The Greenhouse Gas Benchmark (Large User Abatement Certificate) Rule No.4 of 2003 (LUAC Rule) provides specific arrangements for the creation and calculation of LUACs through the abatement of on-site industrial production-related greenhouse gas emissions not directly related to the consumption of electricity.

Applications for accreditation

In the LUAC Rule, the person entitled to create abatement certificates is called a ‘Large User’. Persons who qualify as large users are:

• large customers, who use more than 100 GWh per year at one or more sites that they own or occupy in NSW with at least one using more than 50 GWh per year, who have elected to manage a greenhouse gas benchmark
• persons carrying out State significant development as determined by the Minister for Planning in accordance with Environmental Planning and Assessment Act 1979 who have elected to manage a greenhouse gas benchmark
• market customers whose electricity usage levels pass the threshold applied to large customers (ie 100 GWh per year at one or more sites that they own or occupy in NSW with at least one using more than 50 GWh per year).

Before applying, project proponents need to check off the following steps:

• establish that they are an eligible Large User
• establish their they have an eligible activity at a qualifying site covered by their benchmark
• decide which calculation method is best suited to their activity, and
• generate enough data and records to apply that method.

Once these steps have been completed, the project proponent should submit the Application Form – LUAC and the correct attachment for their selected calculation methodology, along with the application fee and supporting documentation outlined in the Guide to Applying – LUAC Rule.

Large User Abatement Certificates

LUACs are non-tradable abatement certificates created by large users’ eligible abatement activities that reduce on-site greenhouse gas emissions not directly related to the use of electricity. They can only be surrendered by the large user in their capacity as a benchmark participant to meet their own greenhouse gas benchmark.

Each LUAC is equal to the reduction of one tonne of carbon dioxide equivalent by the large user as a result of their abatement activity.

Eligible LUAC activities

The LUAC Rule allows for those that qualify as large users to carry out non-electricity related greenhouse gas emission abatement activities. These activities could include:

• increasing the efficiency of on-site fuel use
• switching to lower emission intensity fuels
• abating on-site greenhouse gas emissions from industrial processes
• abating on-site fugitive greenhouse gas emissions.

Please refer to our case study for an example of a LUAC project.

Ineligible LUAC activities

The LUAC Rule excludes certain activities from making LUACs, such as:

• those which can create certificates under another Rule
• those which result in emissions reported in the Agriculture, Land Use Change and Forestry or Transport sections of the National Greenhouse Gas Inventory
• those which are conducted in compliance with statutory requirements (although emissions reductions beyond the statutory requirements may be claimed).

Calculation of the number of LUACs from a project

A LUAC project may be a single activity or a mixture of multiple activities implemented either as a one-off action or as part of an ongoing program. To accommodate this variability, a large user can choose between three different methods for calculating how many LUACs may be created from its project:

• Project Impact Assessment Method (Attachment A)
• Baseline Method for an Existing Plant (Attachment B)
• Baseline Method for Plant Extensions or New Plant (Attachment C)

For a detailed description of how to use each of these calculation methods, please see the Guide to Applying – LUAC Rule. Project proponents should contact the Scheme Administrator prior to submitting an application.

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