5.3. Establishing an ACCU Scheme project

The project proponent is the person, multiple people or entity responsible for the carbon farming project. The project proponent:

• must plan and manage the project according to the method specified in law for that type of project
• must have the legal right to carry out the project
• must be a fit and proper person
• must meet the obligations set out in the Carbon Credits (Carbon Farming Initiative) Act 2011 for the life of the project, including record-keeping, reporting, audit and notification requirements (such as the need to notify the Clean Energy Regulator of any changes to the project or project participants)
• must maintain carbon stores throughout the permanence period (for projects that store carbon)
• will be issued with the ACCUs for the project. If there are multiple proponents, they can choose to appoint a nominee to act on their behalf and who can have the ACCUs issued to their account.

The Clean Energy Regulator’s Choose a project proponent webpage provides more information.

Proponents that want to make changes to their project must also follow the Clean Energy Regulator’s requirements in Making changes to your project. Changes that may be allowed include:

• varying the project area
• varying any conditions that may have been applied to the project when it was registered
• varying the project proponent
• varying the project’s crediting period start date
• varying the project method
• dividing the project into parts for separate reporting
• revoking (withdrawing) the project.

Revoked projects can no longer be issued ACCUs. There are particular obligations for revoked carbon storage projects, including a requirement to return all ACCUs issued if the carbon has been stored for less than the permanence period.

Some farmers and land managers decide to be the project proponent for a project on their land. They consider they know enough about the ACCU Scheme’s requirements and can draw on support from others who have successfully run projects.

Other farmers and land managers decide they need support developing an ACCU Scheme project, usually from a carbon service provider or consultant. A carbon service provider (CSP), also known as a carbon project developer, is a business offering services to farmers and land managers in relation to carbon farming projects.

Different CSPs have different business models. Some CSPs will only provide services if they are also the project proponent. A Clean Energy Regulator fact sheet (PDF 211 KB) sets out its minimum performance expectations for project proponents who are CSPs. With other CSPs, the farmer or land manager is the project proponent, and the CSP provides them with services. CSPs may charge fees or take a proportion of the income from the sale of ACCUs.

In all cases, it is the farmer or land manager as the legal right holder that chooses to be the proponent or assigns that role to another entity.

The roles and decision-making responsibilities of the farmer or land manager and the CSP are agreed between them. The farmer or land manager needs to be well-informed when agreeing about who will be responsible for what, and they should get independent advice and talk with several CSPs if they feel it necessary.

If they are the project proponent, a CSP typically controls project development and management and the sale of ACCUs. They also handle all administrative and technical aspects of the project.

In considering whether to engage a CSP, you might consider whether they are a signatory to the Australian Carbon Industry Code of Conduct, which Topic 4 explains. The Carbon Market Institute’s Example Contract Clauses and guidance can assist in understanding what is involved in entering into an agreement with a CSP, where either the CSP or the farmer or land manager will be the project proponent.

AgriFutures’ A farmer’s handbook to on-farm carbon management (PDF 7.4 MB) provides more information about ways to manage your carbon farming project, including working with CSPs.

If you are considering doing an ACCU Scheme project, you should get legal and financial advice. You may also need other advice (such as about technical matters). As ACCUs are financial products, anyone providing financial advice about ACCUs is required by law to have an Australian financial services licence.

Legal right

To conduct a project, the proponent must first confirm they have the legal right to do so. This includes the right to carry out the project activities on the site and the right to be issued all ACCUs the project earns. This step commonly involves identifying all stakeholders affected by the project (such as lessees and Native Title holders) and determining if they have legal rights to be satisfied before the project can proceed. First Nations organisations are estimated to have a legal right — a shared legal right in some instances — to undertake a carbon project over about 27% of Australia. 

The processes for securing legal right will differ depending on the individual circumstances of each project, including which State or Territory it is in. Establishing legal right will generally involve establishing who has a legal interest in the land where the project will be carried out and whether that interest confers a right to undertake project activities. 

Eligible interest holder consents

Proponents must then identify all eligible interest holders in the land where the project is to be carried out and obtain their consent, which may take some time to organise. Eligible interest holders may include: 

• landholders
• banks or mortgagees
• state and territory Crown Lands Minister
• registered native title body corporate. 

First Nations organisations are eligible interest holders for an estimated 28% of Australia. Adding together their legal and eligible interest holder rights, First Nations’ interests cover some 55% of Australia. With respect to First Nations eligible interest holders, the principle of Free, Prior and Informed Consent (FPIC) should be understood and considered. FPIC is an important international principle that applies to First Nations peoples, enabling them to give or withhold consent to projects that may affect their lands and resources. FPIC helps ensure proponents develop ACCU Scheme projects in a way that respects the wishes of First Nations eligible interest holders.

Relevant resources when seeking the consent of eligible interest holders include:

• the Clean Energy Regulator’s Native title, legal right and eligible interest-holder consent guidance (PDF 2.3 MB), which helps project proponents navigate this step and provides guidance about native title and legal right issues
• the Indigenous Carbon Industry Network Indigenous Carbon Projects Guide (PDF 8.5 MB), which explains FPIC and includes a 9-step engagement process
• Native Title Vision, a free online tool by the National Native Title Tribunal that provides a map with details of native title matters.

The process of registering a project with the Clean Energy Regulator includes:

• opening an account through the Clean Energy Regulator’s Online systems webpage and obtaining access to the Clean Energy Regulator’s Online Services platform
• establishing the proponent’s legal right to conduct the project
• completing a scheme enrolment form, establishing the identity of the project proponents and that they meet the fit and proper person test
• opening an ANREU account so the project proponent can be issued ACCUs. The ANREU is a secure system that tracks the ownership of ACCUs
• completing an application to register a project under the appropriate method.

At registration, the proponent must also provide a forward abatement estimate of the total amount of GHG emissions it will avoid or carbon it will store in tonnes of CO₂-e over its crediting period. The crediting period is the length of time projects can earn ACCUs. Emissions avoidance methods generally have a 7-year crediting period, and carbon storage methods have a 25-year crediting period. The Clean Energy Regulator uses the forward abatement estimate to set the project’s audit schedule.

The ACCU Scheme projects map provides an overview of all scheme projects. The map is a way of discovering carbon farming projects around Australia.

The Indigenous Carbon Industry Network (ICIN) has an Industry Snapshot on its website that lists the 34 member organisations of the network. It also has links to each member and shows how Indigenous people across Australia are reducing Australia’s GHG emissions by caring for their Country.

ICIN’s Indigenous Carbon Projects Guide (PDF 8.5 MB) is a comprehensive guide to the carbon industry for First Nations people. It covers the carbon market, ACCU Scheme project requirements and planning and running a carbon project. It also has information specific to First Nations people, including Indigenous rights and interests, co-benefits and the power of story.