Carbon Credits (Carbon Farming Initiative) Methodology (Facilities) Determination2014
I, Greg Hunt, Minister for the Environment, make the following determination.
Dated2014
Greg Hunt [DRAFT ONLY NOT FOR SIGNATURE]
Minister for the Environment
Contents
Part1—Preliminary
1Name
2Commencement
3Authority
4Duration
5Definitions
6Meaning of baseline period
7Meaning of ineligible emissions reduction measure
8Meaning of significant expansion
9Meaning of significant production variable change
10Meaning of material effect
Part2—Facilities projects
11Facilities projects
Part3—Project requirements
12Operation of this Part
13Project must implement measures that aim to reduce emissions from a facility
14Relevant production variables must be nominated
Part4—Net abatement amount
Division1—Preliminary
15Operation of this Part
Division2—Method for calculating net abatement amount
16Carbon dioxide equivalent net abatement amount
Division3—Method for calculating project emissions reduction
17Summary
18Timing of calculation
19Calculation of project emissions reduction
20Facility emissions reduction
21Adjusted emissions reduction
Division4—Method for calculating crediting baseline
22Summary
23Crediting baseline
Division5—Method for calculating baseline emissions intensity
Subdivision A—Baseline emissions intensity
24Summary
25Baseline emissions intensity and baseline year
Subdivision B—Calculations relating to emissions intensity
26Emissions intensity of a relevant production variable
27Baseline NGER emissions attributable to a relevant production variable
28Total baseline NGER emissions
29Apportioning of total baseline NGER emissions
Subdivision C—Recalculating emissions intensity
30Application of Subdivision
31Recalculating emissions intensity
32Recalculating because of a new factor
33Recalculating because of an input or output quality change
34Recalculating because of an error
Division6—Method for calculating NGER emissions
35Summary
36NGER emissions
Division7—Method for calculating electricity emissions reduction from a new CHP plant
37Summary
38Application of Division
39Electricity emissions reduction from CHP plants
40Emissions intensity of electricity generated
41Emissions apportioned to electricity generated by CHP plant
42Quantity of heat and cooling generated
43Efficiency of electricity, heat and cooling generation
44Emissions apportioned to electricity exported to an electricity grid
Part5—Reporting, record keeping and monitoring requirements
Division1—Offsets report requirements
Subdivision A—Requirements relating to timing
45Operation of this Subdivision
46Timing for final offsets report
Subdivision B—Other requirements
47Operation of this Subdivision
48Information that must be included in an offsets report for nonNGER reporting facilities
Division2—Notification requirements
49Operation of this Division
50Notification requirements
Division3—Monitoring requirements
51Operation of this Division
52Requirement to monitor operation of facilities
Part6—Dividing a facilities project
53Operation of this Part
54Requirements for division of project
Schedule1—Industry average emissions intensities
1Industry average emissions intensities
Carbon Credits (Carbon Farming Initiative) Methodology (Facilities) Determination2014 / 1Reporting, record keeping and monitoring requirements Part5
Monitoring requirements Division3
Section51
Part1—Preliminary
1 Name
This is the Carbon Credits (Carbon Farming Initiative) Methodology (Facilities) Determination 2014.
2 Commencement
This determination commences on the day after it is registered.
3 Authority
This determination is made under subsection106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011.
4 Duration
This determination remains in force for the period that:
(a)begins when this determination commences; and
(b)ends on the day before this determination would otherwise be repealed under subsection50(1) of the Legislative Instruments Act 2003.
5 Definitions
In this determination:
Act means the Carbon Credits (Carbon Farming Initiative) Act 2011.
appropriate emissions reduction estimation approach has the meaning given by subsection21(3).
baseline period, for a facilities project, has the meaning given by section6.
baseline year, for a facility’s relevant production variables, means the baseline year worked out in accordance with Division5 of Part4.
