EXPLANATORY STATEMENT
Carbon Credits (Carbon Farming Initiative) Act 2011
Carbon Credits (Carbon Farming Initiative) Methodology (Landfill Gas) Determination 2014
EXPOSURE DRAFT
Background: Emissions Reduction Fund
The Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act1) enables the crediting of
greenhouse gas abatement from emissions reduction activities across the economy.
Greenhouse gas abatement is achieved either by reducing or avoiding emissions or by
removing carbon from the atmosphere and storing it in soil or trees.
In 2014, the Australian Government introduced the Carbon Farming Initiative Amendment
Bill 2014, which establishes the Emissions Reduction Fund (ERF). The ERF expands on the
Carbon Farming Initiative (CFI) by extending the scope of eligible emissions reduction
activities and by streamlining existing processes. The ERF has three elements: crediting
emissions reductions, purchasing emissions reductions, and safeguarding emissions
reductions.
Emissions reduction activities are undertaken as offsets projects. The process involved in
establishing an offsets project is set out in Part 3 of the Act. An offsets project must be
covered by, and undertaken in accordance with, a methodology determination.
Subsection 106(1) of the Act empowers the Minister to make, by legislative instrument, a
methodology determination. The purpose of a methodology determination is to establish
procedures for estimating abatement (emissions reductions and sequestration) from eligible
projects and rules for monitoring, record keeping and reporting. These methodologies will
ensure that emissions reductions are genuine—that they are both real and additional to
business as usual.
In deciding to make a methodology determination the Minister must have regard to the advice
of the Emissions Reduction Assurance Committee (ERAC), an independent expert panel
established to advise the Minister on proposals for methodology determinations. The Minister
will also consider any adverse environmental, economic or social impacts likely to arise as a
result of projects to which the determination applies.
The Carbon Farming Initiative Amendment Bill 2014 also provides a process for an Interim
ERAC to advise on draft methodology determinations before the Bill is passed by Parliament.
In particular, clause 393 of Schedule 1 to the Carbon Farming Initiative Amendment Bill
2014 enables the advice of the Interim ERAC to be used in the place of advice of the statutory
ERAC after the Bill commences. It is intended that consultation on this exposure draft be
used to inform the advice of the Interim ERAC under that provision.
All references to ‘the Act’ in this document refer to the Carbon Credits (Carbon Farming Initiative)
Act 2011, as if were amended by the Carbon Farming Initiative Amendment Bill 2014 (as introduced
into the Senate on 26 June 2014).
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The ERAC (or Interim ERAC) must include in its advice to the Minister the Committee’s
opinion on whether the proposed determination complies with the proposed offsets integrity
standards to be set out in section 133 of the Act. The offsets integrity standards require that an
eligible project should result in carbon abatement that is unlikely to occur in the ordinary
course of events and is eligible carbon abatement under the Act. In summary, the offsets
integrity standards also include that:

amounts are measurable and capable of being verified;

the methods used are supported by clear and convincing evidence;

material emissions which are a direct consequence of the project are deducted; and

estimates, assumptions or projections used in the determination should be
conservative.
Offsets projects that are undertaken in accordance with the methodology determination and
approved by the Clean Energy Regulator (the Regulator) can generate Australian Carbon
Credit Units (ACCUs), representing emissions reductions from the project.
Project proponents can receive funding from the ERF by submitting their projects into a
competitive auction run by the Regulator. The Government will enter into contracts with
successful proponents, which will guarantee the price and payment for the future delivery of
emissions reductions.
Further Information on the Emissions Reduction Fund is available at:
www.environment.gov.au/emissions-reduction-fund.
Background: Landfill gas
Landfills generate landfill gas when organic material decays in the anaerobic conditions of
landfills. Waste takes decades to decay so landfill gas is generated over long time frames and
can continue to be generated at closed landfills. Methane comprises about half of landfill gas
and is a potent greenhouse gas.
A landfill gas project operates a landfill gas collection system. In simple terms, this system
comprises a network of pipes and wells in the landfill, which collect landfill gas and convey it
to a combustion device. The combustion process converts most of the methane in the landfill
gas to carbon dioxide. This carbon dioxide has a biogenic origin (it originates from organic
material) and is therefore excluded from Australia’s national emissions reporting. This means
that combusting landfill gas can achieve substantial emissions reductions.
The CFI developed two landfill gas methodology determinations for crediting emissions
reductions of landfill gas generated by legacy waste, which is waste accepted at a landfill
facility between before 1 July 2012 (the start date of the carbon tax). The existing
methodology determinations (collectively referred to as ‘legacy Determinations’) are:

Carbon Farming (Capture and Combustion of Methane in Landfill Gas from Legacy
Waste) Methodology Determination 2012 (referred to as the ‘legacy Determination’)

