Important amendments are also proposed to the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) by the Amending legislation. The CFI Act currently provides that it is only possible to backdate projects and generate credits from abatement or sequestration achieved since 1 July 2010, if the methodology determination is made before 30 June 2012.2 To date, no methodology determinations have been made and therefore under the current requirements of the CFI Act, no projects could be backdated. The Amending legislation will amend the CFI Act to provide that projects can be backdated, if the methodology determination is made by 30 July 2013, provided that the application for approval of the methodology is submitted to the Domestic Offsets Integrity Committee by 30 June 2012.
The Amending legislation also clarifies that a CFI project cannot receive credits until it has received all necessary project approvals (e.g planning or environmental approvals).
In our last update, we provided an overview of draft exposure amending Regulations. These regulations have now been made with only two significant differences. First, it has been made clear that emissions abatement or carbon sequestration from transitional projects (ie GGAS or Greenhouse Friendly projects) can be credited post 1 July 2012, notwithstanding if that abatement or sequestration has been forward sold. Secondly, one new project type has been added to the ‘positive list’, namely diversion of legacy waste to an alternative waste treatment facility.
2The methodology determination is essentially the rules which govern a CFI project, and provide details of how emissions reduction/abatement or carbon sequestration must be estimated or measured.