CARBON FARMING INITIATIVE Application to Vary a Methodology Determination [Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation— 1.1) Methodology Determination 2013] [Carbon Conscious Ltd] This form must be used when making an application to the Domestic Offsets Integrity Committee under section 116 of the Carbon Credits (Carbon Farming Initiative Act) 2011 for endorsement of a proposal for the variation of a methodology determination. 1 Disclaimer The material in this document is made available for general information only and on the understanding that the Commonwealth is not providing advice, nor indicating a commitment to a preferred policy position. Before relying on any material contained in this document, entities should familiarise themselves with the Carbon Farming Initiative (CFI) and obtain professional advice suitable to their particular circumstances. While reasonable efforts have been made to ensure the accuracy, correctness and reliability of the material contained in this document, the Commonwealth does not accept responsibility for the accuracy or completeness of the contents or any inferences, and expressly disclaims liability for any loss, however caused and whether due to negligence or otherwise, arising directly or indirectly from the use of, inferences drawn, deductions made, or acts done in reliance on, this document or the information contained in it, by any person. Privacy As a Commonwealth agency, the Department of Climate Change and Energy Efficiency is bound by the Privacy Act 1988 (Cth). Any personal information that you submit as part of an application for assessment of a draft methodology will be collected and securely stored by the Department. Any personal information collected about you will only be used in relation to your application. Your personal information may be used by the Department for consultation purposes or to contact you in the future. For more information about the Department’s privacy practices, see the full privacy notice on the Department’s website. If you have any questions about privacy issues please contact: Privacy Contact Officer Department of Climate Change and Energy Efficiency GPO Box 854 Canberra ACT 2601 Phone: + 61 2 6159 7000 Website: www.climatechange.gov.au Intellectual Property Any entity that submits an application for endorsement of an application for variation of a methodology determination as part of the CFI warrants that they own or have a licence to use all of the relevant intellectual property rights in the application submitted. Copyright in this document vests in [applicant to insert the appropriate name]. Creative Commons licence All material in this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence. 2 Table of contents Instructions for applicants ...................................................................................................................... 4 Section 1: Methodology Determination Title and Applicant Details ...................................................... 6 Section 2: Expert consultation ................................................................................................................ 6 Section 3: Revised methodology determination glossary ...................................................................... 7 Section 4: Justification for variation ....................................................................................................... 7 Section 5: Explanation for variation ........................................................................................................ 9 Section 6: References............................................................................................................................ 32 Section 7: Appendices ........................................................................................................................... 32 Section 8: Disclosure ............................................................................................................................. 33 Section 9: Declaration ........................................................................................................................... 33 3 Instructions for applicants This template must be used to make an application for endorsement of a proposal to vary a methodology determination under section 116 of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act). Applicants should complete this form in accordance with Section 3.5 of the Guidelines for Submitting Methodologies. This form contains sections for applicants to provide: 1) details of the relevant methodology determination; 2) a general statement, including supporting evidence, outlining why the specified methodology determination should be varied; 3) supporting evidence to enable the Domestic Offsets Integrity Committee (DOIC) to assess whether the varied determination would comply with the offsets integrity standards prescribed in section 133 of the Act, and the requirements of the Carbon Credits (Carbon Farming Initiative) Regulations 2011 (the Regulations); 4) a copy of the methodology determination with the proposed variations clearly marked; and 5) justification, including supporting evidence, as to why each proposed variation should be made. If the application for variation is endorsed by the DOIC and subsequently approved by the Minister, it will be made into a revised methodology determination and registered on the Federal Register of Legislative Instruments. As the methodology determination is a legislative instrument, instructions must be clear, detailed and complete and all technical terms must be defined. Care must be taken to ensure the instructions are written so that there is little or no room for them to be misinterpreted. All proposed revisions must be set out in the table at Section 5 and accompanied by an explanation as to why the revision should be made, as well as supporting evidence to justify all assumptions, assertions and estimations. The inclusion of diagrams, graphics and flow charts is recommended to assist in the understanding of descriptions or statements. If an applicant wants any information to be exempt from public disclosure, the information must be clearly marked ‘CONFIDENTIAL’. An explanation of why this information should not be published during the public comment period must be provided in Section 8 of this form. Where the DOIC requires more information from an applicant on why the information should not be published, it may seek additional information from the applicant. A glossary of terms specific to the proposal for a revised methodology determination must be provided in this form. The definitions of terms in the methodology glossary must be consistent with definitions in the Act. 4 Applications for variation of a methodology determination must be made to: By post: DOIC Secretariat Department of Climate Change and Energy Efficiency GPO Box 854 CANBERRA ACT 2601 Or By email to: DOIC@climatechange.gov.au 5 Section 1: Methodology Determination Title and Applicant Details Methodology determination title and applicant details Title of the Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation— methodology 