Carbon Credits (Carbon Farming Initiative) (Capture and Combustion of Methane in
Landfill Gas from Legacy Waste: Upgrade Projects) Methodology Determination
2012 (referred to as the ‘legacy upgrade Determination’)
The existing CFI AWT determinations were assessed and endorsed by the Domestic Offsets
Integrity Committee as meeting the additionality and offsets integrity requirements of the
CFI. In general, the Exposure Draft Carbon Credits (Carbon Farming Initiative)
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Methodology (Landfill Gas) Determination 2014 (the draft Determination) applies an
approach consistent with the existing legacy Determinations to demonstrate consistency with
the proposed offsets integrity standards.
The draft Determination provides an incentive to install a new landfill gas collection system,
upgrade an existing system or recommence operation of a system at a site where one has
existed but not operated for some time. Credits are given for the destruction of emissions
from legacy waste and non-legacy waste accepted at the facility after 30 June 2014 (the end
date of the carbon tax).
The draft Determination also enables CFI landfill gas projects to transition to the ERF so that
they can receive credits for the destruction of emissions from non-legacy waste as well as
legacy waste.
All projects will be able to generate emission reductions for a seven year crediting period.
Application of the draft Determination
The draft Determination sets the requirements for implementing and monitoring offsets
projects that would avoid emissions by operating a landfill gas collection system. These rules
have been designed to reflect the requirements of the proposed offsets integrity standards and
ensure that emissions reductions are real and additional to business as usual.
Proponents of an eligible offsets project covered by one of the legacy Determinations that
wish to apply the draft Determination (once it is made) to their existing project, must make a
request to the Regulator as per section 128 of the Act. Subsection 130(3) requires the
Regulator to be satisfied that the project is covered by this Determination before approval is
granted. If a project is approved by the Regulator, the draft Determination will apply to the
project from the start of the relevant reporting period.
Project proponents that do not have an existing project covered by one of the legacy
Determinations and wish to implement a project under the draft Determination (once it is
made), must make an application to the Regulator under section 22 of the Act. They must also
meet the general eligibility requirements for an offsets project set out in subsection 27(4),
which include compliance with the requirements set out in the draft Determination, and the
additionality requirements in subsection 27(4A) of the Act. The additionality requirements
are:

the newness requirement

the regulatory additionality requirement, and

the government program requirement.
Subsection 27(4A) of the Act provides that a methodology determination may specify
requirements in lieu of any of the above requirements. The draft Determination specifies one
requirement in lieu, which provides specific instructions for determining the regulatory
additionality requirement.
Public Consultation
The draft Determination has been developed by the Department of the Environment in
collaboration with a technical working group of experts from the waste industry and the
Regulator. The waste sector technical working group held meetings on 26 November 2013,
27 February 2014 and 21 July 2014. The technical working group has reviewed several draft
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versions of this methodology prior to release of the draft Determination for public
consultation.
The exposure draft of the Determination has been published on the Department’s website for
public consultation from 3 September 2014 to 1 October 2014. Details for how to make a
submission are provided on the Department of the Environment website,
www.environment.gov.au.
Draft Determination Details
The draft Determination will be a legislative instrument within the meaning of the Legislative
Instruments Act 2003.
The draft Determination will begin on the day after it is registered.
The draft Determination will end when it is either revoked under section 123 of the Act, or on
the day before it would otherwise be repealed under the Legislative Instruments Act 2003,
whichever happens first. Under subsection 50(1) of that Act, a legislative instrument such as
the draft Determination is repealed on the first 1 April or 1 October falling on or after the
tenth anniversary of registration of the instrument on the Federal Register of Legislative
Instruments. For example, if the draft Determination is registered between 1 October 2014
and 1 April 2015, it would expire on 31 March 2025.
Details of the draft Determination are at Attachment A.
Note on this explanatory statement
Numbered sections in this explanatory statement align with the relevant sections of the draft
Determination.
The definition of terms highlighted in bold italics can be found in the draft Determination.
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Attachment A
Details of the Methodology Determination
Part 1
1
Preliminary
Name of Determination
Section 1 sets out the full name of the draft Determination, which is the Carbon Credits
(Landfill Gas) Methodology Determination 2014.
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Commencement
Section 2 provides that the draft Determination would commence on the day after it is
registered.
3
Authority
Section 3 provides that the draft Determination would be made under subsection 106(1) of the
Act.
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Duration
Paragraph 4(a) provides that the Determination would begin when it is made.
Under subparagraph 122(1)(b)(i) of the Act, a methodology determination remains in force
for the period specified in the Determination.
Paragraph 4(b) provides that a determination ends on the day before it would otherwise be
repealed under subsection 50(1) of the Legislative Instruments Act 2003.
Instruments are repealed under that provision on the first 1 April or 1 October following the
tenth anniversary of registration on the Federal Register of Legislative Instruments. Paragraph
4(b) ensures that the Determination will expire in accordance with subparagraph 122(1)(b)(i)
of the Act.
If the Determination expires or is revoked during a crediting period for a project to which the
Determination applies, the Determination will continue to apply to the project during the
remainder of the crediting period under subsections 125(2) and 127(2) of the Act. Project
proponents may apply to the Regulator during a reporting period to have a different
methodology determination apply to their projects from the start of that reporting period (see
subsection 128(1) of the Act).
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Definitions
Section 5 defines a number of terms used in the draft Determination.
Generally, where terms are not defined in the draft Determination, they have the meaning
given by section 5 of the Act.
Under section 23 of the Acts Interpretation Act 1901, words in a determination in the singular
number include the plural and words in the plural number include the singular.
Two terms are particularly important because they help specify project requirements in Part 3.
These are combustion device and collection efficiency.
The definition of combustion device expands on the definition given in the legacy
Determinations by allowing the crediting of combustion of landfill gas not only by flare or
internal combustion engine, but also by boiler or any other device that has a methane
destruction efficiency of at least 98 per cent, is operated in accordance with the
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manufacturer’s instructions, and whose operation can be monitored each minute. These
requirements provide flexibility by allowing any type of combustion device to be used, as
long as it meets the specified operational requirements, which support the offsets integrity
standards.
The definition of collection efficiency supports the requirements in Part 3 for upgrade
projects, which includes improving the collection efficiency of the existing landfill gas
collection system. The term is defined as the proportion of methane in landfill gas that is
generated in a landfill that is collected by a landfill gas collection system, expressed as a
percentage. This distinguishes that an upgrade project is not simply one that collects more
landfill gas than what was collected before the upgrade. This definition enables upgrade
projects to be potentially undertaken at landfills with decreasing or variable landfill gas
generation rates, provided that the collection efficiency of an existing system improves.
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Part 2
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Landfill gas projects
Landfill gas projects
The effect of paragraphs 27(4)(b) and 106(1)(a) of the Act is that a project must be covered
by a methodology determination, and that the methodology determination must specify the
kind of offsets project to which it applies.
Section 6 specifies the high level features of the project that distinguish it from other types of
offset projects. For the draft Determination important features that describe the kind of offsets
project are:


