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Carbon Credits (Carbon Farming Initiative) Bill 2011

Part 2 Issue of Australian carbon credit units in respect of offsets projects

Division 1 Introduction

10   Simplified outline

                   The following is a simplified outline of this Part:

•      Australian carbon credit units may be issued in relation to an eligible offsets project.

•      The number of Australian carbon credit units issued will be worked out by reference to:

               (a)     the relevant abatement amount calculated under the applicable methodology determination; or

              (b)     if the project is a native forest protection project—the relevant sequestration amount calculated under the applicable methodology determination.

•      For sequestration offsets projects, a risk of reversal buffer applies.



 

Division 2 Issue of Australian carbon credit units in respect of offsets projects

11   Issue of Australian carbon credit units in respect of offsets projects

Scope

             (1)  This section applies if a certificate of entitlement is in force in respect of an eligible offsets project for a reporting period.

Note:          For certificate of entitlement , see section 15.

Issue of units

             (2)  If:

                     (a)  the project is an eligible Kyoto project; and

                     (b)  the reporting period ends on or before the Kyoto abatement deadline;

the Administrator must, as soon as practicable after the day on which the certificate was issued, issue to the holder of the certificate a number of Kyoto Australian carbon credit units equal to the number specified in the certificate as the unit entitlement for that certificate.

             (3)  If:

                     (a)  the project is an eligible non-Kyoto project; and

                     (b)  the reporting period ends on or before the Kyoto abatement deadline;

the Administrator must, as soon as practicable after the day on which the certificate was issued, issue to the holder of the certificate a number of non-Kyoto Australian carbon credit units equal to the number specified in the certificate as the unit entitlement for that certificate.

             (4)  If the reporting period ends after the Kyoto abatement deadline, the Administrator must, as soon as practicable after the day on which the certificate was issued, issue to the holder of the certificate a number of non-Kyoto Australian carbon credit units equal to the number specified in the certificate as the unit entitlement for that certificate.

             (5)  The Administrator must not issue an Australian carbon credit unit to a person in accordance with subsection (2), (3) or (4) unless the person has a Registry account.

Note 1:       See also section 49 (issue of Australian carbon credit units to registered native title bodies corporate).

Note 2:       See also section 141 (issue of Australian carbon credit units in relation to projects with multiple project proponents).

             (6)  The Administrator must issue an Australian carbon credit unit to a person in accordance with subsection (2), (3) or (4) by making an entry for the unit in the person’s Registry account the account number of which is specified in the certificate.

Note 1:       See also section 49 (issue of Australian carbon credit units to registered native title bodies corporate).

Note 2:       See also section 141 (issue of Australian carbon credit units in relation to projects with multiple project proponents).



 

Division 3 Certificate of entitlement

12   Application for certificate of entitlement

                   After the end of a reporting period for an eligible offsets project, a person may apply to the Administrator for the issue to the person of a certificate of entitlement in respect of the project for the reporting period.

Note 1:       For eligible offsets project , see section 27.

Note 2:       For reporting period , see section 5.

13   Form of application

             (1)  An application must:

                     (a)  be in writing; and

                     (b)  be in a form approved, in writing, by the Administrator; and

                     (c)  set out the account number of a Registry account of the applicant that should be specified in the certificate; and

                     (d)  be accompanied by such information as is specified in the regulations; and

                     (e)  be accompanied by a prescribed audit report prepared by a registered greenhouse and energy auditor who has been appointed as an audit team leader for the purpose; and

                      (f)  be accompanied by the offsets report about the project for the relevant reporting period; and

                     (g)  be accompanied by such other documents (if any) as are specified in the regulations; and

                     (h)  be accompanied by the fee (if any) specified in the regulations.

Note 1:       See also section 49 (applications for certificates of entitlement by registered native title bodies corporate).

Note 2:       See also section 141 (applications for certificates of entitlement in relation to projects with multiple project proponents).