Note:The baseline year worked out in accordance with that Division will be the same year for each of the facility’s relevant production variables.
byproduct means an output that:
(a)results from a chemical or physical process undertaken by a facility other than for the purpose of producing the output; and
(b)will be sold without any further processing by the facility (other than in accordance with standard industry practice).
calculation year has the meaning given by subsection30(1).
combined heat and power plant or CHP plant means a combined heat and power plant that:
(a)generates electricity; and
(b)uses the waste heat resulting from that generation of electricity for heating or cooling or both heating and cooling.
declaration day, for a facilities project, means the day the project is declared to be an eligible offsets project.
default emissions factor means a default emissions factor specified in the NGER (Measurement) Determination.
default energy content factor means a default energy content factor specified in the NGER (Measurement) Determination.
excluded NGER fugitive emissions means fugitive emissions to which any ofthe following provisions of the NGER (Measurement) Determination apply:
(a)Part3.2 (fugitive emissions from coal mining);
(b)Division3.3.2 (fugitive emissions from venting or flaring from oil or gas exploration activities);
(c)Subdivision3.3.3.3 (fugitive emissions from crude oil production (flared));
(d)Subdivision3.3.3.4 (fugitive emissions from crude oil production (nonflared));
(e)Subdivision3.3.5.2 (fugitive emissions from deliberate releases from process vents, system upsets and accidents during crude oil refining activities);
(f)Subdivision3.3.5.3 (fugitive emissions released from gas flared from oil refineries);
(g)Division3.3.9 (fugitive emission from venting or flaring from natural gas production or processing activities);
(h)Part3.4 (fugitive emissions from the transport of captured carbon dioxide).
facilities project has the meaning given by subsection11(2).
facilityhas the same meaning as in the NGER Act.
facility site means a site at which an activity that is part of a facility is undertaken.
facilityspecific apportioning metric has the meaning given by subsection29(5).
Global Warming Potential means a Global Warming Potential for a greenhouse gas, mentioned in regulation2.02 of the NGER Regulations.
ineligible emissions reduction measure has the meaning given by section7.
input means anything that undergoes a chemical or physical process to producean intermediate product or an output.
input or output quality change has the meaning given by subsection30(3).
input purity means the percentage of the total quantity of an input that represents the key substance of value in the output produced from the processing of the input.
intermediate product means a product that:
(a)results from a chemical or physical process undertaken by a facility using one or more inputs; and
(b)is then used as an input for the production of an output at the same facility.
Jobs and Competitiveness Program means the Jobs and Competitiveness Program that was in force under the Clean Energy Act 2011 immediately before the repeal of that Act by item1 of Schedule1 to the Clean Energy Legislation (Carbon Tax Repeal) Act 2014.
major change: a major change occurs at a facility if:
(a)the facility experiences a rampup; or
(b)a plant shutdown occurs at the facility; or
(c)a major maintenance activity is undertaken at the facility; or
(d)the facility undergoes a significant expansion; or
(e)the facility undergoes a significant production variable change.
major maintenance activity means a maintenance activityundertaken at a facility during an NGER reporting year (the maintenance year) that results in a change of 10% or more in the emissions intensity of a production variable for the facility for the maintenance year when compared with the emissions intensity of the variable for:
(a)the NGER reporting year that immediately precedes the maintenance year; or
(b)the NGER reporting year that immediately follows the maintenance year.
material effect has the meaning given by section10.
materially similar has the meaning given by subsection14(5).
new CHP plant has the meaning given by subsection38(2).
new factor has the meaning given by subsection30(2).
NGA Factors document means the document entitled “National Greenhouse Accounts Factors”, published by the Department and as in force from time to time.
NGER Act means the National Greenhouse and Energy Reporting Act 2007.
NGER facility level emissions data, for a facility, means data about the greenhouse gas emissions from the facility that is included in an NGER report about the operations of the facility.
NGER (Measurement) Determination means the National Greenhouse and Energy Reporting (Measurement) Determination2008.