The project collects and combusts landfill gas; and
The project is either a new project, upgrade project or a transitioning project.
The draft Determination defines these kinds of projects as landfill gas projects.
Project requirements for new, upgrade and transitioning types of projects are defined more
extensively in Part 3 of the draft Determination.
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Part 3
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Project requirements
Operation of this part
Section 7 provides that an eligible offsets project to which the draft Determination applies
must be operated in accordance with Part 3.
The effect of paragraph 106(1)(b) of the Act is that a methodology determination must set out
requirements that must be met for a project to be an eligible offsets project. Under
paragraph 27(4)(c) of the Act, the Regulator must not declare that a project is an eligible
offsets project unless the Regulator is satisfied that the project meets these requirements.
Part 3 of the draft Determination specifies a number of requirements that must be met in order
for a project to be an eligible offsets project.
A key requirement under both the ERF and the CFI is that credits are issued for emissions
reductions that are ‘additional’ - that is, emissions reductions would not likely have occurred
under normal business conditions, in the absence of the ERF. Transitioning projects have
already been assessed as additional. The newness, regulatory additionality and government
program requirement are additionality requirements specified in subsection 27(4A) of the
Act. The requirements for newness and government programs are sufficient for eligible
landfill gas projects and therefore the draft Determination does not specify requirements in
lieu of those in the Act. However, the draft Determination does specify a requirement in lieu
of the regulatory additionality requirement in the Act.
There are three types of projects to which the method applies:
1. a new project; or
2. an upgrade project; or
3. a transitioning project.
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Requirements for a new project
Section 8 sets out requirements for new projects which collect and combust landfill gas in a
combustion device. New projects are those that either install a new landfill gas collection
system where there has never been a system before or recommence operation of a system at a
landfill where a system has operated in the past. In both these cases, because there is no
landfill gas collection system the ERF likely provides the incentive to begin or recommence
operation of a system and therefore it was not likely to occur in the ordinary course of events.
For the case that the project recommences operation of a landfill gas capture system at a site
where a system previously operated, it is a requirement that a system has not operated:


after 24 April 2014; and
for at least three years before as application for the project as an eligible offsets
project is made.
The date 24 April 2014 reflects the date the ERF White Paper was released. A decision to
switch off a landfill gas collection system prior to this date is assumed to have been made
without the influence of the ERF.
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Requirements for an upgrade project
Section 9 sets out requirements for upgrade projects which collect and combust landfill gas
in a combustion device. An upgrade project is one that upgrades an existing and operating
landfill gas collection system to increase the collection efficiency of the system.
There are no restrictions on the type of activities that can be undertaken to improve the
existing system’s collection efficiency. Examples include upgrading the way landfill gas is
collected by adding more wells, upgrading the capacity of the combustion devices or
installing new software for optimising the operation of the system. The calculation of the net
abatement achieved by an upgrade project depends on the magnitude of improvement to
collection efficiency. It is therefore assumed that the upgrade action requires a capital
investment, which is incentivised by the ERF and not likely to occur in the ordinary course of
events.
Consistent with the legacy upgrade Determination, the draft Determination requires
24 months continuous operational records for the existing system to calculate the collection
efficiency before the upgrade and 12 months continuous records following the upgrade to
calculate the improvement to the collection efficiency. The time period prior to the upgrade
reflects capture rates under the full range of seasonal conditions, with allowance for year on
year variation. The 12 months data following the upgrade is considered a practical
compromise between ensuring the data represents the full seasonal conditions. In line with
this, it is not possible to submit an offsets report within the first twelve months of a project.
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Requirements for a transitioning project
Section 10 sets out requirements for transitioning projects which collect and combust landfill
gas in a combustion device. A project meets the project requirement to be a transitioning
project if it has been declared under either of the legacy Determinations:
 Carbon Farming (Capture and Combustion of Methane in Landfill Gas from Legacy
Waste) Methodology Determination 2012