1.1) Methodology Determination 2013 determination that is the subject of the application: Specified date on which the methodology determination was made: 27 May 2013 Name of applicant: Anthony Fitzgerald Company: Carbon Conscious Ltd Position: Commercial Manager Telephone: 0400007749 Email: afitzgerald@carbonconscious.com.au Address: 26 Railway Rd Subiaco WA 6008 Postal address (if different to above): PO Box 1338, Subiaco, WA 6904 Section 2: Expert consultation Please provide the names and organisations of technical experts you have consulted in the development of this application. You must have permission from the expert individual or organisation to include their names prior to submitting this template. Name Organisation Does this expert endorse all or a part of the application for variation? (refer to relevant section if applicable) Dan Huxtable Equinox Environmental All 6 Section 3: Revised methodology determination glossary Provide an alphabetical glossary of terms that are specific to the application for variation of a methodology determination. Note that many terms are already defined in the Act, the Regulations and the Guidelines. Please refer to these documents before defining a new term. Please add more rows if required. Term Meaning of term Section 4: Justification for variation General statement of justification Outline the reasons why the methodology determination specified in Section 1 should be varied. All proposed variations will maintain the integrity of project CO2e measurement and accounting while significantly reducing measurement costs. And, Variation 1 The variation will allow an alternative that in some circumstances would result in reduced field measurement costs due to economies of scale. Variation 2 The variation would improve cost effectiveness by reducing the frequency at which allometric equations would need to be up-dated. Variation 3 The variation will put beyond doubt that stratum specific and regional allometric functions and allometric domains can be expanded during PSPAs as well as full inventories. It will also clarify that; appropriate trees to be selected for total destruction and addition to the function data, are trees to the upside of the previous upper limit of the allometric domain Variation 4 The variation will correct an anomaly and result in large scale projects being treated in the same manner as small scale projects. Variation 5 and Variation 6 The variation could result in a more conservative post growth disturbance / emission event ACCU calculation a but the cost savings will in most cases out way the loss of claimed ACCUs. 7 Please provide additional information to support the statements above. Include supporting evidence and justifications for any assumptions or estimations relied upon. Variation 1 – Initial Stratification Requirements: The current methodology prescribes that a stratum MUST only include an area where the initial planting occurred in a planting window of 180 days. This prevents amalgamation of multiyear plantings into a single stratum and can prevent an amalgamation that would deliver economies of scale. It is proposed to provide a Stratum definition that allows the option of including or not including a 180 planting window as a defining term of stratum. That is if a proponent chooses to a stratum can be defined to include a 180 day planting window or the proponent can choose a stratum definition that does not include the 180 day window. The variation will incorporate into this methodology a feature from Methodology Determination 2013 and Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation—1.2) Methodology Determination 2013. An example of missed opportunity for economies of scale can be demonstrated by two full inventories of E.Kochii plantations Carbon Conscious Ltd conducted in 2013. The stratum were homogonous by way of species and region but were stratified as 2009E.Kochii and 2010E.Kochii under the 180 day window definition. When the full inventories datum were combined for an ex post analysis, it was demonstrated that: 1. Instead of the 425 non destructive plots and 60 destructive trees required for the separated stratum, a survey of the area amalgamated would have required 225 non destructive plots and 45 destructive trees to arrive at calculated CO2e within the required PLE of 90:10%. 2. Field work costs would have been reduced from $120,000 to $70,000. Using the knowledge gained in 2013 it has been demonstrated at desk top level that in stratum yet to be measured, forests planted in 2009,2010,2011 could be amalgamated into a 750ha stratum. The amalgamation is forecast to reduce field work costs from $197,000 to $89,000. See attached Equinox Environmental paper ‘Ex Post Analysis of 2013 CFI Inventory’ 8 Variation 2 – Allometric Domains It is proposed to change the treatment of trees that have predictive variables greater than the allometric range. Currently the Methodology prescribes that when establishing an allometric function trees that have the lowest value and highest value predictive characteristic must be included in the sample that is destructively sampled. This lowest and highest value becomes the ‘allometric range’ for which the function is valid. It also prescribes that when trees outside the ‘allometric range’ are encountered they must be recorded as present and then attributed a zero biomass. It is proposed that rather than being allocated a zero biomass, these larger trees are allocated a biomass equivalent to trees at the high end of the allometric range. For example, if the allometric range is a stem diameter of 1-15cm, and a tree has a stem of 17cm, then the tree can be included in the results of the biomass survey as though it has a stem of 15cm. It is recognised that the existing treatment of trees under the minimum value serves a best practice and conservative approach. Given that relationship between predictive measures and biomass are not linear with an R2 of 1 it is also accepted that for the sake of being conservative that absolute predictions of the actual biomass of a tree with characteristics above the allometric range are not made. However, it seems unnecessarily conservative to assume that a tree that has grown to have a predictive characteristic above the range will have zero biomass or a biomass lower that a tree at the top end of the allometric range. It is proposed that in the case of trees with a predictive measure greater than the highest measure in the allometric range that ‘the tree characteristic should be recorded and the tree should be allocated the biomass equivalent of the largest tree in the allometric range’. The variation will still result in a conservative calculation of biomass (and subsequently CO2e), passes a law-of-biology reasonableness test, and allows proponents to take a commercial decision to trade a more conservative calculation (than would have been made if the allometric domain had been extended) for the cost of extending the allometric range. See attached Equinox Environmental paper ‘Ex Post Analysis of 2013 CFI Inventory’ 9 Variation 3 – Updating Regional Allometric