area if, immediately before becoming part of a savanna sequestration project under the determination, it was a project area of either a project covered by a savanna emissions avoidance determination or a project covered by Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018 (the 2018 Determination) or a different project covered by the determination.

A note makes it clear that subsection 27(1) is modified in certain cases where the in lieu of newness requirement, as described in paragraph 24(2)(c), has been satisfied. In those cases, paragraph 24(3)(b) sets out how the modification applies.

Subsection 27(2) provides that a transferring project area’s former determination is the determination that applied to the project it was part of most recently, before it became part of the current savanna sequestration project.

A note to subsection 27(2) makes clear that a ‘former determination’ can be the Determination.

Subsection 27(3) provides that a savanna sequestration project is considered a restarting transferring project if it meets all the following three conditions:

• When it was first approved and declared eligible, it included at least one transferring project area.
• The former determination for each transferring project area was a savanna emissions avoidance determination.
• Before the new project was approved and declared eligible, the Regulator either officially removed those transferring project areas from their original project by revoking their section 27 declaration, or varied the declaration to remove each transferring project area.

Subsection 27(4) clarifies that the reference to ‘former project’ in subsection 27(1) could refer to the project immediately before it became a project covered by this instrument following an approval under section 130 of the Act.

Section 28 – Requirements for projects with transferring project areas

Section 28 sets out requirements that apply to savanna sequestration projects that include one or more transferring project areas. These requirements ensure continuity between the former determination and this determination.

Subsection 28(1) provides that for each transferring project area, the final calendar year for which the project area was reported on under the former determination, and the first calendar year for which the project area is reported on under the determination must be consecutive. This ensures that there is no gap in reporting between the former project and the new/current savanna sequestration project.

Subsection 28(2) sets out an eligibility requirement specific to restarting transferring projects. It requires that such projects must be declared eligible in accordance with the process set out in the CFI Rules.

Subsection 28(3) provides that the requirement for a project area to be clear of relevant weed species does not apply to land that will be removed.

Subsection 28(4) defines the terms relevant application and relevant decision on a transferring project area as used in section 28.

• A relevant application includes a section 22 application, a section 29 application, or a section 128 application.
• A relevant decision on a transferring project area is a decision on such an application that would result in a transferring project area becoming a project area, or part of a project area of a project covered by the determination.

Section 29 – Crediting period for projects that have a transferring project area

Section 29 specifies the crediting period for projects with transferring project areas.

A note at the start of section 29 outlines that subsection 69(2) of the Act sets out the requirements for the crediting period for an eligible offsets project. Under paragraph 69(2)(a) of the Act, the default crediting period for a project covered by the determination is 25 years. However, paragraph 69(2)(b) of the Act allows for a different crediting period to be specified in the applicable methodology determination.

The note clarifies that this section specifies a shorter period for projects that have a transferring project area, depending on eligible interest holder consents. The note also draws attention to subsection 69(4) of the Act which sets out how the start time for a crediting period is calculated. It also clarifies that the start time of the crediting period for a project for which this instrument applies, as a result of an approval under section 130 of the Act, is the start time of the crediting period of the project under its former determination.

Subsection 29(1) applies where a project with transferring project areas has gained new consents from eligible interest holders as part of their relevant transfer application (being a section 22 application, a section 29 application or a section 128 application). In these circumstances, the crediting period for the project is:

• For restarting transferring projects, 25 years, minus the period of time between when this determination came into force and when the project was first declared eligible under this determination (paragraph 29(1)(a)).
• For projects to which this determination applies as a result of a section 130 approval, the crediting period is 25 years plus the period of time the project area was covered by its former determination, minus the period of time between when this determination came into force and when the project was approved under section 130 of the Act (paragraph 29(1)(b)).
• In all other cases, the crediting period is 25 years (paragraph 29(1)(c)).

This ensures that projects do not operate for longer periods of time than was initially foreseen unless eligible interest holders have consented. It also encourages projects to get new consents. This approach also ensures there is no benefit to projects who transfer at a later date as this would encourage projects to delay transfer. This is not the intent.

Subsection 29(2) applies where consents were not obtained from new eligible interest holders. In these circumstances, the crediting period is:

• For restarting transferring projects, 25 years, minus the number of years the project area was already credited under a previous savanna emissions avoidance method (paragraph 29(2)(a)).
• For projects to which this determination applies as a result of a section 130 approval, the crediting period is 25 years (paragraph 29(2)(b)). For such projects, the start of their crediting periods remains the same date as before the section 128 application was made.
• For all other projects, the crediting period is 25 years minus the period of time for which the project area had been reported on under its former determination and any other savanna emissions avoidance determination, as calculated under subsection 29(3) (paragraph 29(2)(c)).

For the purposes of calculating the crediting period under paragraphs 29(2)(a) and (c), subsection 29(3) provides the formula for calculating the period of time for which the project area was reported on while covered by the former determination and any other savanna emissions avoidance determination. The period of time is between:

• 1 January 2015, or the start date of the previous project’s crediting period, whichever is later; and
• the date the project became an eligible offsets project under this determination.

The time between these two dates is the number of years the area was already credited.

That amount is then subtracted from the standard 25-year crediting period for this project type.

Section 30 – Vegetation fuel type map for transferring project area

Subsection 30 sets out when a map is taken to be a vegetation fuel type map for a transferring project area.

Subsection 30(1) clarifies that this section only applies if:

• The project area is a transferring project area—meaning it was previously part of another savanna fire management project.
• A vegetation map or vegetation fuel type map was already created and validated for that area under the former determination (the determination that applied to the project area before the area joined the current project).

Subsection 30(2) provides that the previously validated map is automatically accepted as a vegetation fuel type map under the current determination. It also clarifies that the pixels (individual units of the map) are treated as mapping units, which are the basic units used for calculating emissions and abatement. This ensures continuity and avoids requiring duplicate mapping work for areas that have already been properly mapped.

Subsection 30(3) states that if the previously validated map requires any updating or revision under the former determination, before it became a transferring project area, the project proponent must notify the Regulator in writing at the time the area becomes a transferring project area and revise the map as required under the former determination.

Subsection 30(4) provides for how to interpret vegetation classifications from older maps. If a map created under a previous savanna emissions avoidance method refers to a vegetation class, that reference is now treated as referring to the corresponding vegetation fuel type, as defined in the Technical Guidance Document. This ensures consistency in terminology and classification across different versions of the method, allowing older maps to be used reliably under the new rules.

Division 8—Project applications

Section 31 – Information to include in section 22, 29 and 128 applications

Section 31 sets out information requirements for applications made under section 22, section 29 or section 128 of the Act, for savanna sequestration projects that include transferring project areas or areas where eligible capacity building fire management has been conducted.

A section 22 application is made under section 22 of the Act which provides that a person may apply to the Regulator for the declaration of an offsets project as an eligible offsets project.

A section 29 application is made in accordance with section 29 of the Act which provides that a person may apply to the Regulator to vary an offsets project that was declared under section 27 of the Act, so far as the project identifies the project area or areas.

A section 128 application is made under section 128 of the Act and 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 allows proponents to transfer their projects to a new or updated methodology determination, where appropriate.

