The Emissions Reduction Fund (ERF) legislation has a regulatory additionality requirement, which is intended to ensure that ERF projects (activities) to reduce emissions or sequester carbon do not receive Australian Carbon Credit Units (ACCUs) if those activities are already required by law.
The CER has developed
guidance on how it will assess and implement regulatory additionality for the ERF.
In summary the Clean Energy Regulator takes the view that regulatory additionality will be met if:
Whether a project meets the regulatory additionality requirements will depend on the circumstances and will be assessed by the Clean Energy Regulator on a case-by-case basis.
Regulatory requirements be expressed as general requirements in documents that are adopted by or under a law, such as State or Territory guidelines that apply to a particular industry sector or activity, and do not have to relate to a particular project.
Regulatory requirements may be contained in a number of forms, including but not limited to:
When applying to have an Emissions Reduction Fund project registered, you will be asked whether the project, or any part of it, is required to be carried out by or under a law of the Commonwealth, a State or a Territory or was mandatory under a Commonwealth, State or Territory that was repealed or amended so as not to be required from 24 March 2011.
Your answer to this question should be 'Yes' if:
Here are some examples of how the regulatory additionality requirements are expected to operate.
The following projects are unlikely to meet the first regulatory additionality requirement:
However, there are circumstances that will be assessed on their merits by the Clean Energy Regulator:
If the law prescribes a specific activity, but the scale of activity outlined in the Emissions Reduction Fund project clearly goes above and beyond what was required to comply with the law. The following projects are not likely to meet the second regulatory additionality requirement:
Some projects that include activities also carried out under specified Commonwealth, state or territory government program or schemes may be excluded from participating in the Emissions Reduction Fund. This is intended to ensure that emissions reductions are not incentivised under the Emissions Reduction Fund if the projects have received incentives under another government program.
Projects are able to source funding or in-kind support from other government programs in some cases. It is not the Government's intention to prevent participants from obtaining funding or in-kind support from multiple sources. For example, the Government anticipates that environmental planting projects could receive assistance from the Green Army, fire management projects may involve rangers involved in Indigenous ranger programs and some energy efficiency projects may receive funding assistance through investment schemes run by the Clean Energy Finance Corporation and Australian Renewable Energy Agency.
The table below provides a high-level overview of the additionality requirements and associated government program specified in the rule. Full details of excluded activities is included in
section 21 of the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the rule). If the government program your Emissions Reduction Fund project receives funding from is not listed below and your project does not contain certain activities under a government program listed below, then your project is not excluded from participation in the Emissions Reduction Fund under the ‘government program requirement’ provisions.
Activities included in an Emissions Reduction Fund project may expand on a non-Emissions Reduction Fund project that has previously been funded by a government program specified above , but must not currently receive funding from those government programs listed above.
The excluded activities specified above may be included in an Emissions Reduction Fund project if:
The Clean Energy Regulator will require participants to make a statement about support from other government programs as part of their application for project registration. If a project subsequently breaches the government program requirements you must notify the Clean Energy Regulator in:
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