Equations The proposed change is to clarify that an allometric function and allometric domain for a stratum specific or regional allometric function MAY be expanded while conducting a permanent sample plot assessment (PSPA) and to define the data set from which additional biomass trees will be selected. Stratum specific allometric functions will be established during the first full inventory of a stratum. Subsequently the function may be converted to a regional allometric function. The data set used to create the original allometric will include trees with the greatest predictive value at that time. It follows that when a proponent subsequently executed a PSPA that some trees will have grown and their predictive measurement will be above (outside) the allometric range. When a Full Inventory of PSPA is conducted and trees are found to have measurements outside the allometric domain the allometric function cannot be applied to that tree. The proponent has the choice of recording the tree as present and then attributed a zero biomass or updating the allometric function and domain. The Methodology describes the steps necessary to update allometric functions and domains but the wording is conflicting and it seems likely that an overuse of reference to previous sections rather than the description of required action have led to the original intent being lost. At 5.32(1)(b) the Methodology states the up-dating stratum specific functions technique as described relates to the update being completed as part of a Full Inventory. At 5.33 (7)(b) reference is made to converting PSPs into Biomass Sample Plots for the purpose of selecting trees for destructive sampling thereby prescribing that an allometric function and domain could be updated during a PSPA. And at 5.32(4) when referring to the way the minimum 10 biomass sample trees will be selected section 5.31 (4) describes that the smallest as well as largest tree from a data set must be selected. Given that the use of PSPAs are intended and that by the time a PSPA is conducted some trees will be above the allometric region limits, it follows that (while it may have been lost in drafting) the Methodology should allow allometric functions and domains to be updated during PSPAs as well as subsequent Full Inventories. It also follows that the trees of interest in updating the allometric would be trees with a characteristic range not previously in the range and that they will be trees above the previous range. Despite what seems the intent, the wording is unclear and leads to double loop conclusions. For example CCF asked the Clean Energy Regulator for its interpretation as to whether allometric equations and ranges can be updated during a PSPA. The CER agreed that they can be conducted during a PSPS but also concluded that the biomass sample trees could not come from the PSPs on the grounds that nothing can be done on a PSP that is not being done to the whole stratum (email exchange attached). CCF proposes that if a tree in a PSP becomes a biomass sample tree and is therefore not there to be measured in future PSPAs that any error will be to the conservative side. For example, removing the 10 largest trees from a full inventory that measured 8,641 trees in 2013 would have resulted in a reduction on 0.21% of calculated biomass or 36 ACCUs, and in another stratum where 3032 trees were measured the affect of not including the largest ten would have been a reduction of 0.41% in biomass or 24 ACCUs. An example of the processes of establishing stratum specific and regional allometric functions and domains is contained in the allometric report submitted by Carbon Conscious Ltd (CCF) with an offsets report in 2013 (appended). Having developed the functions and allometric range CCF is in a position to apply the function during PSPAs on stratum in the region provided that the measured trees are within the allometric domain of: species being E.Kochii, the trees are live standing, the tree size range is 0.27 – 21.0 dry kg of whole tree biomass, the number of stems is 1-10, and the equivalent stem diameter is 1.7-9.7cm. With a circa $70,000 spread in field work costs between a PSPA and full inventory one of the significant elements of the Methodology is the ability to conduct PSPAs in the intermittent years between full inventories at 5 year intervals. The inconvenient truth for CCF (or any proponent) is that with each passing year of executing PSPAs more and more trees will be above the allometric 10 range. It follows that a proponent must therefore not apply the function to trees with measurement above the upper limit or update the allometric function and domain to include trees of the size not previously included. In years when a proponent had just completed the non destructive measurements of trees in PSPs with the intention of using a PSPA to support an offset report the most cost effective way to expand the allometric function and domain would be to rank the measured trees, select no less than 10, have them destructively sampled, add the data to the original data, refit the function, and redefine the allometric domain. Currently the prescribed selection of additional biomass sample trees is to: rank all trees from smallest to largest, divide into 5 size categories, select the smallest and largest, and pseudorandomly select the remainder so each category is appropriately represented. Based on the trees measured in the 2013 CCF allometric report (attached), if this was applied the result would be that 8 of the selected trees would be of a size already within the allometric domain with only 2 delivering additional knowledge. With the purpose being to expand the allometric function and extend the domain, the appropriate ranking of trees and selection of a minimum 10 for destructive sampling is therefore marginally different to that used when the original allometric definitions were established. Trees measured in the PSPA or full inventory that have a predictive measure within the existing domain would be excluded, and those above the existing domain would be recorded in a sub-set. The trees in the subset would be ranked from smallest to largest and divided into 5 size categories. Of the ranked and divided sub-set data: the smallest and largest would be selected with the remainder pseudo-random selected resulting in data from a minimum 10 trees outside the previously established and tested domain. The selected trees would then be destructively sampled and the data added to the previous allometric function data set – function expanded and new allometric domain defined. See Equinox Allometric Report 2013 Offset Report CCF CFI Project 11 Variation 4: The methodology prescribes action if a growth disturbance affects the lesser area of 10ha or 5% of a project area(s). An event that triggers the threshold will require expensive action (for example if the event was a fire the methodology prescribes that within 6 months a full inventory be conducted of both the affected area and non affected area. While a lesser of 10ha or 5% area event may be significant in terms of a small stratum (less than 200ha), a 10ha event is not