Carbon Credits (Carbon Farming Initiative) (Capture and Combustion of Methane in
Landfill Gas from Legacy Waste: Upgrade Projects) Methodology Determination
2012.
As transitioning projects have already been declared eligible offsets projects and met the
additionality criteria in the Act at the time they were declared eligible, they do not need to
apply under section 22 of the Act to remain an eligible offset project.
The draft Determination does not automatically apply to transitioning projects. Instead,
transitioning projects must make an application to the Regulator under section 128 of the Act
to request to have the draft Determination apply to the project with effect from the start of the
reporting period. The Regulator must be satisfied that the project is covered by this
methodology determination under subsection 130(3) of the Act, but the additionality and
other requirements of subsections 27(4) and (4A) of the Act are not assessed under section
130 of the Act for a transition to be approved.
Subsection 12(2) requires that the project must be implemented substantially in accordance
with the project application made under section 22 of the Act. A project must seek approval
from the Regulator if they intend to make a significant change from the project outlined in the
application.
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11
Additionality requirements
Section 11 of the draft Determination defines any requirements in lieu of the additionality
requirements specified in the subsection 27 (4A) of the Act. Requirements in lieu for
transitioning projects have not been specified in the draft Determination, because they are
not assessed under the additionality requirements of the Act. Transitioning projects have
already been assessed to be additional under the CFI.
Section 11 specifies a requirement in lieu of the regulatory additionality requirement under
subparagraph 27(4A)(b)(i) of the Act. State and territory regulations for the management of
landfill gas to meet safety, odour and environmental objectives are a common reason why
landfill gas collection systems are installed or upgraded. The existence of a regulatory
requirement does not, in itself, render a project ineligible. Instead, the draft Determination
credits abatement which goes beyond the level required by regulation. The way to calculate
abatement above the baseline level is in Part 4 of the draft Determination.
No requirements are specified in lieu of the newness requirement because each of the new
installation and upgrade projects described in sections 8 and 9 of the draft Determination
have clear actions that can be taken to mark the beginning of the project enabling the
application of the requirement under subparagraph 27(4A)(a)(i) of the Act for these project
types.
No requirements are specified in lieu of the government program requirement. The effect of
the two government programs that are most relevant to the assessment of this additionality
requirement, the Renewable Energy Target (RET) and the carbon tax, are addressed in the
calculation of new abatement. To avoid paying twice for emissions reductions supported by
the RET, emissions reductions for the generation of renewable energy are excluded from the
draft Determination. To avoid paying for emissions reductions from waste deposited whilst
the carbon tax was in force, the method only credits the destruction of emissions from legacy
waste (accepted at the landfill before the start of the carbon tax) and non-legacy waste
(accepted at the landfill after the end of the carbon tax).
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Part 4
Net abatement amount
To assist project proponents calculate the net abatement amount in accordance with Part 4, an
ERF landfill gas calculator will be provided that automates the calculations. This calculator
will be similar to the CFI landfill gas calculator that automates the calculations in the legacy
Determinations. The ERF landfill gas calculator will also incorporate aspects of the CFI
methane regulatory baseline calculator that automate calculation steps which have been
included in the draft Determination, originally sourced from the Carbon Farming Initiative
Guidelines for Calculating Regulatory Baselines for Legacy Waste Landfill Methane
Projects. Both these existing calculators are provided on the Department of Environment’s
website: http://www.climatechange.gov.au/reducing-carbon/carbon-farminginitiative/methodologies/methodology-determinations/capture-and-combustion-landfill-gas.
Division 1
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Operation of this part
Operation of this part
Section 12 provides an overview of Part 4 of the draft Determination, which contains formula
to calculate net abatement. Paragraph 106(1)(c) of the Act provides that a methodology
determination must specify how to calculate the carbon dioxide equivalent (CO2-e) net
abatement amount for the project in relation to a reporting period.
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Overview of gases accounted for in abatement calculations
Section 13 provides a summary of the greenhouse gas sources that are assessed in order to
determine the net abatement amount. The emission sources which need to be taken into
account when calculating abatement for the project are set out in Table 1.
Table 1: Overview of gases accounted for in the abatement calculations
Relevant emissions
calculation
Emissions source
Greenhouse gas
Baseline abatement
Destruction of methane in landfill gas
by combustion
Methane (CH4)
Baseline abatement
Destruction of methane in landfill gas
by oxidation in the near surface
conditions of the landfill
Methane (CH4)
Project abatement
Destruction of methane in landfill gas
by combustion
Methane (CH4)
Project emissions
Combustion of landfill gas
Methane (CH4)
Nitrous oxide (N2O)
A number of emissions sources are excluded from the abatement calculations for the
following reasons:

Emissions from generating, collecting, transporting, processing and disposing of the
waste that generates landfill gas collected in the project, because these activities are
common to both the baseline scenario and project. Even if the project is the
installation of a new system, the baseline assumes that there is a landfill gas capture
system installed (which collects and destroys a proportion of the amount collected and
destroyed by the project system to reflect minimum regulatory requirements).

Carbon dioxide emissions emitted from the decay of organic waste in a landfill and
the combustion of landfill gas, because these emissions have a biogenic origin
(originate from organic material).
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
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Emissions from using fuel or electricity to operate the landfill gas system, including
any processing of the landfill gas. This exclusion is based on analysis of data from
existing CFI landfill gas projects concluding that this emission source is considered
immaterial. This exclusion also streamlines the record-keeping and reporting
requirements for project proponents.
References to factors and parameters from external sources
Default, calculated and monitored parameters must be sourced or measured according to the
instructions within the draft Determination. The draft Determination aligns with the NGER
(Measurement) Determination; however, the draft Determination must take precedence over
other sources. Unless otherwise specified, the proponent should use the NGER
(Measurement) Determination approaches and default values that are sourced from
referenced documents current at the time of reporting emissions reductions from an approved
project or at the time the report is required (whichever is earlier). The application of
referenced documents current at the time of reporting is consistent with the approach used in
existing CFI determinations.
Subsection 14(2) clarifies that projects are not expected to retrospectively apply monitoring
requirements specified in the NGER (Measurement) Determination or other relevant sources.
Projects should apply the monitoring requirements using approaches current at the time
monitoring occurs.
Division 2
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Method for calculating net abatement amount
Preliminary net abatement amount (Anet)
The carbon dioxide equivalent net abatement amount for an eligible offsets project is set out
in equation 1. For landfill gas projects the net abatement amount is project abatement minus
baseline abatement. This is consistent with the legacy Determinations and means that credits
are only given for the abatement achieved in the project that goes beyond what would have
been achieved in the baseline scenario.
Division 3
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Project abatement
Project abatement (AP)
Section 16 provides that the project proponent must determine the project abatement amount
for each reporting period by completing equation 2, which has three elements:

