1. Is the Greenhouse Gas Reduction Scheme (GGAS) Carbon Sequestration Rule Kyoto-consistent?

2. What is ‘ Eligible Forest’?

3. Can an eligible forest be interstate?

4. How big does the forest need to be to create abatement certificates?

5. How long does the carbon need to be stored for?

6. What costs are involved in applying for accreditation?

7. What ongoing costs are involved once accredited?

1. Is the Greenhouse Gas Reduction Scheme (GGAS) Carbon Sequestration Rule Kyoto-consistent?

The GGAS Rule for Carbon Sequestration outlines the eligibility criteria for carbon sequestration activities under GGAS, and is intentionally aligned with the Australian Standard for Carbon Accounting and the approaches prescribed by the Kyoto Protocol and the United Nations Framework Convention for Climate Change (UNFCCC).

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2. What is ‘ Eligible Forest’?

In GGAS, eligible forest is forestry that takes place on land that was predominantly non-forest prior to 1 January 1990. In applying for accreditation, the applicant must provide evidence of the eligible forest, using means such as aerial photography and satellite imagery.

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3. Can an eligible forest be interstate?

Section 97DA of the Electricity Supply Act stipulates that the Minister may approve carbon sequestration in another jurisdiction, provided that jurisdiction has a mandatory greenhouse gas reduction scheme. As such, at present the eligible forest must be located in either NSW or ACT.

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4. How big does the forest need to be to create abatement certificates?

There are minimum requirements for the forest size under GGAS:

• 0.2 hectare land mass
• 20 per cent crown cover of land mass
• 2m height capacity of tree species.

These minimum specifications are regarded as Kyoto-consistent. The number of abatement certificates that may be created from forestry activity can vary greatly on a per hectare basis. The rate at which carbon is sequestered through forestry is dependant upon many factors including tree species type, rainfall levels and soil condition.

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5. How long does the carbon need to be stored for?

GGAS requires the carbon to be stored for one hundred years from the date of abatement certificate creation. For example, if a Sequestration Pool Manager registers an abatement certificate in August 2006, it must ensure that it retains the carbon storage to the equivalent of the abatement certificate (1 tonne of CO₂-e) until July 2107.

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6. What costs are involved in applying for accreditation?

There are two main costs in applying for accreditation:

• A one off application fee of $500 per project
• Potentially an audit of the application. The need for an audit will be assessed by the Independent Pricing and Regulatory Tribunal (IPART) and you will be advised. The cost of the audit depends upon the scope of the audit and the complexity of the material being audited. Generally, a record keeping audit costs between $5,000 and $10,000. All audit costs are borne by the project proponents.

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7. What ongoing costs are involved once accredited?

The two areas of ongoing costs, once accredited, are:

• 15 cent registration fee per certificate, as defined in the legislation
• Periodic audits of the project after accreditation. As a general rule of thumb:
• Projects creating more than 100,000 certificates per annum need to be audited annually
• Projects creating between 50,000 and 100,000 certificates per annum may be audited every two years
• Projects creating between 5,000 and 50,000 certificates per annum may be audited every three years
• Projects creating less than 5,000 certificates per annum may be spot audited randomly at the discretion of IPART.

Please be aware that this may vary based on the specific characteristics of the project and any non-compliance issues arising.

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