The actions taken by the industry have created a unique opportunity to fix the landfill gas method and, in the process, showcase how to put Australia’s carbon credit system back on the rails. If the market doesn’t have integrity it’ll crash, so the business itself will collapse with that We would forgo some short-term revenue for the opportunity to participate in a market that is more robust and has more credibility and that provides a future. John Falzon, chair of LMS Energy, is among those calling for a change to the way credits are calculated. But the industry’s statements this week have made their position untenable. The Clean Energy Regulator and the Emissions Reduction Assurance Committee deny any problems with the new landfill gas method. Taxpayers – and the environment – deserve betterīurning methane converts it into carbon dioxide, a less potent greenhouse gas. This assumption is not true, particularly at larger landfills.Īustralia’s central climate policy pays people to grow trees that already existed. They assume that, in the absence of carbon credits, landfills would only ever destroy what they are required to by law. The baselines should account for this fact, but they don’t. So even if they don’t receive carbon credits, the sites with generators will often destroy more methane than they are legally required to. They can then sell this electricity, as well as earn and sell renewable energy certificates. Using generators, they can harness the heat from burning methane to produce electricity. But the new landfill gas method extended the concessional arrangements, allowing the larger landfill projects to keep using their low baselines for another five years.Ĭarbon credits are not the only means through which large landfill sites can profit from destroying methane. These concessions were meant to expire around now. This was a product of a deal that allowed operators to use baselines that applied under older offset schemes. But most of the biggest landfill gas projects were allowed to use baselines below 30%, and roughly ten projects were given 0% baselines. In 2011-12, when the original landfill gas methods were being devised, the government and industry agreed on a default minimum baseline of 30%. This makes it hard to set baselines that accurately reflect the regulatory requirements. This is made challenging by the fact that the state regulatory conditions are often drafted in imprecise terms. To be conservative, the baseline proportion should at least represent what operators are legally required to destroy. So for example, if a project has a 30% baseline and destroys 100 tonnes of greenhouse gases, it will be credited only for 70 tonnes. This baseline is deducted when calculating carbon credits. ![]() The landfill methods seek to address this issue using something known as a “baseline”, which is a prescribed proportion of the methane combusted at landfill sites. These legal requirements mean not all carbon abatement at landfills is additional to what would have occurred anyway. That’s because they’re required to do this under state laws governing air pollution and safety. In the case of landfill gas projects, additionality problems arise because most landfills would destroy methane even without the incentive provided by carbon credits. It means that the carbon abatement for which companies receive credits must be additional to what would have happened otherwise, without the incentive provided by the scheme. Shutterstock What’s wrong with the new method?Ī key principle that underpins the integrity of carbon offset markets around the world is the concept of “additionality”. Methane can be collected from landfill sites, such as this example in the United States. Here's what a new federal government probe must fix We blew the whistle on Australia's central climate policy. The concerns about landfill projects centre on this method. These projects are registered under four separate methods, including one established late last year for projects that use methane to generate electricity. They account for almost 30% of carbon credits issued under the fund. More than 100 landfill projects currently claim carbon credits for destroying landfill gas. Earlier this year, my colleagues and I went public with details of serious integrity issues with the scheme, including landfill gas projects. ![]() ![]() I’m a former chair of the Emissions Reduction Assurance Committee, the government-appointed body that oversees the fund’s methods. The fund, which began operating in 2014, was the centrepiece of the Coalition government’s climate policy and will continue under Labor. These credits can be sold to the federal government or to private entities that are required, or voluntarily choose, to offset their emissions. Under the Emissions Reduction Fund, projects that reduce greenhouse gas emissions are granted carbon credits. Climate Change and Energy Minister Chris Bowen has ordered a review of the carbon credit system.
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