Subsection 31(1) applies to savanna sequestration projects that contain one or more transferring project areas. The section 22, 29 or 128 application must:

• state that the project includes transferring project areas;
• identify each transferring project area;
• state the unique project identifiers of the projects from which those areas are being transferred; and
• contain details of any consents obtained from any persons who hold an eligible interest in any area of land in the transferring project area and evidence that those persons consented to the project.

Paragraph 31(1)(e) only applies to section 29 applications – which must include in their application, the results of equations 5, 14 and 15 specified in Schedules 1 and 2 of the determination (as applicable).

Subsection 31(2) applies to savanna sequestration projects that include one or more areas where eligible capacity building fire management has been undertaken. The section 22 application or section 29 application must include a statement that capacity building fire management is conducted, identify each capacity building fire management area, describe in detail the capacity building fire management activities carried out in each, and provide supporting evidence—such as fire permits, burning records, or reports submitted to relevant authorities—that the activities have occurred.

Subsection 31(3) specifies that if the section 22, 29 or 128 application concerns one or more project areas containing weed-affected areas, the application must include a statement of that fact, identify the weed-affected area, the date of any treatment and details of the treatment.

Part 4—Net abatement amount

Division 1—Preliminary

Section 32 – Operation of this Part

For paragraph 106(1)(c) of the Act, Part 4 of the determination specifies the method for working out the net abatement amount for a reporting period for a savanna sequestration project that is an eligible offsets project.

Section 33 – Simplified outline of this Part

Section 33 provides a simplified outline of Part 4.

In the determination, carbon abatement is accounted for by estimating:

• the avoidance of emissions of greenhouse gases (methane and nitrous oxide) into the atmosphere; and
• the carbon dioxide that is removed from the atmosphere and sequestered in living biomass and dead organic matter in savannas.

Savanna sequestration offsets projects under the determination are subject to permanence period obligations under the Act. These obligations relate to maintaining credited carbon stocks for the duration of the permanence period.

To work out the net abatement amount in relation to a reporting period for a savanna sequestration project, the project proponent must calculate the adjusted contributions from emissions avoidance and from sequestration of carbon each calendar year that ends during the reporting period and add these together. These calculations must be performed using SavCAM.

The calculations in the determination are made over whole calendar years. It is not possible to calculate abatement over a period shorter than one calendar year or over a twelve‑month period not beginning on 1 January. While it is not possible to calculate abatement over less than a whole calendar year, this does not prevent or impact projects being declared eligible at any date during the year. For example, if a project was declared eligible on 1 December, then the crediting period starts on that date (see sections 69-70 of the Act for exceptions). Even though the crediting period starts on December 1, the abatement is calculated for the entire calendar year, because that year ends within the reporting period. This approach ensures abatement is calculated and credited, for the first year following the end of the baseline period, ensuring no ‘gap’ year between the baseline period and the crediting period (the only exception being when capacity building fire management has occurred). Abatement calculations are also made for every calendar year that ends during the crediting period. In this example, the final 11 months of the crediting period will not have any abatement calculated. Nevertheless, the project would have had 25 full years of abatement calculated and credited.

If a project has more than one project area, the net abatement from emissions avoidance and sequestration must be calculated separately for each project area. These values can then be summed across all project areas being reported on - see subsection 36(2). It is not permitted to account for negative abatement in one project area by adjusting positive abatement in another project area. For project areas that span both the high and low rainfall zones, SavCAM will automatically account for each part of a project area that is in a single rainfall zone, then add the amounts for the different rainfall zones together.

When calculating the contribution to the net abatement amount from emissions avoidance, SavCAM calculations account for emissions for all fuel classes (that is, grass fuel, fine fuel, coarse fuel, and heavy fuel and the fire impacted proportion of living biomass). When calculating the contribution to the net abatement amount from sequestration, SavCAM calculations account for living biomass and dead organic matter that consists of coarse fuel and heavy fuel.

Section 34 – Use of SavCAM

Section 34 provides that if the determination states that a calculation is to be undertaken using SavCAM, then SavCAM must be used in accordance with any guidance material on the SavCAM website. That means, the website where SavCAM is hosted, which is part of the broader Departmental network. The definition of SavCAM in section 6 makes it clear that SavCAM is incorporated as it is in force from time to time, so proponents must use the latest version of SavCAM unless the Technical Guidance Document states otherwise. The definition of SavCAM also makes it clear that if there is any challenge in accessing a particular version of SavCAM which was to be used, then the latest version is to be used instead. This is intended to assist the Regulator in administering the method over longer period of time.

Section 35 – Overview of gases accounted for in abatement calculations

Paragraph 133(1)(e) of the Act requires all material emissions emitted as a direct consequence of carrying out the project to be deducted from the net abatement calculations.

Section 35 of the determination provides an overview of the emissions sources and carbon pools, and associated greenhouse gases relevant to working out the net abatement amount for a savanna sequestration project. The gases to be taken into account when calculating abatement are:

• methane and nitrous oxide emissions from the burning of flammable vegetation (fine, coarse, and heavy fuels, and the fire-impacted proportion of living biomass) in the project area during the baseline period and the reporting period; and
• carbon dioxide from the sequestration of carbon in living biomass and dead (coarse and heavy) organic matter.

Emissions from a number of specified sources are not accounted for in the net abatement calculations as these are immaterial when compared to fire emissions. These include emissions from decomposition and degradation of living matter in the dead organic matter and soil. Emissions from existing livestock are excluded from the calculations, provided their numbers don’t significantly increase because of the project. Emissions from fossil fuels used to carry out the project are also excluded, since they are considered too small to materially affect the results.

Termite emissions are excluded from the greenhouse gas assessment boundary because they are considered immaterial. While termite methane emissions may be higher in low-rainfall zones—due to greater termite density and lower fuel loads compared to high-rainfall zones—there is limited research on how fire regimes, soil types, and termite species affect these emissions. Fire remains the dominant source of methane in both zones (likely over 90%). Although termite emissions may vary slightly due to project activities, these changes are small relative to total termite emissions and cannot currently be quantified. Therefore, excluding termite emissions is considered reasonable for both rainfall zones.

Division 2—Calculation of net abatement amount

Section 36 – The net abatement amount, A

Subsection 36(1) sets out the calculation for determining the net abatement amount, A, for a calendar year in the reporting period. It is used to calculate abatement resulting from fire management for both emissions avoidance and sequestration of carbon in living biomass and dead organic matter.

The net abatement amount is equal to the sum of the adjusted contribution to net abatement from emissions avoidance and the adjusted contribution to net abatement from sequestration in each project area and each full calendar year that ends in the reporting period.

The adjusted contribution to net abatement from emissions avoidance must be calculated using either SavCAM or Schedule 1. The adjusted contribution to net abatement from sequestration must be calculated using either SavCAM or Schedule 2.

SavCAM automates the calculations in Schedule 1 and Schedule 2.

Adjustments to calculations—multiple project areas

Subsection 36(2) sets out how the net abatement amount is calculated for a project with more than one project area. This subsection provides that to determine the net abatement for the entire project, proponents must first calculate the value of net abatement for each project area (A) and then add these values together.

Part 5—Reporting, record-keeping, monitoring and notification requirements

Subsection 106(3) of the Act provides that a methodology determination may require the project proponent of a particular type of project that is an eligible offsets project to comply with specified reporting, record-keeping and monitoring requirements.