             (2)  The regulations may provide that a project of a kind specified in the regulations is exempt from paragraph (1)(e).

             (3)  Subsection (2) of this section does not, by implication, limit the application of subsection 13(3) of the Legislative Instruments Act 2003 to another instrument under this Act.

             (4)  The approved form of application may provide for verification by statutory declaration of statements in applications.

             (5)  A fee specified under paragraph (1)(h) must not be such as to amount to taxation.

14   Further information

             (1)  The Administrator may, by written notice given to an applicant, require the applicant to give the Administrator, within the period specified in the notice, further information in connection with the application.

             (2)  If the applicant breaches the requirement, the Administrator may, by written notice given to the applicant:

                     (a)  refuse to consider the application; or

                     (b)  refuse to take any action, or any further action, in relation to the application.

15   Issue of certificate of entitlement

Scope

             (1)  This section applies if an application under section 12 has been made for the issue of a certificate of entitlement in respect of an eligible offsets project for a reporting period.

Issue of certificate

             (2)  If the Administrator is satisfied that:

                     (a)  the applicant is a recognised offsets entity; and

                     (b)  the applicant was, immediately before the end of the period:

                              (i)  the project proponent for the project; and

                             (ii)  identified in the relevant section 27 declaration as the project proponent for the project; and

                     (c)  the reporting period is included in a crediting period for the project; and

                     (d)  if the project is a prescribed native forest protection project—the reporting period is the first reporting period for the project; and

                     (e)  if the relevant section 27 declaration is subject to the condition that all regulatory approvals must be obtained for the project before the end of the first crediting period for the project—that condition has been met; and

                      (f)  the applicant is not subject to a requirement under Part 7 to relinquish a number of Australian carbon credit units; and

                     (g)  no amount is payable by the applicant under:

                              (i)  section 179; or

                             (ii)  section 180;

                            in relation to a requirement under Part 7 to relinquish a number of Australian carbon credit units; and

                     (h)  if the regulations specify one or more other eligibility requirements—those requirements are met;

the Administrator must issue a certificate of entitlement in respect of the project for the period.

Note:          For recognised offsets entity , see section 64.

             (3)  A certificate of entitlement must state that a specified number is the unit entitlement in respect of the certificate.

Note:          For unit entitlement, see section 16, 17 or 18.

             (4)  If the application sets out the account number of a Registry account of the applicant that should be specified in the certificate of entitlement, the certificate must specify that account number.

Timing

             (5)  The Administrator must take all reasonable steps to ensure that a decision is made on the application:

                     (a)  if the Administrator requires the applicant to give further information under subsection 14(1) in relation to the application—within 90 days after the applicant gave the Administrator the information; or

                     (b)  otherwise—within 90 days after the application was made.

Refusal

             (6)  If the Administrator decides to refuse to issue a certificate of entitlement, the Administrator must give written notice of the decision to the applicant.

16   Unit entitlement—sequestration offsets projects other than native forest protection projects

Scope

             (1)  This section applies to an eligible offsets project if the project is a sequestration offsets project other than a native forest protection project.

Note:          For sequestration offsets project , see section 5.

Unit entitlement

             (2)  The number to be specified in a certificate of entitlement in respect of the project for a reporting period as the unit entitlement in respect of the certificate is the number worked out using the formula:

where:

net abatement number means the total number of tonnes in the amount that, under the applicable methodology determination for the reporting period, is the carbon dioxide equivalent net abatement amount for the project in relation to the reporting period.

risk of reversal buffer number means:

                     (a)  5%; or

                     (b)  if:

                              (i)  at the start of the crediting period in which the reporting period is included, another percentage is specified in the regulations in relation to a particular kind of project; and

                             (ii)  the project is of that kind;

                            that other percentage;

of the net abatement number.

             (3)  If the number worked out using the formula in subsection (2) is not a whole number, the number is to be rounded to the nearest whole number (with a number ending in .5 being rounded down).

