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WASTE MANAGEMENT |
the Fund; Woolworths was on the technical
What about trials?
Council trials of organics diversion systems
are common. If you held a trial more than
a year ago, it can be ignored. Otherwise,
material from the trial area must be excluded
from the project.
What types of waste are eligible?
All organics, except paper, cardboard and
biosolids. Food waste diversion looks the
What processes are eligible?
Composting, anaerobic digestion, process-
engineered fuel manufacture, or diversion of
food for charitable distribution.
Who can apply?
Those who have the ‘legal right’. Projects
are envisaged as partnerships between the
decision-maker (for example, a facilities
manager) and service providers. An
‘aggregated’ project could cover several
businesses or councils at once.
How is the number of credits calculated?
By estimating the difference between
emissions with and without the source
separation project. Formulas from the
National Greenhouse and Energy Reporting
system are used to estimate emissions if the
material had gone to landfill, assuming gas
capture at the average rate in the project
state or territory (see Table 1). Only a small
portion of collected garden waste is assumed
to be diverted from landfill (see Table 1).
A 2.1 per cent annual discount is applied
representing business as usual improvements
in organics diversion. The composition of
waste can be measured by waste audits, or
default values can be adopted. The default
for mixed municipal food and garden
organics is 70 per cent garden and 10 per
What can you do with the credits?
The Australian Government has a budget
to buy them. The weighted average price
in the first auction was $13.95 per tonne of
carbon dioxide equivalent (CO2 -e), and in
the second, it was $12.25. If the government
doesn’t buy your credits, there are secondary
markets in Australia and overseas.
What is the process for running a project?
This is all on the Clean Energy Regulator’s
website. In summary, you should register
your project, bid at an auction, run the
project, and claim the credits. You’ll need at
least three project audits during the seven-
year project life. Because landfill emissions
arise over an extended period of time, the
credits for avoiding them are issued in equal
annual amounts over seven years (including
the starting year). This means that the total
project length is 13 years. Success at two
auctions would be needed to sell all the
credits to the government over this period.
What are the costs and benefits of
This, of course, depends on the scale and
type of project, the state or territory in
which it occurs, and various other factors.
Blue Environment has developed a flexible
model to estimate net benefits, including
estimated administration and auditing costs.
Approximations of the net benefit of some
theoretical council projects are summarised
in Table 2.
What are the risks of participating?
The biggest risk is that the Australian
Government’s stated budget is exhausted.
It spent about half of its budget allocation
in the first two auctions, and unless your
project is ready to go now, you have
no chance of meeting the schedule to
participate in the next auction in late April.
If it runs out of money, the government
will top up its budget only if it thinks it is
necessary to meet its emissions reduction
target. However, the government is also
developing its safeguard mechanism, which
is designed to ensure that overall emissions
don’t rise by capping large emission sources.
If companies caught by the safeguard
mechanism want to increase their emissions,
they will need to offset them, providing a
strong secondary market for carbon credits.
There are other risks, of course: budget
blowouts; unexpectedly low diversion
compared with the commitments made at
auction; or low credit values. With careful
planning, these risks can be minimised.
Labor has already stated that it won’t
override existing contracts if it wins
How can you get started?
Councils and businesses considering new or
expanded organics recovery services would
be wise to consider registering their projects.
The Clean Energy Regulator’s website gives
detailed instructions on how to do so, and
the explanatory statement released with the
finalised method is worth a read. And, of
course, a number of consulting companies
can help you, including mine.
Dr Joe Pickin chairs the national carbon
division of the Waste Management
Association of Australia, and is a
director of Blue Environment strategic
environmental consultants. He can be
or 0403 562 621. This article was first
published in the February 2016 edition
of Inside Waste magazine.
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