Under Parts 17 and 21 of the Act, a failure to comply with these requirements may constitute a breach of a civil penalty provision, and a financial penalty may be payable.

Part 5 of the determination provides any additional reporting, record-keeping and monitoring requirements that project proponents must adhere to. These are in addition to any requirements specified in the Act and the Rule.

Division 1—Offsets report requirements

Section 37 – Operation of this Division

Section 37 states that for the purpose of paragraph 106(3)(a) of the Act, this Division outlines the specific information that must be included in an offsets report for a savanna sequestration project that has been declared an eligible offsets project. Paragraph 106(3)(a) of the Act provides that a methodology determination may require project proponents to include specified information relating to the project in each offsets report about the project.

A note to the section makes it clear that there are other reporting requirements in the Rule that proponents should also be aware of.

Section 38 – Information that must be included in offsets reports

Section 38 sets out the information that must be included in each offsets report submitted to the Regulator.

Subsection 38(1) provides that the information in paragraphs (a) to (j) must be included in the offsets report for each project area.

Paragraph 38(1)(a) provides that offset reports must include a statement that the project area was not varied during the reporting period in a manner that is contrary to the CFI Rules.

Paragraph 38(1)(b) applies where a project area was added to the project during the reporting period as a result of a variation to the section 27 declaration and is being reported on for the first time. In such cases, the proponent must include a statement confirming this is the first report for that area.

Paragraph 38(1)(c) applies to subdivided project areas being reported on for the first time and provides that the offsets report must include:

• a statement that the project area is a subdivided area and is being reported on for the first time; and
• the date on which the relevant variation to the section 27 declaration took effect.

Paragraphs 38(1)(d) and (e) require inclusion of a copy of each abatement report generated by SavCAM for each project area; and if a project area is a newly reported subdivided area, the results of equations 5, 14 and 15 (as specified in Schedules 1 and 2 of this determination), and the inputs used for those calculations.

Paragraph 38(1)(f) applies where the project proponent is required to monitor the project area under section 42. In such cases, the results of the monitoring must be included in the offsets report.

Paragraph 38(1)(g) requires a declaration that livestock density in the project area has not increased as a result of the project. This supports the eligibility requirements in section 12, including that the project abatement is not achieved through increased grazing pressure, which could undermine environmental outcomes. This means the project proponent must not increase cattle grazing, beyond that which would have normally occurred in the absence of the project. The project cannot be one in which stocking densities are deliberately increased in or adjacent to the project for the primary purpose of reducing fuel loads and hence fire activity.

Paragraph 38(1)(h) applies where relevant weed species have been eradicated and requires the offsets report to include a map of the affected area in a geospatial format and evidence that the weeds were permanently removed.

Paragraph 38(1)(i) requires a copy of the latest version of the vegetation fuel type map used to calculate abatement or in SavCAM for the relevant area.

Paragraph 38(1)(j) specifies that the offsets report must also include both the relevant project management plan that was in effect at the end of the reporting period, and a statement describing how and why any activities that were set out in the project management plan were not undertaken (if applicable).

Subsection 38(2) provides that, for each project area and each calendar year of the reporting period, the offsets report must include detailed information about fire management activities and planning.

Paragraph 38(2)(a) applies if planned burning was carried out. The offsets report must include:

• a statement confirming that planned burning occurred;
• a description of the location, timing, and extent of the burning;
• an indication of whether, and to what extent, the burning satisfied the requirements of section 18. Section 18 lists requirements for carrying out savanna fire management. These requirements ensure that burning meets the objectives of paragraph 12(1)(a) of the determination to sequester carbon and avoid emissions of methane and nitrous oxide.

Paragraph 38(2)(b) applies if planned burning was not carried out. The offsets report must include:

• a statement confirming that no planned burning occurred; and
• an explanation of the reasons why it was not undertaken. Under subsection 18(3), if the failure to conduct planned burning was due to circumstances beyond the proponent’s control, the project does not become ineligible.

Paragraph 38(2)(c) requires the inclusion of the baseline carbon stock and carbon stock at the end of each calendar year for each project area. This value is calculated using SavCAM.

Subsection 38(3) specifies that if a project proponent was required or elected to create or revise one or more vegetation fuel type maps under Division 5 of Part 3 during the reporting period, the proponent must include the following information in their offsets report:

• A statement confirming one or more vegetation fuel type maps were created or revised during the reporting period, and information on which vegetation fuel type maps were created and or revised including when this occurred and for which project area or areas – paragraphs 38(3)(a) and (b).
• For each map that was created or revised, the proponent must include:
  • a copy of the map that was created or revised and validated (if required) in accordance with the provisions in Division 5 of Part 3 – subparagraph 38(3)(c)(i);
  • if the map was created, a map that combines the map and the spatial data layers showing the relevant rainfall zones– subparagraph 38(3)(c)(ii);
  • if the map was revised, a statement explaining the reasons why the map required revision – subparagraph 38(3)(c)(iii);
  • the ERF audit report, as applicable, relating to the validation of the vegetation fuel type map – subparagraph 38(3)(c)(iv). The ERF audit report is defined in subsection 36(7) of the National Greenhouse an Energy Reporting Act 2007.

Subsection 38(4) specifies that if, during the reporting period, any project area (including a subdivided project area) was removed from the project as a result of section 15, the offsets report must include, for each such project area:

• a statement that the project area was removed, including a description of each area that was removed and the date of removal – paragraph 38(4)(a) and (b); and
• the portion of the cumulative net abatement amount that was attributable to sequestration in the removed project area, calculated in accordance with clause 12 of Schedule 2, up to the end of the year before the area was removed – paragraph 38(4)(c).

Subsection 38(5) contemplates the scenario where a factor or parameter that is defined or calculated by reference to another instrument or writing is not the factor or parameter in an instrument or writing that is in force at the end of the reporting period by virtue of subsection 11(1). Where it is not possible to define or calculate the factor or parameter by reference to the instrument or writing as in force at the end of the reporting period, paragraph 11(2)(b) allows factors or parameters to be calculated by reference to other versions of the instrument or writing, in which case, the offsets report about the project for the reporting period must include the following information:

• versions of the instrument or writing that were instead used to calculate the parameter – paragraph 38(5)(a);
• start and end dates for each version used – paragraph 38(5)(b); and
• reasons why it was not possible to define or calculate the factor or parameter using the version in force at the end of the reporting period – paragraph 38(5)(c).

Subsection 38(6) requires that if a relevant weed species is detected in any project area during the reporting period, the offsets report must include, for each such project area:

• a statement that a relevant weed species was detected – paragraph 38(6)(a);
• the location of weed-affected areas in geospatial format – paragraph 38(6)(b);
• evidence of when and how the weed species was first treated – paragraph 38(6)(c);
• evidence of continuing treatment of the weed species – paragraph 38(6)(d);
• if the treatment of weed species is not possible due to circumstances beyond the proponent’s reasonable control in any year – details, evidence and a statement setting out that fact – paragraph 38(6)(e); and
• if and when the weed species is eradicated, a statement of that fact and supporting evidence – paragraph 38(6)(fe)

Subsection 38(7) states that, for the purposes of section 38, ERF audit report has the same meaning as in the National Greenhouse and Energy Reporting Act 2007.

