This presentation is an overview of the CFI and methodology development.

1. Carbon Farming Initiative (CFI) This presentation is an overview of the CFI and methodology development. The source of this presentation: Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education DIICCSRTE June 2013

2. The Government’s plan for a Clean Energy Future involves four steps • Introduce a carbon price: ease the transition • Promote innovation and investment in renewable energy • Encourage energy efficiency • Create opportunities in the land sector to cut pollution.

3. The CFI rewards for landholders and farmers for taking additional steps to reduce pollution on the land • Landholders can receive carbon credits for • reducing emissions, and • increasing carbon stores • People and businesses can buy CFI credits from landholders to offset their own emissions

4. The CFI’s integrity is based on seven principles • Measurable • Conservative • Based on peer-reviewed science • Internationally consistent • Avoidance of leakage • Permanent • Additional

5. Permanence obligations underpin the integrity of sequestration projects • Maintain carbon or hand back credits • Only with sequestration projects • Re-establish carbon after a fire or drought • Risk of reversal buffer • temporary losses • wrong doing that can’t be remedied • Carbon maintenance obligation

6. Additionality and other benefits

7. The Positive List

8. CFI eligible activities are listed on the Positive List The positive list identifies activities that are not common practice and are eligible under the CFI. • Activities on the positive list are deemed to represent additional abatement. • All methodologies must be covered by a positive list activity.

9. Considerations for including an activity on the Positive List Common practice in an industry Genuine abatement potential Ministerial considerations for positive list approval Other e.g. adverse impacts DOIC Advice

10. Positive List process

11. Suggesting an activity for the Positive List • Is the activity covered by the CFI? • Does it have abatement potential? • Is it an uncommon practice? • Barriers to adoption • Is it on the positive list/not approved? • http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative/activities-eligible-excluded/additional-activities-positive-list.aspx • Is it on the negative list? • http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative/activities-eligible-excluded/excluded-activities-negative-list.aspx Anyone can suggest an activity for the positive list by emailing cfi@climatechange.gov.au

12. Methodology Development

13. Proposal to determinations APPLICANT Methodology proposal submitted in the approved template DOIC PRELIMINARY ASSESSMENT Initial screening and preliminary assessment of methodology proposal Public consultation (40 days) DOIC FINAL ASSESSMENT Formal consideration of methodology proposal DCCEE Endorsed methodology proposal drafted into determination MINISTER Ministerial consideration of methodology determination INDEPENDENT TECHNICAL REVIEW (contracted by DCCEE on behalf of the DOIC) Methodology determination registered on Federal Register of Legislative Instruments DOIC may request further information from applicant Note: progression through the process is not guaranteed at any point in time. Each methodology proposal must be successful at each point in order to progress to the next stage.

14. Critical requirements for methodology proposals • Follow the Guidelines and answer the questions using the template • Proposals not on the template will be invalid (the Guidelines and template are available at http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative/methodology-development/methodology-guidelines.aspx) • Ensures the proposal includes information required under the CFI Act, Regulations and Guidelines • Use clear and precise language • Faster assessment by the DOIC • Faster to turn into legislative instrument • No ambiguity • Methodology provides clear instructions • CER can assess whether validity of project application • Requirements can be verified

15. Methodologies must cover activities that are within the CFI scope: land sector abatement SEQUESTRATION EMISSIONS REDUCTION • Reforestation • Revegetation • Rangeland restoration • Soil carbon • Native forest protection • Fertiliser management • Manure management • Reduced livestock emissions • Landfill gas flaring • Savanna fire management 15

16. Methodologies must ensure genuine, additional abatement • Additional • Measurable and verifiable • Consistent with national inventory • Supported by peer-reviewed science • Conservative • Deals with variability Further information for these criteria is provided in the Guidelines for Submitting Methodologies.

17. Methodologies must define the project scope • What must the project involve? • What activities are excluded from the project? • What are the circumstances where the baseline and other assumptions hold true? Evidence? • Are there circumstances where the methodology does not apply? Example: Savanna Burning Scope is limited to areas that receive an average of more than 1000 mm of annual rainfall, i.e. areas in dark blue, because this is where the baseline assumptions hold

18. Methodologies must identify the baseline scenario • Clearly identify baseline and project scenarios • graphically and explain in text • Project proponent must provide evidence that baseline assumptions hold true • Reforestation project – • constant baseline Agricultural emissions avoidance - indexed baseline

19. Methodologies must set the greenhouse gas assessment boundary • What greenhouse gas sinks/sources are directly affected by the project and material? • Justify exclusions • Consider potential for leakage example

20. Common mistakes for methodology proposals • Outside scope of CFI • On the negative list • Not on the positive list Ineligible activity • Scope too broad for baseline • Sampling and measurement • – insufficient detail Technical issues • Assumes qualitative validation of project plans • Requirements not verifiable • Evidence not specified Rules unclear

21. Supporting methodology development • Advice on CFI legislation, assessment process, the methodology guidelines and template • Advice on existing methodologies or methodologies under development that may be relevant to your operations • Introductions to similar operators who may wish to develop a joint methodology proposal • Participation in Methodology Development Workshop for government-led methodology proposals

22. Supporting methodology development • Filling the Research Gap • research into new technologies and practices for land managers to reduce emissions and store soil carbon • Action on the Ground • to trial and demonstrate on-farm technologies and innovative practices that store carbon, reduce or mitigate agricultural greenhouse gas emissions • Methodology Development Program • To develop CFI methodologies, including estimation and reporting tools. • Indigenous Carbon Farming Fund Research & Development stream • to support and develop low-cost methodologies likely to have high Indigenous participation

23. Methodologies in progress • Agriculture (livestock, soil carbon, fertilisers) • Three determinations made. • Two methodology proposals under consideration. • The Department is working with a broad range of stakeholders including the dairy, beef and cotton industries to explore possibilities for developing agricultural methodologies. • Grants have been approved to expand opportunities for savanna burning and to develop methodologies for biochar and feed supplementation.

24. Methodologies in progress Landfill and Alternative Waste Treatment • Five determinations made. • One methodology proposal endorsed by DOIC • One methodology proposal under consideration. • Grant approved to develop a methodology for passive oxidation of small landfill

25. Methodologies in progress • Vegetation (regrowth, reforestation, avoided clearing and avoided harvest) • Five determinations made. • Seven methodology proposals under consideration • The Department is helping to finalise these methodologies, develop methodologies for further forest activities such as avoided harvest, and identify leakage factors. • Grants approved for calibration of FullCAM for complex biodiverse systems and a methodology for the rehabilitation of woodlands.

26. Further information Email cfi@climatechange.gov.au Subscribe to CFI News at http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative/subscribe.aspx