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emission reduction fund


ll up, $2.55 billion has

new source separation activities or the

• place bids at an auction for projects

been allocated to the

expansion of an existing activity involving

that are still in development, allowing

Australian Government’s

organic waste only. For example, diverting

councils and organisations the flexibility

Emission Reduction Fund

food waste from landfill through undertaking

of only proceeding with projects where

(ERF) as an incentive

activities such as composting or donating

they have a carbon abatement contract

for organisations to un-

excess food waste to charity are poten-

in place.

dertake various greenhouse gas abatement

tially eligible. Potential proponents for this

To actually generate ACCUs, you sub-

projects. During the first ERF auction held in

method include councils, waste management

mit an offsets report to the Clean Energy

April 2015, the Carbon Abatement Contracts

companies, hospitals, academic institutions,

Regulator setting out all the calculations

were granted to 43 contractors covering 144

hotels and food charities.

and evidence to support your claims of

projects with the Clean Energy Regulator

greenhouse gas reductions. Offsets re-

What’s involved in setting up and running an ERF project?

ports are subject to external audit and

to deliver a total of 47,333,140 tonnes of abatement. The total value of contracts

The starting point is to confirm that your

scale — the bigger the project, the more

awarded was more than $660 million with

proposed development, activity or expansion

recurrent the audits.

an average price of $13.95 per ACCU. The

is actually eligible against the methodology.

second auction will be taking place in

You will also need to take a good look at the

The role of ‘Specialist Agents’

November 2015.

business case for participating, as operating

Big money can be made from the ERF but

If you want to get involved, one of the

a project under ERF can incur costs in the

complex rules and technical detail can

key requirements will be to demonstrate

form of administration, record keeping and

deter many. The good news is that there

that you are undertaking a greenhouse

audit fees. Most importantly, the business

are a number of specialist companies that

emissions-reducing activity that complies

case is strongly linked to scale. “If you

can assist.

with an approved ERF methodology. There

are not diverting at least 1000 tonnes of

ERF ‘agents’ can: handle eligibility as-

are several methodologies available that

organics from landfill per year, then it’s not

sessments, help with reviewing the business

relate to waste management, including cap-

going to be commercially viable to set up

case, set up projects and even manage the

turing methane from landfills and diverting

an ERF project,” said Bulinski.

ongoing compliance requirements. CO2

awarding 107 Carbon Abatement Contracts

the frequency of the audit depends on the

waste to compost or biodigester systems.

When you have made a decision to

Australia is one example of a company that

Recently, a draft method was released for

participate, the next big step is to submit a

specialises in establishing and operating

public consultation that focuses on source

project registration application to the Clean

ERF projects.

separated waste.

Energy Regulator. It is critically important

“We take the headache out of getting

“People are often surprised to hear

that your application is submitted before

involved in the ERF by partnering on pro-

government is paying big money for some

you actually start installing, upgrading or

ject development,” Bulinski said. “We take

of these activities,” said James Bulinski,

expanding your facilities otherwise you

on some of the risk through investing our

director of CO2 Australia, a company that

might be excluded from participating. So, it’s

time and expertise up front and then sharing

specialises in developing ERF projects. “The

important you get the paperwork in early.

in the revenue when we get a successful

key thing is to consider your options before

Once your project is registered, you can

undertaking new developments, so you aren’t

then place a bid at an ERF auction. These

Working with experienced agents can

leaving money on the table.”

bids are actually a type of forward supply

fast-track the process of participation for

contract, where you commit to delivering

an ERF project and get it to the point of

What opportunities will the ‘source separated’ waste method open?

ACCUs to the government at agreed times

realising revenue quickly.

future revenue stream, but it also locks you

The future looks bright

Simply put, source separation is sorting

into an obligation to deliver. This implies to

With $1.89 billion remaining in the Emis-

waste at the time it’s generated, such as

the fact that you need to be confident that

sion Reduction Fund, there remains plenty

through segregating and placing general

you can deliver the committed number of

of opportunity to get involved and get new

waste and organic waste in separate bins.

ACCUs stipulated in your contract.

projects off the ground. The developing

The separated organic waste can then be sent to a treatment facility for processing thus diverting it from the landfill for disposal and avoiding emissions from waste. The crucial thing to remember in regards to this methodology is that it applies to

result at the ERF auction.”

and at an agreed price. This locks in a steady

Key advantages of the auction process are that you are able to: • structure carbon abatement contracts

‘Source Separated Waste’ method has the potential to open up the ERF to new waste management initiatives.

with the government in a way that allows for ‘locked-in’ revenue for up to

CO2 Australia Limited

10 years; and

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Sustainability Matters Feb/Mar 2016  

Sustainability Matters is a bi-monthly magazine showcasing the latest products, technology and sustainable solutions for industry, governmen...

Sustainability Matters Feb/Mar 2016  

Sustainability Matters is a bi-monthly magazine showcasing the latest products, technology and sustainable solutions for industry, governmen...