Division 2—Record keeping requirements

Section 39 – Operation of this Division

Paragraph 106(3)(c) of the Act provides that a methodology determination may require project proponents to adhere to specified record keeping requirements for an eligible offsets project to which it applies.

Section 39 states that for the purpose of paragraph 106(3)(c) of the Act, Division 2 of Part 5 sets out the record-keeping requirements for a savanna sequestration project that is an eligible offsets project.

A note to section 39 states that other record-keeping requirements are set out in the Rules.

Section 40 – Record keeping requirements

Section 40 sets out the record-keeping requirements for project proponents in relation to the calculation of the net abatement amount.

Section 40 specifies that the project proponent must retain records of each SavCAM record-keeping report. These reports are generated by SavCAM and provide a record of the data inputs and assumptions used in the calculation of net abatement. Additionally, section 40 requires the project proponent to retain all data files used when calculating the net abatement amount.

Division 3— Monitoring requirements

Section 41 – Operation of this Division

Paragraph 106(3)(d) of the Act provides that a methodology determination may require project proponents to adhere to specified requirements to monitor an eligible offsets project to which it applies.

Section 41 states that for the purposes of paragraph 106(3)(d) of the Act, Division 3 of Part 5 sets out monitoring requirements for savanna sequestration projects that are eligible offsets projects.

A note to section 41 states that other monitoring requirements are set out in the Rules.

Section 42 – Monitoring requirements

Section 42 specifies that a project proponent for a savanna sequestration project must monitor for the presence of each relevant weed species in each project area in accordance with the project management plan for the project.

Relevant weed species are weeds which, where present, are known to result in more severe fire behaviour compared to the fire behaviour in any of the vegetation fuel types for which abatement calculations are made in the determination. For example, where relevant weed species are present, fires are likely to burn at greater intensities than in areas where there is an absence of relevant weed species. This results in more greenhouse gases being emitted to the atmosphere and less carbon being sequestered in dead organic matter for fires in areas where relevant weed species are present compared to from fires in areas where relevant weed species are absent.

Section 16 specifies requirements to manage relevant weed species.

Division 4— Notification requirements

Section 43 – Operation of this Division

Section 43 states that operation of Division 4 of Part 5 of the determination. For the purposes of paragraph 80(1)(b) of the Act, Division 4 sets out the notification requirements that apply to a savanna sequestration project that is an eligible offsets project.

Section 44 – Notification requirements

Section 44 provides that if a relevant weed species is detected in a project area for the first time, the project proponent must notify the Regulator within 60 days of becoming aware of the detection. The notification must include the:

• date on which the weed species was detected;
• name of the weed species detected; and
• location (in geospatial format) of its decision.

Part 6—Partial reporting

Section 45 – Partial reporting

Section 45 provides that for the purposes of section 77A of the Act, an overall project may only be divided into parts that consist of one or more whole project areas.

The effect of subsection 77A(1) of the Act is that project proponents may divide a project into two or more parts and report on those parts as if they were projects in their own right. Each of these parts can be reported on separately. For example, a proponent of a project under the determination may choose to divide the project so it can combine multiple smaller projects or land areas into a single, larger project, or for partial reporting or other reasons.

Subsection 77A(2) of the Act provides that the division of the overall project must comply with such requirements (if any) as are set out in the applicable methodology determination for the overall project. The effect of section 77A of the Act is that, if an overall project is divided in this manner, the project proponent must provide the Regulator an offsets reports for the period for which the project is divided, as if each part into which the project has been divided were an eligible offsets project in its own right. An offsets report is not required for the entire, undivided project. Section 77A of the Act does not otherwise impact on when offsets reports are required.

Schedule 1—Emissions avoidance—calculation of adjusted contribution to net abatement amount for a calendar year

Division 1—Preliminary

Clause 1 – Simplified outline of this Schedule

Clause 1 provides a simplified outline of Schedule 1. While simplified outlines are included to assist readers to understand the substantive provisions, the outlines are not intended to be comprehensive. It is intended that readers should rely on the substantive provisions.

To calculate the net abatement amount for a project area, the first step is to determine the emissions avoided during the calendar year (AEA). This is done by subtracting the actual emissions from savanna burning in that year from the mean annual emissions over the baseline period.

Next, the adjusted contribution to net abatement (AEA,adj) is calculated by allocating part of AEA to an uncertainty buffer. This buffer accounts for the risk that emissions in some years may exceed the baseline average. The buffer generally starts at zero—unless the area is a transferring project area—and is capped at 5 per cent of the mean annual baseline emissions (BU,Cap). When AEA is negative, the buffer is reduced; when AEA is positive, the buffer is increased, up to the cap. Projects which continuously perform well would meet the threshold for the uncertainty buffer cap within the first few project years and not need to continue to contribute to the buffer. In total, the uncertainty buffer for most projects will be 5% by the end of the project’s crediting period, therefore acting as an overall discount to ensure the method is conservative.

The cap and other values linked to the baseline period are recalculated annually and may change due to updates to referenced documents, revisions to the vegetation fuel type map, or changes to project area boundaries.

Division 2— Calculations

Clause 2 – Calculation of adjusted contribution to net abatement amount from emissions avoidance for a calendar year, AEA,adj

Paragraph 36(1)(b) provides that the adjusted contribution to the net abatement amount from emissions avoidance for each calendar year y, is determined in Schedule 1.

Net annual abatement is adjusted to manage inter-annual variability in avoided emissions and the risk of the project containing some year(s) with emissions that are higher than the baseline mean annual emissions. Adjusting the net annual abatement in each project area reduces the risk of over-crediting of projects.

Clause 2 provides that in order to calculate this adjusted contribution from emissions avoidance for a particular calendar year y, it is necessary to:

• Calculate the previous year’s uncertainty buffer (BU,Prev) in tonnes CO₂-e, in accordance with clause 3 (paragraph 2(a))
• Calculate the contribution to the net abatement amount from emissions avoidance (AEA) for the calendar year, in tonnes CO₂-e, in accordance with clause 4 (paragraph 2(b))
• Calculate the uncertainty buffer cap (BU,Cap) for the project area for the calendar year, in tonnes CO₂-e, in accordance with clause 5 (paragraph 2(c))
• Determine which set of conditions in the table set out within the clause applies to the project area for the calendar year (paragraph 2(d))
• Based on the applicable row of the table, calculate both the adjusted contribution to net abatement (AEA,adj) for the calendar year, in tonnes CO₂-e; and the current year’s uncertainty buffer (BU,Curr) for the project area, in tonnes CO₂-e (paragraph 2(e))

There are two notes. Note 1 explains that Division 3 provides adjustments to the calculation of abatement where a project area:

• spans both high and low rainfall zones (see clause 7); or
• has not carried out planned fire burning that year (see clause 8); or
• has been divided into two or more subdivided project areas (see clause 9).

Note 2 states that if the vegetation fuel type map is revised during a reporting period under section 22 of the determination, the version of the map in force at the end of the reporting period must be used for all calculations relating to that period—including the current year’s uncertainty buffer, the uncertainty buffer cap, and baseline-related amounts. However, any uncertainty buffer calculated for a previous year using an earlier version of the map is not recalculated using the revised version.