             (4)  For the purposes of subsection (3), zero is taken to be a whole number.

17   Unit entitlement—native forest protection projects

Scope

             (1)  This section applies to an eligible offsets project if the project is a native forest protection project.

Note:          For native forest protection project , see section 5.

Unit entitlement—prescribed native forest protection projects

             (2)  If the project is a prescribed native forest protection project, the number to be specified in a certificate of entitlement in respect of the project for a reporting period as the unit entitlement in respect of the certificate is the number worked out using the formula:

where:

net sequestration number means the total number of tonnes in the amount that, under the applicable methodology determination, is the carbon dioxide equivalent net sequestration amount for the project for the crediting period in which the reporting period is included.

risk of reversal buffer number means:

                     (a)  5%; or

                     (b)  if:

                              (i)  at the start of the crediting period in which the reporting period is included, another percentage is specified in the regulations in relation to a particular kind of project; and

                             (ii)  the project is of that kind;

                            that other percentage;

of the net sequestration number.

Note:          For prescribed native forest protection project , see section 5.

Unit entitlement—other native forest protection projects

             (3)  If the project is not a prescribed native forest protection project, the number to be specified in a certificate of entitlement in respect of the project for a reporting period as the unit entitlement in respect of the certificate is the number worked out using the formula:

where:

crediting period number means the number of years in the crediting period in which the reporting period is included.

net sequestration number means the total number of tonnes in the amount that, under the applicable methodology determination, is the carbon dioxide equivalent net sequestration amount for the project for the crediting period in which the reporting period is included.

reporting period number means the number of years in the reporting period.

risk of reversal buffer number means:

                     (a)  5%; or

                     (b)  if:

                              (i)  at the start of the crediting period in which the reporting period is included, another percentage is specified in the regulations in relation to a particular kind of project; and

                             (ii)  the project is of that kind;

                            that other percentage;

of the net sequestration number.

Rounding down

             (4)  If the number worked out using the formula in subsection (2) or (3) is not a whole number, the number is to be rounded to the nearest whole number (with a number ending in .5 being rounded down).

             (5)  For the purposes of subsection (4), zero is taken to be a whole number.

18   Unit entitlement—emissions avoidance offsets project

Scope

             (1)  This section applies to an eligible offsets project if the project is an emissions avoidance offsets project.

Note:          For emissions avoidance offsets project , see section 53.

Unit entitlement

             (2)  The number to be specified in a certificate of entitlement in respect of the project for a reporting period as the unit entitlement in respect of the certificate is the total number of tonnes in the amount that, under the applicable methodology determination for the reporting period, is the carbon dioxide equivalent net abatement amount for the project in relation to the reporting period.

19   Cancellation of units issued in respect of a project that is subject to the voluntary automatic unit cancellation regime

Scope

             (1)  This section applies if:

                     (a)  an eligible offsets project is subject to the voluntary automatic unit cancellation regime; and

                     (b)  an Australian carbon credit unit is issued to a person in respect of the project.

Note:          For when an eligible offsets project is subject to the voluntary automatic unit cancellation regime, see paragraph 27(3)(e).

Automatic cancellation

             (2)  Immediately after the issue of the unit:

                     (a)  the unit is cancelled; and

                     (b)  the Administrator must remove the entry for the unit from the person’s Registry account in which there is an entry for the unit; and

                     (c)  if the unit is a Kyoto Australian carbon credit unit:

                              (i)  the Minister must, by written notice given to the Administrator, direct the Administrator to transfer a Kyoto unit from a Commonwealth holding account to a voluntary cancellation account before the end of the true-up period for the relevant commitment period; and

                             (ii)  the Administrator must comply with a direction under subparagraph (i).

             (3)  The Registry must set out a record of each cancellation under subsection (2).

No transfer

             (4)  The Australian carbon credit unit cannot be transferred.

20   Certificate of entitlement not transferable

                   A certificate of entitlement is not transferable.