the amount of methane from legacy and non-legacy waste that is combusted in the
project,
less
 the portion of this combusted methane that in the absence of the project would have
been oxidised in the near surface conditions of the landfill, and
 the nitrous oxide emitted by combustion devices in the project.
This is consistent with the legacy Determinations, with the exception that the emissions from
operating the landfill gas system (fossil fuel and electricity use) are not included in the
calculation of project abatement because they are considered immaterial.
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Methane combusted that was not generated from carbon tax waste (Mcom,NCT)
Section 17 requires the project proponent to determine the amount of methane combusted that
was generated from legacy and non-legacy waste. This calculation is done by multiplying the
total volume of methane combusted, by the proportion of that methane that was not generated
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by carbon tax waste. A default conversion factor is used to express the result of this
calculation in carbon dioxide equivalent.
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Proportion of total methane combusted that was not generated from carbon tax waste
(WNCT)
Section 18 provides that the calculation of the proportion of methane that was generated from
non carbon tax waste (
) is done on a financial year basis. A simplification for project
reporting is that the calculation of
in one reporting period would be applicable for other
reporting periods falling within the same financial year.
The calculation of the proportion requires calculating the total methane generated in the
landfill (Mtotal,y) and the methane generated from carbon tax waste in a particular financial
year y (MCTW,y) using the NGER (Measurement) Determination.
To cater for the fact that a two year reporting period could potentially span over three
different financial years, the proportion of methane combusted in the reporting period that
occurred in each financial year is used to calculate an overall weighted proportion for the
reporting period ( the parameters Mcom and Mcom,y perform this aspect of the calculation.).
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Methane combusted (Mcom and Mcom,y)
Section 19 provides that the volume of methane combusted in the project Mcom is calculated
as the sum of methane combusted by each combustion device h (Mcom,h).
To account for the situation that a combustion device does not achieve complete destruction
of methane, the amount combusted is determined by multiplying the amount of methane sent
to the combustion device, by a default destruction efficiency factor. This factor (98 per cent)
is consistent with the legacy Determinations.
Unless the combustion device is an internal combustion engine, boiler or flare with a
monitoring and control system, it is necessary to ensure that the amount of methane sent to
the combustion device when it is not operating in a satisfactory manner (and therefore may
not be properly combusting the methane) is excluded from the calculation of net abatement.
To achieve this adjustment the operation of the combustion device must be determined on an
hourly basis. If it is not operating satisfactorily, then the amount of methane combusted is
zero for that hour. This is consistent with the legacy Determinations.
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Methane sent to combustion device (Msent,h, Msent,h,a, Msent,h,y)
Section 20 provides three options to calculate the methane sent to a combustion device h
(Msent,h), consistent with the legacy Determinations. Each option requires a different
monitored parameter, either the volume of landfill gas sent to the combustion device, the
energy content of the landfill gas sent to the combustion device or the electricity produced by
the combustion device (this option is applicable to internal combustion engines only).
Depending on the output required, the calculation is carried out on different time basis, either
the default reporting period (calculating Msent,h), the hour a in the reporting period
(calculating Msent,h,a), or the year y (calculating Msent,h,y),
Subsection (2) requires that if a project proponent chooses to monitor the fraction of the
volume of landfill gas sent to combustion devices that is methane (WLFG,CH4) continuously,
then they must monitor continuously for the entire project. If a project uses the default value
for WLFG,CH4, the project may change to continuous monitoring but cannot change back to the
default.
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21
Methane from non-carbon tax waste combusted that would have been oxidised in near
surface conditions (Mcom,ox)
Section 21 provides the formula to calculate Mcom,ox which is the amount of the methane
generated by legacy and non-legacy waste combusted in the project that would have been
oxidised in the near surface conditions of the landfill. Under the project activity, this
oxidation effect is reduced as a part of the landfill gas is captured and does not pass through
the top layer of the landfill.
Because a proportion of the methane combusted in the project would also have been
combusted in the baseline, oxidation in the near surface conditions of the landfill only needs
to be accounted for the amount of methane combusted that is beyond what would have been
combusted in the baseline. This is done using the baseline proportion value of WB. The
oxidation factor OFLF is a default value sourced from the NGER (Measurement)
Determination.
22
Nitrous oxide emissions released from combustion devices (Ecom)
Section 22 provides the formula to calculate the emissions of nitrous oxide from the
combustion device. The emissions of methane are not accounted for in this section of the
draft Determination, because the methane emissions from combustion are already accounted
for in the application of the destruction efficiency factor in section 19. The destruction
efficiency factor of 98 per cent means that 2 per cent of the methane is assumed to be released
to the atmosphere.
The formula is consistent with the NGER (Measurement) Determination. It requires that only
the emissions from combusting methane from legacy and non-legacy waste are accounted for
by multiplying by the proportion WNCT, which is calculation in section 18 of the draft
Determination.
Division 4—Baseline abatement
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Baseline abatement (AB)
Section 23 provides the formula to calculate baseline abatement, which is the baseline
proportion multiplied by the methane emissions from non-carbon tax waste that are
combusted in the project (calculated in section 17). The baseline proportion is that proportion
of the methane combusted in the project which would have been combusted in the absence of
the project. This approach is consistent with the legacy Determinations.
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Proportion of methane that would have been combusted without the project (WB)
Section 24 provides three approaches for determining the proportion of methane that would
have been combusted without the project, depending on whether the project is a new,
upgrade or transitioning project.
For new projects, the baseline proportion is the higher of the proportion associated with a
default value, representing qualitative regulatory requirements, or the proportion derived from
quantitative regulatory requirements, which is calculated consistent with the approach to
calculating the baseline proportion in the Carbon Farming Initiative Guidelines for
Calculating Regulatory Baselines for Legacy Waste Landfill Methane Projects. The default
value is either 30 per cent or 0 per cent. The 0 per cent default can only be applied if the
proponent is able to demonstrate that no qualitative requirements apply to the landfill.
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For upgrade projects, the baseline proportion is the higher of the default baseline proportion
(representing qualitative regulatory requirements2), the proportion derived from quantitative
regulatory requirements or the proportion representing the improvement to the collection
efficiency achieved by the upgrade. This approach is consistent with the legacy upgrade
Determination and consistent with the offsets integrity standards, including being a
conservative and verifiable approach.
Transitioning projects retain their existing baseline proportion.
25
Proportion of methane that would have been combusted without upgrading (WB,exist)
Section 25 provides project proponents with the formula to calculate the proportion of
methane that represents the magnitude of improvement to collection efficiency achieved by
the project (WB,exist). The calculation requires the collection efficiency of the existing landfill
gas capture system before and after the upgrade (Wcom,bef and Wcom,aft). This approach is
consistent with the legacy upgrade Determination.
The average proportion of methane from landfill waste that is captured and destroyed in the
two years prior to upgrade is calculated by dividing the sum of the amount of methane
captured and combusted on site (
) and the methane captured and destroyed
when transferred out of the landfill (
) by the total amount of methane generated by the
landfill (
) for each of the two years prior to the upgrade. The mean of the value is
determined by summing the results for each of the two years and dividing by two. A
conversion factor
is used to express the amount of methane captured and destroyed in
tonnes of carbon dioxide equivalent.
The average proportion of methane from landfill waste that is captured and destroyed in the
12 months immediately following completion of the upgrade is calculated by dividing the
sum of the amount of methane captured and combusted on site in this year y (
) and the
methane captured and destroyed when transferred out of the landfill (
) by the total
amount of methane generated by the landfill (
).
A conversion factor
is used to express the amount of methane captured and destroyed in
tonnes of carbon dioxide equivalent.
2
Qualitative requirements may be included in state or territory legislation or in guidelines for waste
management and landfills set by state and territory environmental regulators. Many landfill licences or
development approvals include a qualitative requirement to capture, control, manage or limit landfill gas,
methane, odour or greenhouse gases. These requirements may be expressed in a variety of ways and do not need
to include specific instructions or directions.
15
Part 5
Monitoring, reporting and record keeping
Subsection 106(3) of the Act provides that a methodology determination may require the
project proponent of an eligible offsets project to comply with specified monitoring,
record-keeping and reporting requirements.
Under Parts 17 and 21 of the Act, a failure to comply with these requirements may constitute
a breach of a civil penalty provision, and a financial penalty may be payable.
The monitoring, record-keeping and reporting requirements specified in Part 5 of the draft
Determination are in addition to any requirements specified in the Act, Regulations or
legislative rules.
Reporting periods
The Act and subordinate legislation provide for flexible reporting periods between six months
and two years in duration. Proponents should be aware that the Act and subordinate
legislation may also specify other reporting and notification requirements affecting the draft
Determination, including to allow shorter reporting periods.
Record-keeping requirements
No record-keeping requirements are specified in the draft Determination since the Act,
Regulations and legislative rules specify record-keeping requirements that apply to all
projects. The Regulations currently include several record keeping requirements and the
intention is to revise these requirements and transfer them from Regulations to legislative
rules. The record-keeping requirements are expected to include:

