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22 November 2021
Clean Energy Regulator GPO Box 621
Canberra ACT 2601
Email: methoddevelopment@cer.gov.au
To Whom it May Concern
Forico Pty Limited (Forico) appreciates the opportunity to provide feedback to the Clean Energy Regulator regarding the Draft Plantation Forestry Methodology. Forico supports the proactive co- design process and the clear intent to advance the opportunities to expand the plantation forest sectors participation in carbon abatement.
Forico provides feedback relating to the following consultation documents:
Draft Carbon Credits (Carbon Farming Initiative – Plantation Forestry) Methodology Determination.
Draft Simple Method Guide for the Carbon Credits (Carbon Farming Initiative – Plantation Forestry) Methodology Determination.
Draft forest management plan guidance.
Draft financial assessment guidance.
Permanence Period
The existing 25 year Permanence Period under the current Plantation Methodology prescribes a permanence discount of 20%, plus a 5% risk of reversal buffer – resulting in a total discount of 25%.
Within the Plantation Methodology Determination 2021 - short rotation plantations under Schedule 1, or short or long rotation plantations under Schedule 3, the permanence discount increases to 25%, the risk of reversal buffer is retained at 5% - resulting in a total discount of 30%.
The explanation in the Simple Method Guide (Page 18) does not adequately justify the increased permanence discount. If the permanence period is 25 years at a minimum for any project, then the risk as stated (page 18) for Schedule 1 and Schedule 3 projects is the same as the risk for Schedule 2 projects:
that short rotation plantations may not replant after the end of the 25-year permanence and the projects could have been over-credited as a result. As eligibility for Schedule 3 is underpinned by evidence that the plantation is otherwise at risk of conversion to non-forest land (if not for participating in the scheme).
Recommendation: Maintain the ‘Permanence discount’ for Schedule 1, 2, or 3 Projects at 20%, resulting in a Total discount of 25% irrespective of the Schedule.
Management Regimes
Division 3.5 22 (7) (c) (ii) Page 22 of the Plantation Methodology Determination 2021 states that at least 80% of trees survived the initial planting. To apply this principle, it is important to prescribe what is an acceptable threshold for a low, medium or high stocking for a plantation within the Plantation Methodology guidance documentation.
Recommendation: The Plantation Methodology needs to be clarified to effectively communicate what is an acceptable plantation stocking threshold. Suggestion of acceptable stocking values:
Low stocking < 500 stems per hectare;
Medium stocking 500 – 1000 stems per hectare;
High stocking >1000 stems per hectare.
Short Rotation and Long Rotation Species
In relation to the species listed in Schedule 6:
The omission of Pinus radiata as a plantation species in Part 2 (presumed to have a long rotation) in Tasmania is surprising.
Eucalyptus nitens, Eucalyptus globulus and Pinus radiata are species listed in Part 3 (Commercial species list) – or UR species. Of concern is that the default clearfall age for the two eucalypt species short rotation is 12 years. Throughout Tasmania, the plantation clearfall age is highly variable and will result in a significant impact and restrictions on plantation eligibility for Schedule 2 or Schedule 3 opportunities.
To avoid incentivising the clearing of immature plantations, the Plantation Methodology Determination 2021 prescribes that plantations must be harvested within 24 months of (or older than) the default clearfall age for the species in that region. This statement is somewhat confusing. If the default short rotation clearfall age is 12 years for Eucalyptus nitens or globulus, is the assumption that:
these plantations cannot be harvested any earlier than 10 years of age but there is no upper limit for the clearfall age for a short rotation Eucalyptus nitens or globulus plantation; or
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does this statement imply that the Eucalyptus nitens and Eucalyptus globulus
plantations must be harvested between the ages of 10 – 14 years.
Recommendation: Clarification required within the Plantation Methodology Schedule 6 to define the evidence requirements.
Include Pinus radiata as an eligible Part 2 species in Schedule 6;
Update the ‘Default clearfall age – short rotation’ for Eucalyptus globulus and
Eucalyptus nitens to 15 years in Part 3 of Schedule 6.
Clearly articulate that there is no upper limit of clearfall age of short rotation species.
The range qualification of a potential Part 3 species should be extended from a 50 kilometre radius to represent the whole of a National Plantation Inventory (NPI) region.
Registered Forestry Professional
The Simple Method Guide contains a Footnote (on Page 26):
27 A Registered Forestry Professional must be currently registered under the Forestry Australia’s RFP scheme. Forest Practices Officers certified under that Forest Practices Code in Tasmania are also considered to be an RFP.
This expanded definition of a Registered Forestry Professional (RFP) needs to be included in all related documentation associated with the Plantation Methodology to ensure a consistent application of the framework. The definition above would need to be specifically incorporated in Section 5 – Definitions of the Plantation Methodology Determination 2021.
There is an expectation that an independent RFP is engaged to undertake assessment of identified projects. The integrity, credibility, ethics and professionalism of the Registered Professional Foresters system ensures that, whether an internally employed or an external independent RFP, diligence will be applied to deliver the high standards and governance of the program. Forico (as well as other Australian Forest Managers) maintains an internal pool of qualified Foresters - some are RFP’s. To engage an independent Registered Forestry Professional will incur additional expenditure that forest managers have the internal capacity to deliver.
Recommendation: ‘Independent Registered Forestry Professional’ should be defined in the Plantation Methodology as:
Registered Forestry Professionals governed through Forestry Australia;
Appropriately Qualified Forestry Valuers who are also qualified as RFP’s;
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Tasmanian Forest Practice Officers trained and authorised by the Forest Practices Authority and employed within the Tasmanian forest industry; and
A RFP does not need to act independently of the Forest Manager. They can be a direct employee of the business, or an external service provider.
Forest Management Plans
In the Draft forest management plan guidance there is an expectation that a comprehensive and detailed Forest Management Plan (FMP) needs to be submitted with the registration application and with each subsequent crediting application.
There will be occasions whereby scheduled operational activities will be delayed or brought forward due to financial, environmental or social reasons. For example, a change in scheduled thinning or weed control activities may have a negligible impact on ACCU generation. Apparently the current Emission Reduction Fund auditing process has a materiality clause that allows for an Auditor to make a 5% adjustment for abatement.
As currently written in the Plantation Methodology Determination 2021, there is an expectation to submit these adjusted operational changes as part of the FMP process within 9 months of the operational activity being completed. This is a very prescriptive requirement and will be an administrative burden for both a Forest Manager, but also the Clean Energy Regulator.
Recommendation: The Plantation Methodology should not become too prescriptive to deter participants from registering projects through generating an increase in administrative complexity.
The Forest Management Plan should be submitted as part of the existing annual Carbon Offset Reporting cycle, where a summary of modifications or changes in plantation management regimes or prescriptions is submitted.
The Water Rule
The Carbon Farming Initiative Sub regulation 3.37 (4A) (2011) has been updated to align with approved regional forestry hubs to include new areas: https://www.industry.gov.au/sites/default/files/2020-07/plantation-forestry-specified-regions-for- subregulation-3-37-4a.pdf
Recommendation: The Plantation Methodology needs to account for the latest data or mapping that has been legislated by the Commonwealth to provide clarity for proponents during the registration process.
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To conclude, implementing a framework that is too prescriptive, in an attempt to address all the potential scenarios of a forest plantation project, has the capacity to make the process of compliance with the Plantation Methodology Determination 2021 a deterrent to participate. This will relate directly to an increased cost of compliance.
Please contact Simon Cook, Sustainability Manager on 0428 349 056 or via email simon.cook@forico.com.au for further clarification or discussion.
Regards
Simon Cook Sustainability Manager
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