significant in terms of the loss of captured CO2e on larger scale project areas. It is proposed that the area defined as the action threshold relating to a growth disturbance or significant emission be redefined so that the same proportion (5% of the area) of a project is the threshold no matter the scale of the project. The following examples where in 2014 sequestered CO2e is assumed 13mt/ha and in 2016 28mt/ha demonstrate of various the inconsistency in treatment of large scale projects (box 1 and 2). By using a ‘lesser than 10ha or 5% of area’ threshold once a project is over 200ha the threshold becomes 10ha. In the examples Project 1 is 200ha and if in 2014 or 2016 10ha were affected and all previously sequestered CO2e lost, the loss represents only 50% of the statistical variation (10%PLE) and 5% of the absolute total. The inconvenient truth is that given the administrative costs of the CFI projects of 200ha will not be a reality so the impacts of the threshold on larger areas need consideration. As project area increases the proportionate impact falls to such a level that the impact of a 10ha event is not material. Losing 10ha from the: ο· 2,000ha project means the loss would be 0.5% of the area and therefore represent 0.5% of ACCUs and the loss represents 5% of the allowable PLE. ο· 6,000ha project means the loss would be 0.2% of the area and therefore represent 0.2% of ACCUs and the loss represents 2% of the allowable PLE. As such the existing hurdle definition is disproportionately skewed against large scale stratum. If the trigger threshold was redefined to be ‘an area of 5% or more of a project area(s) then while the absolute ACCU loss increases as project size increases the loss in terms of a percentage of allowable PLE remains constant at 50% (far right section of boxes 1 and 2). Box 1: Calculation Affect Loss of 10ha or 50ha or 5%ha in 2014 Area ACCUs 10% 10ha as ACCUs Loss as Stratum ha 2014 PLE % Area Loss 10ha % PLE Project 1 200 2,600 260 5.0% 130 50% Project 2 500 6,500 650 2.0% 130 20% Project 3 1,000 13,000 1,300 1.0% 130 10% Project 4 2,000 26,000 2,600 0.5% 130 5% Project 5 6,000 78,000 7,800 0.2% 130 2% Project 6 8,000 104,000 10,400 0.1% 130 1% Box 2: Calculation Affect Loss of 10ha or 50ha or 5%ha in 2016 Area ACCUs 10% 10ha as ACCUs Loss as Stratum ha 2016 PLE % Area Loss 10ha % PLE Project 1 200 5,600 560 5.0% 280 50% Project 2 500 14,000 1,400 2.0% 280 20% Project 3 1,000 28,000 2,800 1.0% 280 10% Project 4 2,000 56,000 5,600 0.5% 280 5% Project 5 6,000 168,000 16,800 0.2% 280 2% Project 6 8,000 224,000 22,400 0.1% 280 1% 50ha as ACCUs Loss as % Area Loss 50ha % PLE 10% 5% 3% 1% 1% 650 650 650 650 650 100% 50% 25% 8% 6% 50ha as ACCUs Loss as % Area Loss 50ha % PLE 10% 5% 3% 1% 1% 1,400 1,400 1,400 1,400 1,400 100% 50% 25% 8% 6% 5% as ha 10 25 50 100 300 400 ACCUs Loss 5%ha 130 325 650 1,300 3,900 5,200 Loss as % PLE 50% 50% 50% 50% 50% 50% 5% as ha 10 25 50 100 300 400 ACCUs Loss 5%ha 280 700 1,400 2,800 8,400 11,200 Loss as % PLE 50% 50% 50% 50% 50% 50% See also CCF Managing CO2e Reversal Events 12 Variation 5: Note*: If variation 4 is executed, the threshold of 10ha referred to in this proposed variation will be replaced by 5% of the area(s). Currently the methodology prescribes action that MUST be taken in the event of a Growth Disturbance Event that is a fire affecting more than 10ha, including: 1) The fire-affected and non-affected parts of the stratum must be mapped and 2 new stratums defined. 2) A full inventory must be conducted on both the fire-affected and non-affected within 12 months. 3) In the case of the fire-affected stratum a. an estimate of the fire emissions from any fire affected stratum, and the standard error associated with this estimate, must be calculated in accordance with Equations 26a to 27d; and b. for the purposes of calculating carbon stock changes and standard error for carbon stock change in accordance with Equations 3a and 3c, the carbon stocks and the standard error for initial carbon stocks must be assumed to be zero for the fire affected stratum. The issues with the current tightly defined action are that it ignores the reality that: 1. In the majority of cases the most economically rational treatment of the affected area would be to assume zero sequestered CO2e on the affected area for at least some years after the event (cost of measuring the residual greater than value of residual) until the stand recovers. 2. It would be possible and more efficient to calculate the ACCUs on the unaffected area by conducting a permanent sample plot assessment (PSPA) as opposed full inventory. The proposed variation retains the option of the current approach and introduces the option of taking an approach that is more conservative and will arrive at a post event position where less ACCUs are claimed. Having the alternatives would allow a proponent to assess whether the marginal extra cost of a full inventory against a PSPA (in order of $50-80,000) will be met by adopting the current approach and calculating maximum ACCUs, or whether (as will most often be the case) that the more conservative approach of less ACCUs but lower costs will maximise economic outcome. 13 Variation 5 (continued): It is proposed that when a project area(s) is affected by a growth disturbance or significant emission event, when that event was a fire, and the event affects an area greater than 10ha* but not the entire project area(s) that a proponent MAY adopt the existing practices or May adopt the following actions: 1. The fire-affected area will be mapped and a new ‘fire-affected’ stratum will be created. 2. Until the next full inventory the area of the non-affected stratum will be calculated as the pre-event area less that area mapped into the fire-affected stratum. 3. A PSPA must be conducted on the non-affected stratum within 12 months thereby identifying the total carbon stocks on the non-affected area. 4. The total carbon stock on the fire-affected stratum at the time of the event will be calculated by dividing the total carbon stock at the last pre-event offset report and multiplying by the area of the fire-affected stratum and dividing by the area of the pre-event stratum. 5. The results from point 4 can be used in equations 26a-27d to calculate the CO2e emitted.1 6. The carbon stock on the fire-affected area will be assumed to be zero. 7. When the offsets report based and claim for ACCUs based on the PSPA of the non affected area(s) are submitted the claim for ACCUs for the Project will be calculated as A = B – C – D where: A is the number of ACCUs being claimed, B is the cumulative CO2e on the non affected stratum as calculated in the PSPA, C is the cumulative CO2e (ACCUs) claimed previously, D is the amount of CO2e calculated as emitted a result of the fire event. 8. The next full inventory on the non-affected stratum MUST be conducted not later than 5 years post the full inventory conducted before the event and MAY be conducted earlier. 