Offset projects established by land managers under the CFI need to use approved methodologies. These contain detailed rules for implementing and measuring specific abatement activities. A methodology must be based on peer-reviewed science and any assumptions must be conservative to ensure abatement is not over-estimated.
Additionality (the Positive list)
Carbon credits will only be issued for activities that create additional abatement. Activities that are already widely adopted or are required by law are not considered additional because they would occur regardless of whether the CFI was implemented. Activities that are deemed to go beyond common practice are considered additional and will be placed on the “Positive List”.
Excluded activities (the Negative list)
The Negative List identifies activities that are excluded from the CFI in circumstances where there is a risk of a material adverse impact on one or more of the following:
- Availability of water;
- Conservation of biodiversity;
- The local community; and
- Land access for agricultural production.
Permanence obligations for carbon sequestration projects
The internationally accepted timeframe for sequestration to be considered permanent is 100 years, based on the estimated life of one tonne of carbon pollution in the atmosphere. Carbon stored by CFI projects must be maintained for at least 100 years to effectively offset emissions.
Landholders are not required to return credits if carbon loss from bushfire, drought, or disease. It is possible that proponents would simply need to maintain the management practices already being employed. However, landholders must re-establish stores before credits will start to be issued again.
Landholders can choose to cancel their project at any time by re-purchasing all of the credits they have sold at the prevailing market price.
Leakage occurs if reduced emissions inside a project area result in increased emissions elsewhere (e.g. destocking that leads to other cattle producers increasing their supply to meet the unchanged market demands). Avoidance of leakage is critical because there would be no real abatement if it occurs.
Acknowledgements: Aust. Dept Climate Change and Energy Efficiency