NGER measurement method means a method specified in the NGER (Measurement) Determination and referred to in that determination as method 1, method 2, method 3 or method 4.
NGER Regulations means the National Greenhouse and Energy Reporting Regulations2008.
NGER report means a report about the operations of a facility that is required to be provided to the Regulator under section19, 22G or 22X of the NGER Act.
NGER reporting year means a financial year.
output means a product that is the last product resulting from a chemical or physical process undertaken by a facility using one or more inputs or intermediate products.
output purity means the percentage of the total quantity of an output that represents the key substance of value in the output.
plant shutdown: a plant shutdown occurs at a facility if, during an NGER reporting year (the shutdown year), all or part of a facilityis not in operation for a period and not operating for that periodresults in a change of 10% or more in the emissions intensity of a production variable for the facility for the shutdown year when compared with the emissions intensity of the variable for:
(a)the NGER reporting year that immediately precedes the shutdown year; or
(b)the NGER reporting year that immediately follows the shutdown year.
production variable: a product that is produced or processed by a facility is a production variable for the facility if:
(a)the product is the last saleable output from a chemical or physical process undertaken by the facility; and
(b)a change to the quantity of the product produced by the facility would result in a change to the quantity of greenhouse gas emissions from the facility; and
(c)the quantity of the product can be expressed in a unit of measurement that complies with the National Measurement Act 1960; and
(d)the product is not an intermediate product, a byproduct or a waste product.
production variable data, for a facility, means data about the amount of each production variable produced or processed by the facility.
rampup: a facility experiences a rampup when production at the facility reaches 50% of the facility’s productive capacity for the first time.
relevant production variable, for a facility, means a relevant production variable nominated for the facility in accordance with section14.
reported electricity imports, for a facility during an NGER reporting year,means the quantity of purchased electricity that was consumed by the facility during the NGER reporting year, as reported to the Regulator:
(a)in an NGER report; or
(b)in an offsets report in accordance with section48.
reported scope 1 emissions, for a facility during an NGER reporting year, means the quantity of scope 1 emissions from the facility during the NGER reporting year, as reported to the Regulator:
(a)in an NGER report; or
(b)in an offsets report in accordance with section48.
scope 1 emission has the same meaning as in the NGER Act.
significant expansion has the meaning given by section8.
significant production variable change has the meaning given by section9.
transport facility has the same meaning as in the NGER Regulations.
waste product means an output that:
(a)results from a chemical or physical process undertaken by a facility other than for the purpose of producing the output; and
(b)will be disposed of without any further processing by the facility (other than in accordance with standard industry practice).
6 Meaning of baseline period
(1)Subject to subsections(2) and (3), the baseline period for a facilities project is the period that consists of the 4 consecutive NGER reporting years preceding the start of the project.
(2)If, during the earliest 2 of the 4 consecutive NGER reporting years mentioned in subsection(1), a facility to which the project relates undergoes one or more major changes,the baseline period for the project is the period that consists of:
(a)if the last major change occurs in the earliest of those 4 consecutive NGER reporting years—the 3 consecutive NGER reporting years preceding the start of the project; or
(b)otherwise—the 2 consecutive NGER reporting years preceding the start of the project.
Note:If a facility to which a facility project relates undergoes a major change in the 2 consecutive NGER reporting years preceding the start of the project, the project does not meet the requirements to be an eligible offsets project under Part3 of this determination (see subsection13(2)).
(3)If the project proponent for the project does not have access toNGER facility level emissions data,and production variable data, for each facility to which the project relates for either or both of the earliest 2 of the 4 consecutive NGER reporting years mentioned in subsection(1), the baseline period for the project is the period that consists of:
(a)if the project proponent does not have access to that data for the earliest of those 4 consecutive NGER reporting years—the 3 consecutive NGER reporting years preceding the start of the project; or
(b)otherwise—the 2 consecutive NGER reporting years preceding the start of the project.