evidence that the project is, and remains, of a kind to which the determination applies;

evidence that project implementation and operation continues to satisfy requirements
for maintaining its declaration;

evidence that the carbon-dioxide equivalent net abatement amount for each reporting
period has been ascertained using the method specified in, or ascertained in
accordance with, the determination;
 evidence that the specified requirements to monitor the project have been met in
relation to each reporting period;
 where relevant, operation, monitoring and calibration records of any combustion and
monitoring device and evidence that the operation, monitoring and calibration of
equipment is in accordance with manufacturers’ specifications or instructions;

correspondence between the proponent and the Regulator in relation to an eligible
offsets project; and

offset reports and CFI audit reports.
Changed audit requirements
The Act introduces a risk-based approach to auditing emissions reductions. Subsection 76(4)
of the Act provides for legislative rules to be made by the Minister, specifying the level of
assurance, frequency and scope of the audit report that must be provided with project reports
for different types of projects.
16
Division 1—Offsets report requirements
26
Operation of this Division
The effect of paragraph 106(3)(a) of the Act is that a methodology determination must set out
requirements to be included in each offsets report.
27
Information that must be included in an offsets report
Section 27 sets out what must be included in an offsets report. Project proponents are not
required to replicate the calculations in their report, but instead list the key parameters that
were used to determine the net abatement. These are:
a) the project abatement for the reporting period in tonnes CO2-e (
the equation 2);
) (worked out using
b) the baseline abatement for the reporting period in tonnes CO2-e (AB) (worked out
using equation 13);
c) any changes to the combustion devices used during the reporting period, including
any changes to the type and number of such devices;
d) the total amount methane combusted during the reporting period in cubic metres;
e) the proportion of methane generated from non-carbon tax waste (WNCT) that was
combusted during the reporting period; and
f) the proportion of the methane combusted during the reporting period that would have
been combusted without the project (WB) (worked out using the equation 14).
Division 2—Monitoring requirements
28
Operation of this Division
Monitored parameters are measured according to the instructions provided in Part 5 of the
draft Determination. In general monitored parameters refer to requirements specified in the
NGER (Measurement) Determination.
29
Requirement to monitor certain parameters
Section 29 lists parameters used in the calculation of net abatement amounts in Part 4 of the
draft Determination that require monitoring, including specifications for the manner and
frequency of monitoring.
The draft Determination requires that measurement procedures meet specifications in the
NGER (Measurement) Determination or other relevant standards and other requirements
under the National Measurement Act 1960. This is implicit where a parameter must be
measured in accordance with the NGER (Measurement) Determination, and otherwise a
monitoring parameter must meet appropriate measuring requirements.
Any equipment or device used to monitor a parameter must be calibrated by an accredited
third party technician at intervals, and using methods, that are in accordance with the
manufacturer’s specifications.
These monitored parameters relate to the calculation of the amount of methane combusted in
the project:

Energy content of the landfill gas sent to combustion device (h);

Operation of combustion device (h) during hour (a);
17

Landfill gas sent to combustion device (h);

Electricity (supplied to the grid or used on site) generated by internal combustion
engine (h); and

