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30 September 2022
ACCU Review Secretariat
Department of Climate Change, Energy, the Environment and Water
GPO Box 3090
Canberra ACT 2601
Submitted by email: ACCUReview@dcceew.gov.au
Independent Review of Australian Carbon Credit Units – Consultation Paper
Origin Energy Limited (Origin) welcomes the opportunity to provide comments on the Department of
Climate Change, Energy, the Environment and Water’s (DCCEEW) Independent Review of Australian
Carbon Credit Units (ACCUs) Consultation Paper.
Origin supports the intent of the review, which is to ensure ACCUs and the carbon crediting framework maintain a strong and credible reputation supported by participants, purchasers and the broader community. ACCUs have an important role to play in offsetting emissions from hard to abate industries and supporting achievement of voluntary emissions reductions targets. The pending requirement that
Climate Active certification will only be provided where a minimum 20 per cent of ACCUs have been used to offset emissions also highlights the value of ACCUs in achieving carbon neutral certification.
Ensuring the ongoing integrity of ACCUs and the associated Emissions Reduction Fund (ERF) framework is therefore paramount.
We have broad experience using ACCUs and generally consider existing arrangements for generating and trading those credits to be effective. However, there are aspects of the current framework that could be improved to facilitate increased participation in the scheme and more informed trading and use of
ACCUs. These include: addressing identified issues within the ERF project registration process that can impede access for new projects, such as the requirement to provide three years of historical data; recognising the co-benefits associated with ERF projects as part of the registration / assessment process; and generally improving transparency and accessibility of information on ERF methods and
ACCUs (including their co-benefits).
Further views on these issues and other specific questions raised in the Consultation Paper are provided in Attachment 1. If you wish to discuss any aspect of this submission further, please contact Shaun Cole at shaun.cole@originenergy.com.au or on 03 8665 7366.
Yours Sincerely,
Steve Reid
General Manager, Regulatory Policy
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Origin Energy Limited ABN 30 000 051 696 • Level 32, Tower 1, 100 Barangaroo Avenue, Barangaroo NSW 2000
GPO Box 5376, Barangaroo NSW 2000 • Telephone (02) 8345 5000 • Facsimile (02) 9252 9244 • www.originenergy.com.au
Attachment 1
Questions Response
Experience with the ERF scheme
1. Are you able to get sufficient It would be beneficial to provide greater transparency around the co-
information about the scheme, benefits of ERF projects in the Australian National Registry of Emissions
its purpose and application? Units (ANREU), given co-benefits are increasingly being factored into
corporations’ valuation of ACCUs generated from different activities; and
outlining the co-benefits of ACCU’s is mandatory where they are used in a
Climate Active certification claim. This would also allow for more informed
comparison of ACCUs and international offsets, given all international
projects specify co-benefits.
2. What is the result of your Origin has identified aspects of the ERF registration process that we
participation in the scheme? consider could be improved to facilitate greater participation of new projects
What has worked well? What in the scheme.
has not worked well? 1. Provision of historical data
The requirement to provide three years of historical data can act as a
barrier to participation for new projects, particularly in circumstances where
emissions reductions would be achieved through fuel / technology
switching (e.g. a new facility is being designed to operate on a less
emissive fuel source / equipment). This is because actual historical
performance information would be unavailable, and it may be impractical
(both from an economic and environmental perspective) to operate the
facility for a three year period using the more emissive fuel source to
develop the required baseline prior to switching. To address this,
consideration should be given to developing alternative methodologies for
new facilities / equipment to establish a representative baseline in lieu of
historical data.
2. Forward abatement estimates
Consistent with the above, it can also be challenging for new projects to
provide an estimate of ACCU volumes expected to be generated from a
project at the time of registration in the absence of defined baselines and
further analysis / testing of expected facility / equipment performance. This
could be addressed by providing flexibility for the forward abatement
estimates to be provided at a later stage of the application assessment
process.
3. Accounting for other efficiencies relating to a project
The current methodology for assessing ERF project activities does not
capture indirect emissions abatement that could potentially be achieved.
Consideration should be given to recognising such benefits in any future
evolution of the scheme.
4. 90 day processing timeline
While it is prudent to ensure the Clean Energy Regulator (CER) is provided
with sufficient time to adequately assess proposed projects, it is not clear
the current 90-day allowance for processing applications, and any
subsequent responses to information requests, provides for timely
registration and development of ERF projects. Consideration should be
given to at least providing shorter turnaround times for subsequent
information requests to minimise project delays.
5. Online project registration portal
We recommend the portal functionality is updated to allow participants who
are awaiting a Fit and Proper Person assessment review to concurrently
work on draft application forms required to prepare a project for
registration. This will further assist with facilitating a more efficient
application process.
