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The NSW Greenhouse Gas Reduction Scheme (GGAS) may issue credits to organisations who plant trees for the purpose of reducing carbon dioxide in the atmosphere – a process known as carbon sequestration.
What is GGAS?
GGAS is the NSW Greenhouse Gas Reduction Scheme (GGAS) and was established by the NSW Government in 2003. GGAS is one of the first mandatory greenhouse gas emissions trading schemes in the world. GGAS aims to reduce greenhouse gas emissions associated with the production and use of electricity. Electricity production and use is the largest single source of greenhouse gases, and these gases are contributing to climate change. GGAS also includes recognition for carbon captured from growing trees.
How are the emissions from electricity production reduced?
Parties that have an annual target for emission reductions purchase credits called NGACs (New South Wales Greenhouse Abatement Certificates) and surrender them. These credits can be created from a range of activities that avoid or eliminate greenhouse gas emissions. One possible source of credits is planting trees to sequester carbon.
How can planting trees assist in reducing emissions?
Carbon dioxide is believed to be the primary greenhouse gas that is contributing to climate change. Photosynthesis is the natural process that trees and plants use to grow. This process uses carbon dioxide from the atmosphere together with sunlight in a chemical reaction to produce oxygen and glucose. It is because of photosynthesis that growing trees can help reduce the emission of greenhouse gases to the atmosphere. Carbon Sequestration is the term used to describe this process of absorbing and storing carbon.
Who can create credits from planting and growing trees in GGAS?
Only companies/individuals who are accredited can create credits from planting and growing trees. To be accredited, there are a number of eligibility requirements, including:
- The forest must be in New South Wales
- The trees must have capacity to reach at least 2m in height at maturity
A minimum tree crown cover of 20% of the land mass
- The area of the forest must be at least 0.2ha and clear of any forest on 31 December 1989.
- Carbon Sequestration Rights (a type of forestry right) must be registered on the land title
- The forest must have been “human-induced”, through activities like direct seeding and planting
How is Carbon Sequestration measured?
It is not feasible to directly measure the amount of carbon that a forest is storing over time, so the preferred approach is to use tree-growth modelling to estimate the amount of carbon stored. This modelling is then adjusted on a regular basis to reflect the occurrence of events that affect the rate of carbon sequestration, such as rainfall or bushfire. Many different models for carbon sequestration are available. One that is free to access is the National Carbon Accounting Toolbox (NCAT). You can obtain a copy of the NCAT by visiting http://www.greenhouse.gov.au/ncas/
When can credits be registered for Carbon Sequestration?
Assuming an organisation is accredited in GGAS for the forestry project, credits can be registered on a frequency that reflects the actual rate of carbon sequestration. It is not possible to “forward create” credits for a forest. Typically an accredited organisation will create the credits annually, after calculating how much the forest has grown, and therefore how much carbon has been sequestered for the year. Once a forest has stopped growing, credits can no longer be created.
Are there any obligations after I have created and sold the credits?
There are two key long-term obligations for creating credits from carbon sequestration. Firstly, the accredited organisation must maintain the sequestered carbon for 100 years. A Restriction on Use that is registered on the title of the land, is used to ensure this obligation. Secondly, the accredited organisation must commit to a reporting schedule to confirm that the carbon sequestration for which credits have been created remains stored in the forest.
Is this being funded by the Government?
No. The Greenhouse Gas Reduction Scheme is a market based scheme. Companies are under no obligation to participate to create NGACs. However any company that sells electricity in NSW must reduce the level of greenhouse gas emissions per customer over time. One way they can do this is by purchasing credits that have been created from carbon sequestered in forests.
Want to know more about applying to become accredited for a forestry project?
It is recommended that you read the Fact Sheet – When can Forest Managers create NGACs.
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