Fraction of the volume of landfill gas that is methane.
For periods when parameters are not measured according to provided specifications, then
measurements during these periods must be taken to be zero.
18
Schedule 1 – Determining the regulatory proportion (WB,reg)
Part 1—Operation of this Schedule
1
Operation of this Schedule
Clause 1 sets out that Schedule 1 provides the calculation steps for determining the baseline
proportion that reflects quantitative regulatory requirements (WB,reg). Project proponents may
determine WB,reg, by selecting one of the three ways given in Parts 2 to 4 of Schedule 1. Each
of these calculation options is consistent with the Carbon Farming Initiative Guidelines for
Calculating Regulatory Baselines for Legacy Waste Landfill Methane Projects.
The three approaches (Parts 2 to 4 respectively) to determining WB,reg are:
 using methane concentration limits (ppm) contained in landfill guidelines; or
 asking the environmental regulator to determine the required methane capture rate; or
 default determination based on the performance of an existing landfill gas collection
system.
The source of the quantitative regulatory requirement is the applicable methane concentration
limits, often expressed as the parts per million methane permitted to be emitted from the
landfill, as set by state or territory regulators in the state or territory where the landfill is
located. This applicable methane concentration limit is sourced from state and territory
guidelines and must be the most stringent that has been in place since 24 March 2011.
Applying the most stringent requirement in place since 24 March 2011, is consistent with the
negative list requirements under the CFI. Kinds of projects included on the negative list are
‘excluded offsets projects’ meaning they are not eligible to generate ACCUs under paragraph
27(4)(m) of the Act. This includes projects previously mandated under a Commonwealth or a
state or territory law no longer mandatory because the law was repealed after 24 March 2011.
The intent of this provision is to remove incentives for governments to relax legislative
requirements so that existing projects could access funding through the ERF, as abatement
must be additional to what would occur in the absence of the ERF.
Two of the ways (Parts 3 and 4) to determine WB,reg require requesting the relevant
environmental regulator for information. Subclause 1(2) clarifies that this does not require the
environmental regulator to do anything. This means that these options may not be available to
a project proponent.
19
For Discussion – No option to use a NGER auditor to determine the baseline proportion
The three options provided in Schedule 1 for how to determine the baseline proportion that
reflects quantitative regulatory requirements are consistent with the Carbon Farming
Initiative Guidelines for Calculating Regulatory Baselines for Legacy Waste Landfill
Methane Projects (“CFI guidelines”). However, a fourth option available under the CFI which is for a project proponent to engage a registered National Greenhouse and Energy
Auditor to calculate their offset project’s baseline proportion that reflects quantitative
requirements - has not been included.
The Department proposes removing this option in the draft Determination for a number of
reasons:
1. None of the 68 projects registered under either of the legacy Determinations has so far
used this option;
2. The Greenhouse and Energy auditor is not performing an audit function in accordance
with the NGER Act, but rather an assessment that is part of the calculation of net
abatement. As this is not a verification or assurance service, it does not align with the
purpose for which Greenhouse and Energy Auditors are registered and may cause
confusion among stakeholders; and
3. A National Greenhouse and Energy Auditor will not necessarily have expertise that
supports determining the baseline proportion. The status of being a registered Greenhouse
and Energy Auditor does not necessarily ensure experience with landfill offset projects or
knowledge of the legislative framework for landfills.
Stakeholders are invited to submit comments on the proposal to remove this option from the
draft Determination.
20
Part 2—Using methane concentration limits contained in landfill guidelines
Part 2 of Schedule1 lists the applicable methane concentration limit and corresponding flux
rates (as sourced from state and territory guidelines and that represent the most stringent
requirements since 24 March 2014). These values could be specified by environmental
regulators differently for the final cover area and intermediate cover area of a landfill, such
as because intermediate cover area is likely to be more permeable and temporary than the
final cover area. These methane concentration limits and the corresponding flux rate may be
updated periodically if applicable methane concentration limits become more stringent.
2
Using methane concentration limits contained in landfill guidelines
Clause 2 states that the steps for calculating WB,reg for Part 2 are set out in clauses 3 to 9.
3
Determine permitted methane emissions for the final cover area
Subclause 3(1) lists the applicable methane concentration limits for the final cover area and
corresponding flux rates. To express the flux rate in terms of tonnes of carbon dioxide
equivalent, rather than tonnes of methane, it is necessary to multiply by the Global Warming
Potential value for methane set out in regulation 2.02 of the National Greenhouse and Energy
Reporting Regulations 2008.
Subclause 3(2) explains how to calculate the maximum amount of methane, expressed in
carbon dioxide equivalent, that can be emitted from the final cover area in an annual period
and meet the applicable methane concentration limit. The calculation requires knowing the
