Your Guide to the Emissions Reduction Fund

The Emissions Reduction Fund (ERF) is a voluntary scheme developed by the Australian Government’s Department of Climate Change, Energy, the Environment and Water. This scheme encourages land owners, managers, and farmers, to reduce their carbon emissions or capture and store carbon.

Here, we explain what the scheme entails, the eligibility requirements, and the benefits your business can gain by investing in emissions reduction solutions. Call Volteam today for more information on our competitively priced, renewable energy solutions.

Understanding the Emissions Reduction Fund

Organisations and individuals are incentivised to participate in the Emissions Reduction Fund scheme with the chance to earn Australian Carbon Credit Units (ACCUs). These carbon credits provide landowners with an additional income stream, as they can either be sold back to the Australian government or on the secondary private market.

To earn credits, participants must adopt one of several activities from a list of emissions reduction methods (ERF methods). Developed and monitored by the Clean Energy Regulator, Australia’s independent statutory authority for reducing the production of greenhouse gases, these methods involve:

• Upgrading existing equipment
• Using new technology
• Improving productivity or reducing energy use with new business practices
• Changing vegetation management processed

Who is Eligible for the Emissions Reduction Fund?

Landowners, managers, and farmers must ensure that they’ve obtained the legal right to perform their chosen projects, both in terms of the location and assets performed. 

They will also have to pass a Fit and Proper Person (FPP) test, which considers a participant’s past compliance with the law and whether they have the necessary capabilities to effectively fulfil their intended project.

The projects themselves must also meet a certain set of criteria to be eligible for the Australian Carbon Credit Unit scheme, which includes the following points:

• Activities must not have already started or be required by law
• Participants shouldn’t be receiving financial support from any other government programs
• Projects should go beyond business-as-usual activities and not be excluded under the Carbon Credits (Carbon Farming Initiative) Rule 2015
• Chosen projects should follow an ERF-approved method. Rules must be established for running the project and estimating emissions reductions before it gets underway.

How to Participate in the Emissions Reduction Fund

By applying for the Emissions Reduction Fund, participants will earn Australian Carbon Credit Units for each tonne of carbon dioxide equivalent they either avoid emitting or store.

After checking the eligibility requirements, follow these steps to start collecting ACCUs and apply for the Emissions Reduction Fund:

1. Choose Activities

The activities you select to participate in the ACCU scheme will vary based on your chosen methods.

For example, agriculture projects aim to reduce farming and land emissions through activities like reusing animal waste and storing carbon in soil. On the other hand, projects classified as energy efficiency methods lower electricity and natural gas use, which may include installing more energy-efficient equipment like solar power systems.

However, all of these methods have one common goal: to reduce greenhouse emissions or store carbon by using new technologies and processes. Some key examples of eligible projects and activities include:

• Waste reduction
• Reforestation
• Landfill gas collection
• Savanna fire management

2. Plan the Project

Before applying, planning is an essential step for ensuring that the project and your chosen activities are viable in terms of your business.

You’ll need to check state regulations to see whether approval is required, while also looking for quality assurance requirements and monitoring systems that may be necessary.

You should also perform a cost-benefit analysis, which determines how much money can be made from a project. This will help you calculate upfront costs for purchasing technology or preparing land, for example, and decide what price to sell your Australian Carbon Credit Units for.

3. Decide on the Project Proponent

The project proponent is the individual, sole trader, company, or trust responsible for carrying out the project. They are legally responsible for ensuring the project meets all obligations, while also issuing any ACCUs earned.

Alongside choosing a project proponent, you can also select a third party to help you run the project, which are known as carbon service providers.

4. Register the Project

Once the planning stages are complete, you can then apply to participate by registering your project on the Clean Energy Regulator website. 

To do this, you’ll need to open an Australian National Registry of Emissions Units account (ANREU).

5. Start the Project

As part of running your Emissions Reduction Fund project, the project proponent or carbon service provider must ensure that all monitoring, record-keeping, and auditing requirements are fully complied with during all activities.

They’ll also need to provide reports at least every 2 years for projects involving emissions reductions, or 5 years for sequestration projects.

6. Apply for ACCUs

Apply to start earning ACCUs when you complete the project reporting and auditing stage. Your claim will be assessed by the Clean Energy Regulator to ensure that it meets all legal obligations, and then the ACCUs will be issued to your ANREU account.

Every Australian Carbon Credit Unit you earn is then eligible for sale on the secondary market under a private commercial agreement, or directly to the Australian Government through a carbon abatement contract.

Invest in Renewable Energy Sources with Volteam

As well as helping Australian businesses generate higher incomes, running ERF projects offers several other key environmental and economic benefits. For example, these projects can enhance farm productivity, improve water quality, lower emissions, and reduce energy costs.

Interested in earning ACCUs while lowering your carbon footprint? At Volteam Electric, our fully licensed and insured team are on hand to help you select and install the most efficient renewable energy solutions for your ERF project.

We’ll help you maintain safe and effective solar power and battery systems, which reduce the amount of carbon dioxide that your business emits each year.

Call us today at 1300 865 832 or fill out your details on the Volteam website to request a free quote and schedule your consultation.

FAQs

What is the Emissions Reductions Fund in Australia?

Also known as the Australian Carbon Credit Unit (ACCU) scheme, the Emissions Reduction Fund encourages businesses and individuals to start projects that reduce greenhouse gases or store carbon. This can involve anything from boosting productivity to upgrading equipment, purchasing new technology, or changing business practices.

How Does the Emissions Reduction Fund Work?

Successful applicants to the Emissions Reduction Fund will earn Australian Carbon Credit Units (ACCUs) for every tonne of carbon dioxide equivalent that their project stores or avoids. These ACCUs can then be sold to the Australian Government or on the secondary private market.

Who Can Apply for the Emissions Reduction Fund?

Farmers, land owners and managers, individuals, and businesses can apply to the Emissions Reduction Fund. To be eligible, participants must have the legal right to carry out the project activities they are proposing and pass a fit and proper person assessment. The proposed activities must also be new, not required by law, and should follow an approved EMR method. 

How Much is One ACCU Worth?

One Australian Carbon Credit Unit (ACCU) is earned for each tonne of carbon dioxide equivalent that is avoided or removed from the atmosphere. The spot price of each ACCU fluctuates throughout the year, but is, on average, worth around $32.