The examples and flow diagrams, below, describe how the table in clause 2 calculates the adjusted contribution to net abatement and the value of the current year’s uncertainty buffer. All possible scenarios are summarised in the decision tree and the examples, below, and adhere to the rules in the table in clause 2.

The adjustment applied to net annual project abatement in the table in clause 2 considers whether the:

• value in the uncertainty buffer at the end of the previous calendar year (BU,Prev) was more or less than zero or not;
• capped uncertainty buffer value has been achieved; and
• net annual project abatement is greater or less than zero.

When the value of the uncertainty buffer at the end of the previous calendar year was greater than, or equal to, zero but less than the capped value, and net annual abatement is greater than zero, then a contribution from net abatement is made to the uncertainty buffer. This contribution is a maximum of 10% of the total net annual abatement from emissions avoidance, such that the amount in the uncertainty buffer does not exceed the uncertainty buffer cap value.

If the contribution to the net abatement amount from emissions avoidance for any calendar year in the crediting period is a negative amount, the adjusted contribution to the net abatement amount from avoided emissions for the calendar year is taken to be zero. This net negative abatement is accounted for by the amount in the uncertainty buffer. If a negative amount remains in the uncertainty buffer, this is accounted for in subsequent calendar year(s) before further credits are issued.

An exception to this occurs when the sum of the net abatement amount from emissions avoidance and the amount in the uncertainty buffer from the previous year sum to a value greater than the value for the uncertainty buffer cap. In this case, the adjusted net abatement amount from emissions is the sum of the net abatement amount and the uncertainty buffer from the previous year, less the value for the uncertainty buffer cap.

Clause 3 – The previous year’s uncertainty buffer, BU,Prev

Clause 3 defines the value of the uncertainty buffer for the previous year, BU,Prev for the purposes of paragraph 2(a) and subject to clause 12. Clause 12 provides for how to calculate the previous year’s uncertainty buffer when a project area is divided into subdivided project areas.

Paragraph 3(1)(a) specifies that if it is the first calendar year of the project, or the uncertainty buffer was not calculated under a former determination, then the value for BU,Prev is zero.

A note states that the uncertainty buffer might have been calculated as the current year’s uncertainty buffer BU,Curr under the determination or the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2026 or the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Emissions Avoidance) Methodology Determination 2018 or the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management— Sequestration and Emissions Avoidance) Methodology Determination 2018, or as the amount Ry under the Carbon Credits (Carbon Farming Initiative—Emissions Abatement through Savanna Fire Management) Methodology Determination 2015.

Subclause 3(2) provides that if the project had been reported on for that year, the relevant value for the purposes of paragraph 3(1)(a) is the value reported in the offsets report.

A note states that paragraph 3(1)(a) can be modified in some cases in line with paragraph 24(2)(c) of the determination. That is, if the requirement in lieu of the newness requirement set out in paragraph 24(2)(c) of the determination is met, disregard any value for the uncertainty buffer that might have been calculated for the project area referred to in paragraph 24(2)(c) of the determination, in accordance with paragraph 24(3)(c) of the determination. As a result, for projects affected by this provision, the value for the uncertainty buffer BU,Prev in the first calendar year under the determination is taken to be equal to zero. This applies in the situation where a project had been undertaken in the project area or part of the project area, but no credits have been issued in relation to any part of the project area while it was covered by any such methodology determination.

Clause 4 – The contribution to the net abatement amount from emissions avoidance for a calendar year, AEA

Clause 4 provides a definition of AEA, and sets out equation 2 used to determine the contribution to the net abatement amount in tonnes CO2e from the avoidance of emissions for a calendar year. The contribution to the net abatement amount from the avoidance of emissions for a calendar year is the difference between the mean annual baseline fire emissions for the project area and the fire emissions for the project area for the calendar year.

The mean annual baseline emissions for the project area are calculated in accordance with clause 6, and the fire emissions for the project area for the calendar year parameter is provided by SavCAM.

Clause 5 – The uncertainty buffer cap for a calendar year BU,Cap

Clause 5 sets out equation 3 used to calculate the value of the uncertainty buffer cap, for the project area for a given calendar year in tonnes of CO2e. The uncertainty buffer cap must be calculated for each calendar year being reported on, as the value may change if there are updates to input parameters used to calculate the mean annual baseline fire emissions.

The uncertainty buffer cap is equal to 5% of the mean annual baseline fire emissions for the project area, which in turn are calculated using equation 4 – in clause 6 of this Schedule.

Clause 6 – Mean annual baseline fire emissions

Clause 6 provides that mean annual baseline fire emissions are calculated using equation 4 for project areas, or parts of project areas, located in either the low-rainfall or high-rainfall zones.

Equation 4 calculates the mean annual baseline fire emissions by multiplying two values:

• 1 divided by the number of years in the baseline period; and
• the total fire emissions for the project area (in tonnes of CO₂-e) from all the years in the baseline combined. This can also be calculated by SavCAM.

For projects that have not been registered under a former determination, YB will be 20 years. For transferring projects, YB in the equation will vary depending on whether the project area (or project area part) is in the low rainfall or the high rainfall zones, to reflect the number of years in the baseline period.

The mean annual baseline fire emissions must be recalculated each calendar year as the value may change if there are updates to input parameters.

Division 3— Adjustments to calculations

Clause 7 – Adjustments resulting from project area spanning rainfall zones

Clause 7 specifies states that if a project area has two project area rainfall parts (spans both rainfall zones), then the adjusted contribution to the net abatement amount from emissions avoidance, AEA,adj, must be calculated separately for each project area part, and then these values are summed to determine the adjusted contribution to the net abatement amount from emissions avoidance for the whole project area.

As a result, any positive or negative amounts to be carried forward for the following year (the uncertainty buffer for the project area are at clause 2) must be calculated and forwarded separately for each project area part.

These values cannot be used to adjust similar values for other project areas, such as cancelling out negative values in one project area by using positive values from another project area.

Because adjusted abatement is zeroed in instances of negative abatement, amounts summed from each project area cannot be negative. Negative abatement within a project area is carried over to the adjusted abatement calculation for that project area in the next calendar year. It is important for the calculations that the abatement amounts remain linked to specific project area parts.

Clause 8 – Adjustments resulting from lack of fire activity

Subclause 8(1) states that clause 8 only applies when there has been a lack of fire activity during a calendar year (early dry season fire or late dry season fire).

Subclause 8(2) provides that if no planned burning was carried out in a project area during a calendar year, the value of AEA,adj is assumed to be equal to zero.

This means that instead of calculating actual adjusted abatement for that year, the method uses a default value of zero, meaning the proponent would effectively receive no credits for that year.

Clause 9 – Adjustments resulting from subdivided project areas

Clause 9 applies when a project area has been divided into two or more subdivided project areas. It provides that immediately after the subdivision occurs, the value of the previous year’s uncertainty buffer for the project area BU,Prev which is required to determine the net abatement amount form emissions avoidance in Clause 2 will be equal to BU,Prev,Subdiv. Clause 9 provides that equation 5 will determine the value of BU,Prev,Subdiv.

Equation 5 states that BU,Prev,Subdiv is equal to the multiplication of two values:

• The first value is equal to the mean annual baseline fire emissions for the subdivided project area (in tonnes CO2-e) divided by the mean annual baseline fire emissions for the project area – where both are calculated in accordance with clause 6.
• The second value is equal to the previous year’s uncertainty buffer for the original project area as given by subclause 3(1) as if the project area had not been divided.