square meter area of the final cover area and multiplying this by the flux rate calculated in
subclause 3(1) and hours in the year.
Subclause 3(3) explains how to calculate the maximum amount of methane that can be
generated that is within the limits of the amount that can be emitted from the final cover area.
This is calculated by dividing the maximum amount of methane that can be emitted from the
final cover area, as calculated in subclause 3(2), by 0.9. This accounts for the fact that the
applicable methane concentration limit applies to the amount of methane emitted, which is
different to the amount of methane generated because 10% of the amount generated is
oxidised to carbon dioxide before it is emitted.
4
Determine permitted methane emissions for the intermediate cover area
Subclauses 4(1), 4(2) and 4(3) repeat the calculation steps in clause 3, however for the
applicable methane concentration limit, and corresponding flux rates, that apply to the
intermediate cover area rather than final cover area. To date, the applicable methane
concentration limits set by environmental regulators have been the same for intermediate
cover area and final cover area.
The provision of separate clauses 3 and 4 for calculating permitted methane emissions from
intermediate cover area and final cover area account for the possibility that different
methane concentration limits could be specified in the future.
5
Determine permitted methane emissions for the daily cover area
There are no methane concentration limits currently specified in landfill guidelines for daily
cover/operational areas. Clause 5 therefore sets a different procedure to the one set out in
clauses 3 and 4 for how to determine the permitted methane emissions for the daily cover
area. For the purposes of the draft Determination it is assumed that the emissions through
21
the daily cover area must not exceed the methane that is generated by the waste deposited
vertically below the daily cover/operational area.
The NGER (Measurement) Determination is used to calculate this amount of methane
generated. Subclause 5(b) gives instructions on how to perform this calculation, including
specifying the time period for the calculation is the year before the project begins, and that the
amount of waste that is assumed to be landfill comprises only the waste sited vertically below
the daily cover/operational area.
6
Determine total annual methane generated in the landfill
Clause 6 sets out how to determine the total annual methane generated in the landfill. The
NGER (Measurement) Determination is used to calculate this amount of methane. Subclause
6(b) gives instructions on how to perform this calculation, including specifying the same time
period for the calculation that is specified in clause 5. It is important that the time period for
these two calculations is consistent.
7
Determine total annual permitted methane emissions
Clause 7 instructs that the total permitted methane emissions is calculated by summing the
permitted annual methane emissions from final cover area, intermediate cover area and the
daily cover/operational area. These amounts have been calculated in clauses 4, 5 and 6.
8
Determine total methane that must be captured
Clause 8 instructs how to determine the total methane that must be captured from the landfill
by deducting the total annual permitted methane emissions for the landfill (calculated in
clause 7) from the total annual quantity of methane generated from waste in the landfill
(clause 6).
9
Calculate WB,reg
Clause 9 gives the final step to calculate WB,reg which is to divide the total annual methane
generated by the landfill (worked out under clause 6) by the total methane that must be
captured from the landfill (worked out under clause 8).
22
Part 3—Asking the environmental regulator to determine the required methane capture
rate
10
Using a proportion of gas generation that must be captured
Subclause 10(1) enables the project proponent to ask their state or territory environmental
regulator to determine the gas capture rate required to meet the applicable methane
concentration limits applying to the landfill. Subclause 10(2) accounts for the situation that
the environmental regulator could determine the gas capture rate in a number of different
quantitative ways. The different ways accounted for in the draft Determination are allowable
methane concentration limit, flux rate, proportion of methane generated that must be
collected, proportion of methane generated that is allowed to be released and the amount of
landfill gas that must be captured. If any other quantitative gas capture rate is specified then
the project proponent must calculate how much gas must be captured to meet the requirement,
which is then converted to the regulatory proportion by dividing by the total methane
generated using the NGER (Measurement) Determination.
Subclause 10(3) provides a table to convert methane concentrations to flux rate. The
information in this table was the basis for determining the flux rates specified in Part 2 of
Schedule 1.
23
Part 4—Default determination
11
Default determination
Clause 11 enables the proponent to ask the environmental regulator whether their current gas
capture rate complies with the capture rate required in their state or territory. This clause can
be applied where there is an existing landfill gas collection system operating at the landfill. If
the response from the environmental regulator is yes, WB,reg is taken to be the amount of gas
captured over the 12 months prior to the assessment by the environmental regulator divided
by the amount of gas generated in the same 12 months.
Subclause 11(3) clarifies that the option provided in Part 4 is only available if state or
territory regulatory requirements have not changed since 24 March 2011.
24