Industrial and Waste Methods
The Carbon Credits (Carbon Farming Initiative – Industrial Electricity and Fuel Efficiency) Methodology Determination 2015 (the Method) covers a broad range of electricity and fuel efficiency activities including lighting upgrades, heating, ventilation and cooling system upgrades, boiler upgrades, and variable speed drive installation.
How industrial and waste methods works
An industrial electricity and fuel efficiency project may undertake activities to reduce emissions from equipment that consumes electricity or fuel. The method is based on comparing emission levels before and after project activities have been implemented.
Before implementing an industrial and waste methods project activities participants must develop a baseline emissions model using statistical regression analysis. This model estimates what emissions levels would have been if the project had not gone ahead. After implementing project activities participants have the option of directly measuring fuel and electricity consumption, or developing an operating emissions model using statistical regression analysis to estimate emissions from the project. The method outlines how to develop emissions models. Participants can group together different activities into a single project, or establish activities as standalone projects.
The following requirements need to be met to ensure a project is eligible under this method.
- Each industrial electricity and fuel efficiency project must consist of one or more eligible activities involving existing equipment for which baseline data can be obtained.
- Activities undertaken for the project must not have commenced before the project is registered.
- Participants have the choice of receiving funding or support for their activities either under the Emissions Reduction Fund or other government programmes.
- Activities undertaken for the project cannot be required by law.
Analysis of contracted volume under the ERF shows that, as at the end of October 2019, a total of 220 projects have been contracted under the 8 successful ‘Industrial’ methodologies. The bulk of these have come from just five industrial and waste methods:
- Landfill Gas – 49 projects – 21.4 million ACCUs contracted
- Waste Coal Mine Gas – 6 projects, 2.9 million ACCUs contracted
These projects are displacement electricity production projects that install and operate electricity production devices to capture and combust the methane component of coal mine waste gas.
- Alternative Waste Treatment – 11 Projects – 3.62 Million ACCUs contracted
These projects divert mixed solid waste from landfills to a waste treatment facility and processes that produce a combustible fuel substitute.
- Public Lighting Upgrade – 4 Projects – 2.7 million ACCUs
- Industrial Electricity and Fuel Efficiency (IEFE) – 10 Projects – 2.5 million ACCUs contracted
This Determination targets abatement from the millions of tonnes of organic waste which currently goes to landfill. To achieve this, the method incentivises activities which separate organic material from waste at the point of generation and divert it away from landfill. This waste is then treated by eligible alternative treatments (such as composting and biodigestion).
The Determination also provides opportunities for charities to be credited for abatement generated by the collection and distribution of surplus food (which would otherwise be disposed of in landfill) for charitable purposes.
This method could benefit operators of facilities which treat domestic, commercial or industrial wastewater using a deep open anaerobic lagoon, for example municipal sewerage plants, abattoirs and fruit and vegetable processing plants.Return to Carbon Markets 101
Landfill waste contains biodegradable organic matter. As this organic matter decomposes it releases gases such as methane. Methane is a potent greenhouse gas which contributes to climate change.
This method provides an incentive to avoid releasing methane that would otherwise be generated when organic waste is deposited and decomposes in landfill. Projects under the method do this by separating organic material from other waste types and diverting it away from landfill to eligible alternative treatments such as composting.
For example, commercial organisations such as supermarkets or restaurants could introduce new bins to collect food waste previously sent to landfill; charities could collect and distribute surplus food for charitable purposes; or local councils could introduce new bins for the collection of food and/or garden wastes from households.