Clause 9 determines the proportion of the value in the uncertainty buffer from the original project area attributed to each subdivided project area. For each subdivided project area, the proportion used to distribute the uncertainty buffer value is the mean annual baseline emissions for the subdivided project area compared to the mean annual baseline emissions for the original project area. This allocation of the uncertainty buffer to subdivided project areas only occurs in the year immediately after the original project area was subdivided into two or more subdivided project areas.

Schedule 2— Sequestration—calculation of adjusted contribution to net abatement amount for a calendar year

Division 1—Preliminary

Clause 1 – Simplified outline of this Schedule

Clause 1 provides a simplified outline of Schedule 2. While simplified outlines are included to assist readers to understand the substantive provisions, the outlines are not intended to be comprehensive. It is intended that readers should rely on the substantive provisions.

Section 36 of the determination sets out the net abatement amount for a reporting period. This requires first calculating the unadjusted sequestration amount (ASeq). For the first reporting year, this is generally equal to half of the difference between the carbon stock at the end of the year and the average carbon stock during the baseline period, but it also includes a proportion of released abatement from what is known as the sequestration bank (see clauses 4, 7 and 8). For later years, the value is equal to half the difference between the carbon stock at the end of the year and that of the previous year (and any proportion of released abatement from the sequestration bank).

ASeq is then adjusted to produce ASeq,adj by subtracting any negative abatement carried over from the previous year. A further adjustment is made to account for the risk of reversal and permanence period discount factors that would normally apply under section 16 of the Act. Although these factors are set to zero under the Rule for projects covered by the Determination, a corresponding sequestration buffer is applied to ensure equivalent treatment. These adjustments do not apply to emissions avoidance abatement.

Baseline-related values are recalculated annually and may vary due to updates to referenced documents, revisions to the vegetation fuel type map, or changes to project area boundaries.

The later part of the Schedule sets out some adjustments that need to be made where projects:

• have transferring areas;
• transferred from the 2018 Determination;
• did not have any planned burning carried out during a calendar year;
• are subdivided; or
• contain a substantial area of contiguous ineligible vegetation.

Division 2— Calculations

Clause 2 – Calculation of adjusted contribution to net abatement amount from sequestration of carbon in living biomass or dead organic matter for a calendar year, ASeq­,adj

Clause 2 sets out how to calculate the adjusted contribution to the net abatement amount arising from sequestering carbon in dead organic matter during the calendar year - ASeq,adj.

To calculate the adjusted contribution to the net abatement amount from sequestration (ASeq,adj) for a specific project area, project area part, and calendar year for the purposes of paragraph (b) of the definition in subsection 36(1), the following steps must be followed:

• Calculate the previous year’s carry-over amount (OSeq,Prev) in tonnes CO₂-e, in accordance with clause 3 of this Schedule. Negative carry-over values exist if the previous calendar year’s net sequestration abatement was negative. This could occur if the sequestration abatement for the previous calendar year was negative, or if earlier calendar years had a negative sequestration abatement amount that had not totally been accounted for in subsequent calendar years.
• Calculate the sequestration contribution (ASeq) for the calendar year in tonnes CO₂-e, in accordance with clause 4 of this Schedule.
• Determine the sequestration buffer (BSeq), in accordance with clause 5 of the Schedule. The sequestration buffer corresponds to the permanence period discount number and risk of reversal buffer number that applies to the sequestration component of the net abatement amount, but not to the avoided emissions component of the net abatement amount.
• Identify which set of conditions in the relevant table applies to the project area for the calendar year.
• Based on the applicable row of the table in clause 2, calculate the:
  • adjusted sequestration contribution (ASeq,adj) for the calendar year, in tonnes CO₂-e; and
  • current year’s carry-over amount (OSeq,Curr) for the project area, in tonnes CO₂-e.

The table in paragraph 2(e) specifies the appropriate approach for adjusting the value of ASeq calculated in clause 4 of this Schedule.

The amount ASeq ­represents the change in the amount of carbon that is taken to be sequestered in living biomass and dead organic matter, and in particular, in coarse fuel and heavy fuel, in the project area during the current calendar year. Because carbon is sequestered over time, the value of Aseq is not just equal to the measured difference in carbon stocks in a single year, but is adjusted via a sequestration bank mechanism to account for some of that measured difference not yet having achieved permanence. A value of ASeq that is less than zero represents a reversal of sequestration for the current calendar year. This does not detract from the adjusted contribution to net abatement amount from sequestration for the current calendar year, ASeq,adj, nor from the net abatement amount for the reporting period, A. However, the negative number is carried forward to the following calendar year, and contributes to the amount OSeq,Prev for the following calendar year.

Note 1 in clause 2 makes it clear that Division 3 outlines adjustments to the calculations that apply in circumstances where:

• a project area spans both high and low rainfall zones (see clause 9);
• no relevant fire activity has occurred in the project area between the start of the crediting period and the end of the calendar year (see clause 10);
• a project area has been divided into two or more subdivided project areas (see clause 11);
• a project area sits within a project that has transferred from the 2018 Determination to the Determination (see clause 13).

Examples: Calculation of adjusted contribution to net abatement from sequestration and the current year’s carryover amount for the project area (from table in clause 2)

Clause 3 – The previous year’s carry over amount, OSeq,Prev

Clause 3 defines how to calculate the previous year’s carry-over amount, OSeq,Prev for the purposes of paragraph 2(a) of this Schedule but subject to clause 10. If the project area was subdivided during the calendar year, then the value for OSeq,Prev must be calculated in accordance with clause 10.

Note 1 at the start of clause 3 makes it clear that in some years, the sequestration contribution (ASeq) may be negative—for example, if carbon previously stored in dead organic matter or living biomass is released. While this negative value does not reduce the adjusted sequestration contribution (ASeq,adj) or the overall net abatement amount (A) for that year, it is carried forward into the next year’s calculations as the previous year’s carry-over amount (OSeq,Prev). This carry-over amount, which is either zero or negative, reduces any positive sequestration credited in future years.

Subclause 3(1) defines the value for OSeq,Prev as being the value of OSeq,Curr calculated in the previous calendar year. If OSeq,Curr was not calculated in the previous calendar year, then the value of OSeq,Prev is zero. For project areas transferring from emissions avoidance projects, this value is always equal to zero for the first calendar year under the determination.

Note 2 clarifies that where a project area is part of a project that has transferred from the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018, the previous year's carry over amount might have been calculated as the current year's carry over amount ∆CSeqCurr, as defined in that instrument.

Subclause 3(2) provides that, for paragraph (1)(a), if the project was reported on for the previous calendar year then the relevant value is the value reported in the offsets report.

Note 3 to this subclause notes that paragraph (1)(a) can be modified in some cases in line with paragraph 24(2)(c) of the determination. That is, if the requirement in lieu of the newness requirement set out in paragraph 24(2)(c) of the determination is met, then, in accordance with subparagraph 24(3)(c)(ii) of the determination, disregard any values that might have been calculated in relation to the project area referred to in paragraph 24(2)(c) of the determination. This applies in the situation where a project had been undertaken in the project area or part of the project area, but no credits have been issued for any part of the project area while it was covered by any such methodology determination.