9. In years subsequent to the event the CO2e stocks of the fire-affected stratum MUST be deemed to be zero until such time as: a. A full inventory is conducted on the fire-affected stratum, or b. The fire-affected area is reincorporated back into the non-affected area and a full inventory is conducted on the re-amalgamated stratum. A case study of the cost/benefits of the proposed variation is appended “CCF-Case Study of Proposed Variation 5 and 6” 1 Effectively until the next Full Inventory on the affected area MPC stratum ,j,Ri in Equation 26a will be zero. 14 Variation 6 This proposed variation is similar to variation 5 the difference being that it would apply to growth disturbances that are not fire events. Effectively the only difference in the proposal will be that there will not be a need to calculate emissions from a fire. Note*: If variation 4 is executed, the threshold of 10ha referred to in this proposed variation will be replaced by 5% of the area(s). Currently the methodology prescribes action that MUST be taken in the event of a Growth Disturbance Event (with the event being other than a fire) affecting more than 10ha, including: 1. The affected and non-affected parts of the stratum must be mapped and 2 new stratums defined. 2. For the purposes of calculating carbon stock changes and standard error for carbon stock change in accordance with Equations 3a and 3c, the carbon stocks and the standard error for initial carbon stocks must be assumed to be zero for the affected stratum. The Methodology is silent on the timing of the full inventories but given the section on the treatment of disturbances that are fire it seems implied that as in the case of a fire event it would be within 12 months. The issues with the current tightly defined action are that it ignores the reality that: 1. In the majority of cases the most economically rational treatment of the affected area would be to assume zero sequestered CO2e on the affected area for at least some years after the event (the cost of measuring the affected area greater than value on affected area) until the stand recovers. 2. It would be possible and more efficient to calculate the ACCUs on the unaffected area by conducting a permanent sample plot assessment (PSPA) as opposed full inventory. The proposed variation retains the option of the current approach and introduces the option of taking an approach that is more conservative and will arrive at a post event position where less ACCUs are claimed. Having the alternatives would allow a proponent to assess whether the marginal extra cost of a full inventory against a PSPA (in order of $50-80,000) will be met by adopting the current approach and calculating maximum ACCUs, or whether (as will most often be the case) that the more conservative approach of less ACCUs but lower costs will maximise economic outcome. 15 Variation 6 continued It is proposed that when a project area(s) is affected by a growth disturbance when that event was not a fire, and the event affects an area greater than 10ha* but not the entire project area(s) that a proponent MAY adopt the existing practices or May adopt the following actions: 1. The affected area will be mapped and a new ‘affected’ stratum will be created. 2. Until the next full inventory the area of the non-affected stratum will be calculated as the preevent area less that area mapped into the affected stratum. 3. A PSPA must be conducted on the non-affected stratum within 12 months thereby identifying the total carbon stocks on the non-affected area. 4. The total carbon stock on the affected stratum at the time of the event will be calculated by dividing the total carbon stock at the last pre-event offset report and multiplying by the area of the affected stratum and dividing by the area of the pre-event stratum. 5. The carbon stock on the affected area will be assumed to be zero. 6. When the offsets report based and claim for ACCUs based on the PSPA of the non affected area(s) are submitted the claim for ACCUs for the Project will be calculated as A = B – C where: A is the number of ACCUs being claimed, B is the cumulative CO2e on the non affected stratum as calculated in the PSPA, C is the cumulative CO2e (ACCUs) claimed previously. 7. The next full inventory on the non-affected stratum MUST be conducted not later than 5 years post the full inventory conducted before the event and MAY be conducted earlier. 8. In years subsequent to the event the CO2e stocks of the affected stratum MUST be deemed to be zero until such time as: a. A full inventory is conducted on the affected stratum, or b. The affected area is reincorporated back into the non-affected area and a full inventory is conducted on the re-amalgamated stratum. The case studies supporting variation 5 are relevant to this variation. 16 Section 5: Explanation for variation Please list each section, subsection and paragraph of the methodology determination that you propose to vary and each proposed variation. You must provide an explanation as to why each proposed variation should be made. Please add more rows if required. Section Subsection/ Paragraph Proposed variation Part 3 3.2 VARIATION 1 Explanation Since submitting and operating under V1.1 REPLACE THE SECTION AS WORDED: Carbon Conscious has 3.2 Requirements for a stratum observed: that it is not (1) A stratum is made up of: uncommon for the (a) an extant project forest area; and variance within a stratum (b) the area of land that lies within the crown radius of the extant project forest area defined by a single year is specified in (a). as great as the variance (2) The extant project forest area of a stratum must have been planted with one or more would be if stratum with species of project trees within the planting window. other common Note Project proponents may further define strata based on any of the following: characteristics but – the planting window different planting years – observed or measured growth trends; were combined so that – growing regions; – climatic conditions; planting year was not – soil types; considered in – disturbance history; stratification. The – land management units; amendment would not – management regime; or – any other characteristics that may be likely to influence project tree growth. reduce the validity of inventory measurement conducted (statistical tests will ensure enough plots are measured) but the amendment will make a material difference to the cost of inventory measurement. 17 WITH THE WORDS FROM V1.2 AS FOLLOWS 3.2 Minimum requirement for a stratum A stratum must have been planted with one or more species of project trees. Note Project proponents may also define a stratum based on any of the following: – project tree age with trees being planted within the planting window; – tree species; – observed or measured growth trends; – growing regions; – climatic conditions; – soil types; – disturbance history; – land management units; – management regime; or – any other characteristics that may be likely to influence project tree growth. Further, the methodologies Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation—1.1) Methodology Determination 2013 and Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation—1.2) Methodology Determination 2013 are not materially different. The requested variation is copied from determination: Carbon Credits (Carbon Farming Initiative) (Reforestation and Afforestation—1.2) Methodology Determination 2013. 