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Origin Energy Limited ABN 30 000 051 696 • Level 32, Tower 1, 100 Barangaroo Avenue, Barangaroo NSW 2000
GPO Box 5376, Barangaroo NSW 2000 • Telephone (02) 8345 5000 • Facsimile (02) 9252 9244 • www.originenergy.com.au
3. How have you or your Origin has been a net buyer of ACCUs to date and was recently able to community benefited from the purchase ACCUs sourced from an Indigenous carbon farming project in the scheme? In what ways? NT, which provides significant community, cultural and biodiversity co-
benefits. We consider ACCUs have an important ongoing role to play in
offsetting emissions from hard to abate industries and supporting
achievement of voluntary emissions reductions targets.
Governance of the ERF
4. What are your views about The Emissions Reduction Assurance Committee (ERAC) is tasked with the roles and responsibilities of providing independent advice to the Commonwealth Minister for the Department, the Clean Environment and Energy, who is ultimately responsible for approving,
Energy Regulator, the varying and revoking ERF methods. Noting the ERAC chair and its
Emissions Reduction committee members are also appointed by the Minister, it would be
Assurance Committee and the beneficial to provide greater transparency around the role of the ERAC, it’s
Climate Change Authority? interaction with other relevant bodies and general decision making
Could the roles and processes with a view to ensuring robust governance practices are in responsibilities be refined to place.
improve scheme integrity?
Rigour and integrity of ERF methods and projects
5. Could improvements be Origin is strongly supportive of increasing transparency across the areas made to the transparency of: identified. With respect to information on ACCUs, it is currently challenging
▪ information used to support to retrieve information from the ANREU. Aligning the design of the ANREU
method development and with the Renewable Energy Certificate (REC) Registry and level of
review? How? information made available through that platform on large-scale generation
certificates (LGC’s) and small-scale technology certificates (STCs) would
▪ crediting of ACCUs? How? be beneficial. As discussed in response to Question 1, information on the
▪ decision making? How? co-benefits associated with ACCUs should also be provided.
Consideration should also be given to aligning scheme elements with the
Integrity Council for the Voluntary Carbon Market’s (IC-VCM) Core Carbon
Principles and Assessment Framework where possible, the purpose of
which is to provide a credible, rigorous, and readily accessible means of
identifying high-quality carbon credits. With respect to transparency, this
would require the CER to publish key documentation relating to their
decision making for registered ERF projects (e.g. standards, methodologies
etc.), subject to confidentiality constraints.
6. There are a lot of technical As discussed in response to Question 2 above, we have identified a rules and requirements for number of barriers associated with the ERF registration / assessment participants in the scheme. process that could impede the ability of new projects to participate in the
▪ Are these requirements scheme.
sufficiently robust to have
confidence in the integrity
of carbon abatement?
▪ Do these processes create
excessive or avoidable
barriers to participation?
▪ How might processes be
changed to better fulfil the
objectives of the scheme?
Co-benefits and other impacts
7. What is your experience with As discussed in response to Question 1 above, information on the co- co-benefits from carbon benefits associated with ACCUs is difficult to ascertain, as this information abatement projects? is not disclosed through the ANREU or any source information provided on
the CER website. Such information typically needs to be sourced directly
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from ACCU providers as part of any transaction, which can impede the
efficiency of the process.
8. What are the opportunities to The registration / assessment process should consider the full range of increase co-benefits from potential co-benefits, including environmental, economic, social, and carbon abatement projects? cultural benefits that could be achieved by a project in addition to carbon
abatement.
How should co-benefits be Standards / methods or performance metrics could be introduced to recognised and measured? measure the success of identified co-benefits (e.g. a project could have a
targeted performance metric of employing and training a certain number of
staff for a defined period, providing those staff with skills that would allow
them to be re-employed elsewhere in the community at the end of the
project).
Relationship to voluntary Climate Active certification
At present, all Climate Active We support the requirement that carbon neutral certification will only be carbon neutral certifications provided where a minimum 20 per cent of ACCUs have been used to offset will be required to use a emissions. ERF projects undergo a very thorough and detailed assessment minimum of 20% ACCUs from 1 process that can be relied upon to ensure ACCUs are credible and
July 2023 for new and ongoing therefore suitable for use in any carbon neutral claim.
certifications equal to or greater While there is a cost trade-off associated with using domestic ACCUs than 1,000 t CO2-e and from 1 relative to international offsets, in general, we consider the merits of the
July 2024 for certifications less requirement would outweigh any associated costs. This is because ACCUs than 1,000 t CO2-e. ultimately provide the additional benefit of supporting emissions reductions
▪ What are your views on this domestically, as well as other co-benefits related to different projects (e.g.
requirement? local employment).
▪ Do the merits of this The proposed requirement could potentially create some liquidity
requirement outweigh any challenges in the event demand for ACCUs materially increases and new
costs or disadvantages? project registrations are limited. As outlined in our separate response to
▪ Are there any issues with DCCEEW in relation to the safeguard mechanism consultation paper,
market access to ACCUs? ensuring incentives for safeguard facilities to undertake new ERF projects
are retained could assist with addressing this risk.
▪ Is there an alternative?
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