Clause 4 – The contribution to the net abatement amount from sequestration for a calendar year, ASeq

Clause 4 establishes equation 6 and equation 7 to determine the value of the contribution to the net abatement amount from sequestration for a project area for a calendar year, ASeq, in tonnes CO₂-e.

For the first reporting year, the net carbon stock change is calculated using equation 6, which measures the likely sequestered carbon amounts in that year. The net abatement amount Aseq is equal to half the difference between the current year’s carbon stock and the mean annual baseline carbon stock alongside any contribution from the sequestration bank (represented by the release mechanism value R). Because carbon is sequestered over time, the value of Aseq is not just equal to the measured difference in carbon stocks in a single year, but is adjusted via a sequestration bank mechanism to account for some of that measured difference not yet having achieved permanence.

For subsequent reporting years, equation 7 sets out the calculation for determining the contribution to the net abatement amount in tonnes CO2-e from the sequestration for a calendar year, for subsequent reporting years.

This time the contribution to the net abatement amount from the sequestration for a calendar year is the difference between the current year’s carbon stock and the previous year’s carbon stock. Again, the net abatement amount Aseq is equal to half of that amount, alongside any contribution from the sequestration bank (represented by the release mechanism value R).

However, despite subsections (1) and (2), the net carbon stock change for a project area Aseq for the first calendar year in a restarting transferring project’s crediting period is Aseq = R (equation 8). R is the release mechanism value as calculated in accordance with clause 7 of this Schedule. This reflects the judgement that for such projects there is a greater amount of measured carbon stock change within the first year and that this measured carbon stock change (for most of the projects) requires a further 25 years of permanence.

Clause 5 – The sequestration buffer

Clause 5 defines the sequestration buffer that is to be applied to the sequestration abatement for the purposes of paragraph 2(c) of Schedule 2. This combines the effects of the risk of reversal buffer number and permanence period discount number that ordinarily apply in relation to sequestration offsets projects. The risk of reversal buffer number and permanence period discount number values are set to zero in section 9B of the CFI Rules. The sequestration buffer effectively re-applies those discounts, but only to the abatement due to sequestration. That is, all 25-year permanence period projects have a 25 % sequestration buffer and receive 75 % of their sequestration abatement. All 100-year permanence period projects have a 5% sequestration buffer and receive 95 % of their sequestration abatement. The sequestration buffer accounts for the risk that carbon sequestered as a result of the project does not remain permanently in the landscape. Unlike the sequestration bank mechanism, this buffer will permanently discount the amount of sequestration that is credited. This buffer acts in a similar manner to the 5% uncertainty buffer that is applied to discount the calculated avoided emissions of the project in Schedule 1.

Clause 6 – Mean baseline carbon stock for project

Clause 6 establishes equation 8 to calculate the mean annual baseline carbon stock for project areas, or parts of project areas, located in either the low-rainfall or high-rainfall zones.

For projects that have not been registered under a former determination, YB is 25 years. For transferring projects, YB in the equation will vary.

Clause 7 – Release Mechanism

This provision sets out how the annual amount of abatement is determined for release from the sequestration bank for a particular project area. The calculation applies to all calendar years within the project’s crediting period.

The method ensures that the sequestration bank is drawn down in a consistent and orderly manner across the remaining years of crediting. To achieve this, the provision requires an annual release amount to be calculated using a formula that distributes the banked abatement evenly over the number of full crediting years still to occur.

Three inputs are used in this calculation:

• The sequestration bank balance at the start of the year – this represents the total quantity of verified, banked abatement available to be released.
• The total number of full calendar years in the project’s crediting period – this defines the total duration over which the project is eligible to receive credits.
• The number of full calendar years that have already elapsed at the beginning of the year for which the calculation is being undertaken – this identifies how much of the crediting period remains.

Equation 10 uses these inputs to determine the remaining years in the crediting period and then allocates the banked abatement proportionately across that remaining period. This results in a predictable annual release that decreases the sequestration bank gradually, ensuring it is fully exhausted by the end of the crediting period.

The purpose of this mechanism is to provide transparency and consistency in the timing of credited abatement, aligning crediting with the verified sequestration carried forward in the sequestration bank.

Clause 8 – Sequestration Bank

Clause 8 sets out how the amount in the sequestration bank (SB) for each calendar year is calculated. The banking mechanism adjusts the timing of when carbon stock increases are considered ‘sequestered’, in acknowledgement that sequestration requires permanence. The banking mechanism adjusts the calculation of credits for a given year, it does not mean the Regulator is ‘banking’ or holding on to credits for a project. Unless carbon stocks have reversed at the end of the project’s crediting period, the banking mechanism does not permanently discount the amount of credits issued for the sequestered carbon.

Clause 1 sets out that the sequestration bank is calculated using the difference between:

• the deemed net carbon stock in the project area at the end of that first year (drawn from SavCAM); and
• the mean baseline carbon stock (determined by equation 9 of this Schedule).

Only half of this difference is added to the sequestration bank in the first year. This approach ensures that the initial banked amount reflects conservative treatment of early period sequestration, when measurement uncertainty may be higher and project establishment effects may still influence carbon stock trends.

Clause 2 establishes the opening value of the sequestration bank for all subsequent years.

For each year following the first year of the crediting period, the sequestration bank is updated annually based on three components:

1.       The sequestration bank value from the previous calendar year – ensuring continuity from year to year.
2.       The change in deemed net carbon stocks between the current year and the preceding year – again based on SavCAM outputs, and only half of this change is added to reflect conservative accounting.
3.       The amount of abatement released in the previous year – this is subtracted to ensure that once abatement has been credited, it is no longer counted as banked sequestration.

Together, these components ensure that the sequestration bank tracks cumulative verified sequestration over time while adjusting for any abatement already credited.

Previous year’s figures for carbon stocks, sequestration bank balance, and the release mechanism are generally taken to be as calculated in the previous year and reported in the previous offsets report. This means those figures will have been calculated in reference to the previous version of SavCAM, and previous vegetation fuel type maps. Should the previous calculated value not be available it needs to be calculated in accordance with the current instrument.

A different rule applies when a project is a restarting transferring project. In this case, Clause 3 applies and in the first year of the new crediting period the sequestration bank is made up of the entire increase in carbon stock, which is equal to the difference between:

• the deemed net carbon stock at the end of the year; and
• the mean baseline carbon stock.

This reflects that fact that these projects will have accumulated a large proportion of accumulated sequestration, and this should be kept in the sequestration bank until there is more confidence in the longevity of that carbon abatement.

Division 3–Adjustments to calculations

Clause 9 – Adjustments resulting from project area spanning rainfall zones

Clause 9 states that if a project area has two project area rainfall parts, then the contribution to the net abatement amount from sequestration, ASeq,adj, must be calculated separately for each project area rainfall part, and then these values summed to determine the contribution to the net abatement amount from sequestration for the whole project area. Each project area part contains an area wholly within either the high rainfall zone or wholly within the low rainfall zone.

As a result of clause 7, positive or negative amounts to be carried forward for the following year (the carry-over amount for the project area at clause 2– OSeq,Prev) must be calculated and forwarded separately for each project area part. If such amounts are negative for one project area part, the negative does not detract from any positive abatement that might arise in the other project area part. If such amounts are positive for one project area part, the positive does not cancel out any negative abatement that might arise in the other project area part. This means that positive or negative abatement in one project area part cannot be used to offset negative or positive amounts for other project area parts.