18 Part 6 6.12 REPLACE THE SECTION AS WORDED: Again the words from Carbon Credits (Carbon Farming Initiative) Subdivision 6.2.3 Calculating initial carbon stocks for a stratum (Reforestation and Afforestation—1.1) 6.12 Calculating initial carbon stocks for a stratum Methodology (1) For a stratum that is composed of project trees planted on or after the declaration Determination 2013. date: Are replaced with those (a) the initial carbon stocks for the stratum (ICStratum,j) is zero; and from (b) the standard error for the initial carbon stocks for the stratum (SEICStratum,j) is Carbon Credits (Carbon zero. Farming Initiative) (2) For a newly created stratum that is entirely composed of project trees planted (Reforestation and before the declaration date and previously referenced in an offsets report under an Afforestation—1.2) alternative stratum identifier: Methodology (a) the initial carbon stocks for the newly created stratum (ICStratum,j) is zero; and Determination 2013. (b) the standard error for the initial carbon stocks for the newly created In this instance the key change is a replacement stratum (SEICStratum,j) is zero. of the planting FINISH (3) For a stratum that is partially composed of project trees planted before the date with planting START declaration date and that have been referenced in an offsets report, the calculation date when calculating the of the initial carbon stocks for the stratum must: initial stocks in stratum (a) be carried out in accordance with Equation 4a; and where planting commences before the (b) incorporate a standard error calculation in accordance with Equation 4b. Declaration date. The (4) For a stratum that is entirely composed of project trees planted before the effect of the change is to declaration date that have not previously been referenced in an offsets report, the make the amended calculation of the initial carbon stocks for the stratum must: calculation more (a) be carried out in accordance with Equation 4a; and conservative in that a lesser amount of CO2e (b) incorporate a standard error calculation in accordance with Equation 4b. will be calculated, however proponents will be in a better financial 19 πΌπΆππ‘πππ‘π’π,π πΆπΆππ‘πππ‘π’π,π,π π = × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π Equation 4a where: πΌπΆππ‘πππ‘π’π,π = initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). πΆπΆππ‘πππ‘π’π,π,π π = closing carbon stocks for the πth stratum for reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equation 5a. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum for reporting period π π, calculated as the difference in absolute years between the planting finish date and the date for reporting period π π. ππΆπΉπΌ,π = difference in absolute years between the planting finish date for the πth stratum and the declaration date. ππΈπΌπΆππ‘πππ‘π’π,π = ππΈπΆπΆππ‘πππ‘π’π,π,π π × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π position due to the cost savings that will result from the economies of scale by combining stratum across planting years. Equation 4b where: ππΈπΌπΆππ‘πππ‘π’π,π = standard error for initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). ππΈπΆπΆππ‘πππ‘π’π,π,π π = standard error for closing carbon stocks for the πth stratum for reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equations 5b and 6b. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum at the end of reporting period π π, calculated as the difference in absolute years between 20 the planting finish date and the date at the end of reporting period π π. difference in absolute years between the planting finish date for the πth stratum and the declaration date. ππΆπΉπΌ,π = WITH THE WORDS AS FOLLOWS Subdivision 6.2.3 6.12 Calculating initial carbon stocks for a stratum will differ according to whether or not the stratum definition included a planting window. Calculating initial carbon stocks for a stratum when planting window IS included in the stratum definition. (1) For a stratum that is composed of project trees planted on or after the declaration date: (a) the initial carbon stocks for the stratum (ICStratum,j) is zero; and (b) the standard error for the initial carbon stocks for the stratum (SEICStratum,j) is zero. (2) For a newly created stratum that is entirely composed of project trees planted before the declaration date and previously referenced in an offsets report under an alternative stratum identifier: (a) the initial carbon stocks for the newly created stratum (ICStratum,j) is zero; and (b) the standard error for the initial carbon stocks for the newly created stratum (SEICStratum,j) is zero. (3) For a stratum that is partially composed of project trees planted before the declaration date and that have been referenced in an offsets report, the calculation of the initial carbon stocks for the stratum must: (a) be carried out in accordance with Equation 4a; and (b) incorporate a standard error calculation in accordance with Equation 4b. (4) For a stratum that is entirely composed of project trees planted before the 21 declaration date that have not previously been referenced in an offsets report, the calculation of the initial carbon stocks for the stratum must: (a) be carried out in accordance with Equation 4a; and (b) incorporate a standard error calculation in accordance with Equation 4b. πΌπΆππ‘πππ‘π’π,π = πΆπΆππ‘πππ‘π’π,π,π π × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π Equation 4a where: πΌπΆππ‘πππ‘π’π,π = initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). πΆπΆππ‘πππ‘π’π,π,π π = closing carbon stocks for the πth stratum for reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equation 5a. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum for reporting period π π, calculated as the difference in absolute years between the planting finish date and the date for reporting period π π. ππΆπΉπΌ,π = difference in absolute years between the planting finish date for the πth stratum and the declaration date. ππΈπΌπΆππ‘πππ‘π’π,π = ππΈπΆπΆππ‘πππ‘π’π,π,π π × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π Equation 4b where: ππΈπΌπΆππ‘πππ‘π’π,π = standard error for initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). ππΈπΆπΆππ‘πππ‘π’π,π,π π = standard error for closing carbon stocks for the πth stratum for 22 reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equations 5b and 6b. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum at the end of reporting period π π, calculated as the difference in absolute years between the planting finish date and the date at the end of reporting period π π. ππΆπΉπΌ,π = difference in absolute years between the planting finish date for the πth stratum and the declaration date. 6.12 Calculating initial carbon stocks for a stratum when planting window IS NOT included in the stratum definition (1) For a stratum that is composed of project trees planted on or after the declaration date: (a) the initial carbon stock for the stratum (ICStratum,j) is zero; and (b) the standard error for the initial carbon stock for the stratum (SEICStratum,j) is zero. (2) For a newly created stratum that is entirely composed of project trees planted before the declaration date and previously referenced in an offsets report under an alternative stratum identifier: (a) the initial carbon stocks for the newly created stratum (ICStratum,j) is zero; and (b) the standard error for the initial carbon stocks for the newly created stratum (SEICStratum,j) is zero. (3) For a stratum that is partially composed of project trees planted before the declaration date and that have been referenced in an offsets report, the calculation of the initial carbon stocks for the stratum must: (a) be carried out in accordance with Equation 4c; and 23 (b) incorporate a standard error calculation in accordance with Equation 4d. (4) For a stratum that is entirely composed of project trees that have been planted before the declaration date and that have not previously been referenced in an offsets report, the calculation of the initial carbon stocks for the stratum must: (a) be carried out in accordance with Equation 4c; and (b) incorporate a standard error calculation in accordance with Equation 4d. (5) The initial carbon stocks for a stratum specified in subsection (4) must be calculated using the following formula: πΌπΆππ‘πππ‘π’π,π = πΆπΆππ‘πππ‘π’π,π,π π × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π Equation 4c Where: πΌπΆππ‘πππ‘π’π,π = initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). πΆπΆππ‘πππ‘π’π,π,π π = closing carbon stocks for the πth stratum for reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equation 5a. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum for reporting period π π, calculated as the difference in absolute years between the planting start date and the date for reporting period π π. ππΆπΉπΌ,π = difference in absolute years between the planting start date for the πth stratum and the declaration date. (6) When calculating the initial carbon stocks for a stratum specified in subsection (4), the standard error must be calculated for the current reporting period (π π) using the following formula: ππΈπΌπΆππ‘πππ‘π’π,π = ππΈπΆπΆππ‘πππ‘π’π,π,π π × ππΆπΉπΌ,π π΄ππππ‘πππ‘π’π,π,π π Equation 4d 24 Where: ππΈπΌπΆππ‘πππ‘π’π,π = standard error for initial carbon stocks for the πth stratum, in tonnes of CO2-e (t CO2-e). ππΈπΆπΆππ‘πππ‘π’π,π,π π = standard error for closing carbon stocks for the πth stratum for reporting period π π in tonnes of CO2-e (t CO2-e), calculated in accordance with Equation 5b or 6b as appropriate. π π = first reporting period for the πth stratum, as a calendar date. π΄ππππ‘πππ‘π’π,π,π π = age of project trees in the πth stratum at the end of reporting period π π, calculated as the difference in absolute years between the planting start date and the date at the end of reporting period π π. ππΆπΉπΌ,π = difference in absolute years between the planting start date for the πth stratum and the declaration date. 25 VARIATION 2 5 5.23 (2) (c) REMOVE THE WORDS (c) An allometric function must be applied only to project trees that occur within the allometric domain for that allometric function. AND REPLACE WITH THE WORDS (c) and ADD THE WORDS (d) Inserts words that allows allometric to be conditionally applied to trees with measurement above max in allometric domain (c) An allometric function may be applied to project trees that occur within or above the upper limit of the allometric domain for that allometric function, if (d) The predictive measure of a project tree is above the upper limit of the allometric domain that tree is to be attributed the same result as a tree at the upper limit of the allometric domain. 5 5.24 (3) REMOVE THE WORDS (3) To avoid doubt, an allometric function must not be used if the information requirements specified in subsection (1) cannot be met. AND REPLACE WITH THE WORDS (3) To avoid doubt, an allometric function must not be used if the information requirements specified in subsection (1) (i) and (1) (ii) cannot be met. Clarification that allometric function can be applied if some trees have predictive measures greater than the top end of the allometric range (4) To avoid doubt, if the predictive measure of a tree is greater than the upper limit of the allometric domain that tree is to be attributed the same result as a tree at the upper limit of the allometric domain. 5 5.41 ADD THE WORDS (e) To avoid doubt, if predictor measures collected from the project tree during the full inventory or PSP assessment DO exceed the allometric data range the allometric function is applicable if trees above the allometric domain are treated according to 5.23 (2) c and d. Allows allometric function applicability test to be passed with given conditions. 26 VARIATION 3 5 5.32 ADD THE WORDS The section clarifies that it now incorporates (9) This section applies where a stratum specific function: updating a stratum (a) has been developed in accordance with section 5.31; and specific allometric using biomass sample tree data (b) is being updated as part of a PSP assesment. sourced during a PSP (10) A project proponent must create a data subset by selecting from the PSP assessment in addition to assessment data set the identifiers of trees that returned a predictive measure the original update greater than the upper limit of the existing allometric domain. during a full inventory. (11) From the data subset at (10) subject to (12) biomass sample trees must be selected The variation means that in accordance with 5.31 (3) to (8). the same processes will (12) From the data subset at (10) least 10 biomass sample trees must be selected. be carried out as (13) The data collected from the biomass sample trees in accordance with previously but it is now subsections (10) to (12) must be combined with the allometric dataset used to possible to use PSP develop the original stratum specific function. assessment data and trees in addition to the Updated regression function previous TSP trees during (14) The processes specified in sections 5.25, 5.27 and 5.28 must be applied to the a Full Inventory. allometric dataset that has been combined in accordance with subsection (13). (15) In the case where the minimum regression fit requirements specified in subsection 5.27(3) are met, the updated stratum specific function may be applied within the stratum from which the allometric dataset was derived without applying the validation process specified in section 5.42. (16) In the case where the minimum regression fit requirements specified in subsection 5.27(3) are not met, the project proponent may develop a new stratum specific function by combining the dataset collected from the biomass sample trees assessed at subsections (9) to (12) with a minimum of at least a further 10 biomass sample trees assessed. 27 5 5.33 ADD THE WORDS (15) When a proponent conducts a full inventory or a PSP assessment and encounters project trees with predictor measurements greater than the upper end of the allometric domain of a regional function the regional function may be updated in accordance with 5.31. Clarifies that a regional function and allometric domain can be updated and extended following the techniques relevant to updating and extending stratum specific functions and domains. 