Note:If the project proponent does not have access to NGER facility level emissions data, and production variable data, for each facility to which the project relates for the 2 consecutive NGER reporting years preceding the start of the project, the project does not meet the requirements to be an eligible offsets project under Part3 of this determination (see subsection13(2)).
7 Meaning of ineligible emissions reduction measure
(1)An emissions reduction measure that is in operation at a facility to which a facilities project relates is an ineligible emissions reduction measure for the project if:
(a)the measure is ineligible for the project under subsection(2), (3) or (4); and
(b)the measure was not in operation at the facility during the whole of the year that is the baseline year for the facility’s relevant production variables.
(2)An emissions reduction measure is ineligible for the project under this subsection if the measure is being implemented at the facility as part of another offsets project that is an eligible offsets project.
(3)An emissions reduction measure is ineligible for the project under this subsection if:
(a)were the measure to be implemented as a separate offsets project, the measure:
(i)would not meet the additionality requirements set out in subsection27(4A) of the Act; or
(ii)would be an excluded offsets project; or
(iii)would be a project covered by the Carbon Credits (Carbon Farming Initiative) Methodology (Landfill Gas) Determination2014; and
(b)the operation of the measure at the facility, on its own or in combination with one or more measures of a kind mentioned in this subsection or subsection(4), has a material effect on the project emissions reduction of the project for an NGER reporting year during which the measure is in operation.
(4)An emissions reduction measure is ineligible for the project under this subsection if:
(a)the measure directly increases emissionsoutside the boundary of the facility; and
(b)were the measure to cause the same increase in emissions inside the boundary of the facility, the measure would, on its own or in combination with one or more measures of a kind mentioned in this subsection or subsection(3), have a material effect on the project emissions reduction of the project for an NGER reporting year during which the measure is in operation; and
(c)the measure is not an input or output quality change.
8 Meaning of significant expansion
(1)Subject to subsection(2), a facility to which a facilities project relates undergoes a significant expansion during an NGER reporting year if:
(a)new equipment is installed and used by the facility during the NGER reporting year; and
(b)emissions associated with the new equipment have not been included in any NGER reports for the facility provided to the Regulator before the installation of the equipment; and
(c)as a result of the operation of the new equipment, the maximum productive capacity of all equipment used to produce or process the facility’s production variablesis 20% greater than the maximum productive capacity of the equipment that was used before the new equipment was installed.
(2)A facility does not undergo a significant expansionifthe new equipment is anew CHP plant.
(3)In working out the maximum productive capacity of the equipment that was used before the new equipment was installed, the productive capacity of decommissioned equipment that exists at the facility site is not to be included if the decommissioned equipment:
(a)has not beenused to produce or process the facility’s production variables after the new equipment was installed; and
(b)will not be used to produce or process the facility’s production variablesfor at least 12 months after the end of the NGER reporting year during which the new equipment was installed.
9 Meaning of significant production variable change
Significant production variable change in the baseline period
(1)A facility to which a facilities project relates undergoes a significant production variable change during an NGER reporting year (the change year) in the project’s baseline period if:
(a)during the change year the facility starts to produce or process a production variable (the new variable) not produced or processed by the facility during a previous NGER reporting year in the baseline period; and
(b)the change results in a 5% or more difference to the emissions from the facility for the change year when compared with the emissions from the facility for the NGER reporting year that immediately precedes the change year; and
(c)the project proponent cannot nominate the new variable and one or more of the facility’s other production variables to be a single relevant production variable for the facility under subsection14(2).
Significant production variable change in a reporting period
(2)Subject to subsection(3), a facility to which a facilities project relates undergoes a significant production variable change during an NGER reporting year in a reporting period for the project if:
(a)during the NGER reporting year the facility starts to produce or process a production variable (the new variable) not produced or processed by the facility during the project’s baseline period; and
(b)the change has a material effect on the project emissions reduction of the project for the NGER reporting year; and
(c)the project proponent cannot nominate the new variable and one or more of the facility’s other production variables to be a single relevant production variable under subsection14(2).