Each year, OSeq,Prev can be positive or negative and is required for calculation of the following year’s abatement. Values for each project area part cannot be used to adjust values for other project area parts or other project areas. For example, if for a calendar year, the value for OSeq,Prev is positive in the project area part representing the high rainfall zone, this cannot be used to cancel out a negative value for OSeq,Prev for the project area part representing the low rainfall zone.

It is important for the calculations that the abatement amounts remain linked to specific project area parts.

Clause 10 – Adjustments resulting from lack of fire activity

Subclause 10(1) states that clause 10 only applies when there has been a lack of fire activity during a calendar year (early dry season fire or late dry season fire).

Subclause 10(2) provides that if no planned burning was carried out in a project area during a calendar year, the adjusted sequestered abatement Aseq,adj for that calendar year is taken to be zero. This means that instead of calculating actual adjusted abatement for that year, the method uses a default value of zero, meaning the proponent effectively gets no credits for that year for any sequestered carbon. Importantly, it does not set Aseq to 0, and therefore does not inaccurately detract from future year calculations of Aseq,adj, or calculations of the sequestration bank.

Clause 11 – Adjustments resulting from subdivided project areas

Clause 11 is relevant when a subdivided project area is first reported on, and provides for how the following amounts are calculated for the subdivided project area:

• the previous year’s carry‑over amount – see subclause 11(1) and equation 14; and
• the adjustment value for the previous year’s carbon stock from the original project area that is attributed to each subdivided project area – see subclause 11(2) and equation 15.

In both cases, the amount attributed to each subdivided project area is a proportion of the relevant amount for the original project area, where the proportion is equal to the ratio of the baseline carbon stock in the subdivided and original project areas.

Subclause 11(3) explains how the sequestration bank is reallocated when a project area is subdivided into two or more smaller project areas – see equation 16. The purpose of this rule is to ensure that the sequestration bank is apportioned fairly and transparently between the new subdivided areas, consistent with each area’s contribution to total baseline carbon stocks.

When a subdivision occurs, the sequestration bank from the previous calendar year for the original project area must be redistributed across the new subdivided areas. The method prescribed by the Schedule ensures that this redistribution is proportional to the baseline carbon stocks of the subdivided areas relative to the baseline carbon stock of the original project area.

Under this approach:

• The baseline carbon stock for each subdivided project area is used to determine that area’s share of the original sequestration bank.
• The baseline carbon stock of the original project area is used as the basis for determining the proportions.
• The previous year’s sequestration bank for the original area is then allocated between the subdivided areas in line with these proportional shares.

This ensures that each new subdivided project area inherits an appropriate and equitable portion of the sequestration bank that reflects its baseline characteristics. It also preserves the integrity of the sequestration accounting system by preventing artificial increases or decreases in total banked sequestration as a result of administrative boundary changes.

The reference to the value used in subsection (1) confirms that the term CB,Subdiv retains the meaning already established earlier in the Schedule.

Subclause 11(4) explains how the previous year’s release mechanism is to be considered when a project area is subdivided into two or more smaller project areas – see equation 17. The purpose of this rule is to ensure that the previous year’s value of the release mechanism, used to understand how much to adjust the current year’s sequestration bank figure, is apportioned fairly and transparently between the new subdivided areas, consistent with each area’s contribution to total baseline carbon stocks. The same approach is applied as for the sequestration bank distribution in subclause 11(3).

Clause 12 – Attribution of cumulative net abatement amount to a project area after subdivision.

Clause 12 sets out how cumulative net abatement is attributed to a project area where subdivision has occurred, and an entire subdivided project area if removed. These rules ensure the Regulator can understand how to apply relevant relinquishment powers. Importantly, this clause does not change the abatement calculations, but should be used to determine a quantity that must be reported in the offsets report.

First a proponent must sum all values of Aseq for the project area from the first year of the crediting period up to the current year with any required adjustments (ideally using reported values, although recalculations may be required if this is not possible). These values are then added together to produce the cumulative net abatement amount of sequestration Aseq,cumulative. See subclause 12(2) and equation 19.

To determine the cumulative net abatement amount for the subdivided project area, Acumulative in equation 18, that value of Aseq,cumulative is multiplied by the proportion of baseline carbon stock of the subdivided area compared to the baseline carbon stock of the earlier project area. This proportionally assigns only a certain amount of abatement of the previous original project area to the subdivided area. The abatement is then adjusted by the sequestration buffer to ensure that the cumulative net abatement amount for the subdivided project area Acumulative, only represents an indication of the actual credits that that project would be entitled to.

Subclause 12(3) – Definition of “earlier project area”

This subclause clarifies what is meant by an “earlier project area.” It includes:

• the original project area that was subdivided, and
• any previous project area that, through successive subdivisions, led to the creation of the current subdivided area.

This definition ensures that cumulative abatement is traced through the full lineage of project‑area changes, even where multiple subdivision events have occurred over the life of a project.

Clause 13 – Additional adjustments for transferring sequestration projects

Clause 13 sets out special accounting rules that apply when sequestration projects transfer from the 2018 Determination to the Determination.

Subclause 13(1) – Contribution to net abatement in the first reporting year

For a project transitioning from the 2018 Determination, the contribution to net abatement from sequestration for the first calendar year of the first reporting period is determined by applying a calculation that accounts for:

• the current year’s deemed net carbon stock,
• the project’s baseline carbon stock,
• total sequestration already credited under the 2018 Determination, and
• the value released from the sequestration bank for the current year.

Normally, the calculation of the contribution to the net abatement amount from sequestration for a calendar year (Aseq) is calculated in accordance with clause 4 and, in the first year, is equal to half the difference between the carbon stock at the end of that year and the mean average carbon stock of the project during its baseline plus any amount (R) released from the sequestration bank.

Equation 19 adjusts the calculation of Aseq for these projects for the first reporting year by recognising that some sequestration has already been credited under the previous determination. To avoid double counting, the total accumulated sequestration credited under the 2018 Determination (Dseq) is subtracted before applying the conservative proportion used in the new instrument.

Subclause 13(2) – Contribution to the sequestration bank in the first reporting year

In a similar way, the sequestration bank is also adjusted for these types of projects.

Similar to how the sequestration bank is established for other projects under clause 8 of this Schedule, half of the net increase in carbon stocks placed into the sequestration bank but only after deducting the sequestration already recognised under the 2018 Determination. Again, this aligns the starting bank value with the principles of this new method while ensuring that past credited sequestration is appropriately excluded.

Schedule 3—Revocations

Item 1

This item revokes the Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018.

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—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

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.

The Carbon Credits (Carbon Farming Initiative—Savanna Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2026 (the determination) sets out the method for estimating abatement from eligible savanna sequestration and emissions avoidance projects. The project activity will result in an increase in the amount of carbon sequestered in dead organic matter and living biomass and a net reduction of greenhouse gas emissions from savanna fires.

Project proponents wishing to implement the determination must make an application to the Clean Energy Regulator and meet the eligibility requirements set out under the determination. Offsets projects approved by the Clean Energy Regulator can generate Australian Carbon Credit Units, representing emissions reductions from the project.

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