28 VARIATION 4 3 3.4 (3) EDIT SO THAT ABSOLUTE 10HA IS REPLACED WITH A DEFINITION OF 5% OF HECTARES (3) If the growth disturbance affects an area of more than 5% of the hectares in a stratum, the project proponent must, before submitting the offsets report that relates to the time when the growth disturbance occurred, revise the affected stratum in accordance with this section. (4) If the growth disturbance affects an area of 5% of the hectares or less in a stratum, the project proponent may, before submitting the offsets report that relates to the time when the growth disturbance occurred: 3.4 (4) Allows redefinition as per application VARIATION 5 and 6 3 3.4 (6) EDIT AS FOLLOWS (6) 3 3.4 (7) Clarifies that only If only a part of the stratum is affected by the growth disturbance, then the stratum is affected area must be revised by mapping and excising that portion of the stratum affected by the growth mapped disturbance and defining this area as a separate stratum which: ADD THE WORDS Clarifies that proponent can elect to assume (b) the carbon stocks and the standard error for ongoing carbon stocks must be affected area has zero assumed to be zero for the disturbance affected stratum until: CO2 if measurement of (i) such time as a full inventory is conducted on the disturbance affected small amount deemed stratum or; economically irrational (ii) the disturbance affected stratum can be demonstrated to have characteristics that qualify the area to be returned to the unaffected stratum and a full inventory is conducted on the re-amalgamated stratum; and (iii) if a full inventory or re-amalgamation of the affected stratum is not completed within 5 years of the event the affected stratum must be removed from the project. 3 3.4 (8) EDIT AS FOLLOWS Introduces an alternative 29 to a full inventory (a) a full inventory may be conducted in both the fire affected stratum and the stratum from which the fire affected stratum was excised, within 12 months after the fire event 3 3.4 (8) 6 6.36 (1) ADD THE WORDS Confirms a full inventory or PSP assessment (b) if a full inventory is not conducted on the fire affected stratum 7(b) applies: available to proponent (c) a PSP of full inventory assessment must be conducted on the non affected stratum, and defines how the area within 12months after the fire event; of the non affected area (i) If a PSP assessment is undertaken the area of the non affected stratum will be will be defines in terms of area without the need to defined as the area of the pre-event stratum less the area mapped as affected. remap before the next full inventory is conducted. (b) the fire event exceeds the area threshold of 5% of project area(s) hectares; Changed to incorporate variation 4 6.36 (1) (d) an inventory is conducted in both the fire-affected and non-fire-affected strata within 12 months of the date of the fire event in accordance with section 3.4. If variation 5 and 6 adopted a PSPA may be executed on non affected and the affected may be ignored with assumption zero carbon stock Equation 26a If full inventory of fire affected area conducted mean plot carbon stocks for plots within fire affected stratum π for reporting period π π in tonnes per hectare of CO2-e (t.ha-1 CO2-e), calculated in accordance with Equation 11a or if full inventory of fire affected area not conducted assumed to be zero. Alternative of calculating emissions if full inventory of affected conducted ort not conducted 30 Please provide any additional information to support the explanations provided above. Include supporting evidence and justifications for any assumptions or estimations relied upon. Deliberately left blank. Matters covered in previous sections and attachments. 31 Section 6: References Provide a full citation for all reports, papers and journal articles cited in this application. Huxtable D, 2014 CFI exβpost analysis of 2009β2010E. kochii Inventory, unpublished report for CCF. Huxtable D, 2013 Allometric Report, unpublished report submitted as part of 2013 CCF Offsets Report on CFI Project. Fitzgerald A, 2014 Managing CO2e Reversal Events V1.2, unpublished based on CCF 2013 full inventory analysis. Fitzgerald A, 2014, Case Study Supporting Proposed Variation 5 and 6, unpublished based on modelling results of 2013 full inventory and forecast outcomes of full inventories or PSPA. Pers. Comm Anthony Fitzgerald and Clean Energy Regulator emails updating allometric domain. Peck A, Sudmeyer R, Huxtable D, Bartle J & Mendham D 2012, Productivity of Mallee Agroforestry Systems: The effect of harvest and competition management regimes, RIRDC Publication No 11/162; Rural Industries Research and Development Corporation, Canberra. K. Paul et al. 2013, Improved estimation of biomass accumulation by environmental planting and mallee plantings using FullCAM, Report for The Department of the Environment, CSIRO Sustainable Agriculture Flagship, Canberra, Australia. Section 7: Appendices List below and append all relevant documentation necessary to assess this application, including cited reports, papers and journal articles that are not publically available. Applicants must attach a copy of the relevant methodology determination with the proposed variations clearly marked. 32 Section 8: Disclosure Clearly identify documents or parts of documents included as supporting information to the submission that are marked CONFIDENTIAL and should not be published. Confidential information must not be included in any of the sections of this form. Provide a reason why the document or part of document should not be published. Acceptable justification would include that the information should not be published if it reveals, or could be capable of revealing: ο· trade secrets; or ο· any other matter having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed. Document/part of document Reason for confidentiality Section 9: Declaration This application must be signed by a duly authorised representative of the applicant. The person signing should read the following declaration and sign below. Division 137 of the Criminal Code makes it an offence for a person to give information to a Commonwealth entity if the person providing the information knows that the information is false or misleading. The maximum penalty for such an offence is imprisonment up to 12 months. By signing below, the signatory acknowledges that he or she is an authorised representative of the applicant, and that all of the information contained in this application is true and correct. The signatory also acknowledges that any of the information provided in this application may be copied, recorded, used or disclosed by the Department of Climate Change and Energy Efficiency for any purpose relevant to the CFI. Information will not be publicly disclosed by the Department where it has been identified as confidential by the applicant. Full name of the person signing as representative of the applicant Anthony Irwin Fitzgerald Position Commercial Manager Signature Date 33