Insights March 2024

The Clean Energy Regulator (CER) has expanded its annual audit program for Human Induced Revegetation (HIR) projects. This was done under direction from the Minister for Climate Change and Energy. It engaged an independent expert to review and report on the outcomes of HIR projects’ gateway checks. Gateway checks are site audits. They assess the amount of carbon sequestered in a carbon farming project area. HIR projects must undergo regular gateway checks. The checks are used to show that Australian carbon credit units (ACCUs) are issued only to land progressing towards forest cover.

The audit took place across 25 broadly representative projects. It considered the suitability and accuracy of the remote sensing tools. The audit also looked at forest growth modelling tools used for gateway audits. It also reviewed the sufficiency of evidence that project activities were being carried out. The appropriateness of the stratification processes used was also considered.

The report concluded there was good evidence that in general:

• Proponents carried out the required management activities.
• Independent audits and CER reviews have ensured proponents have used appropriate stratification tools.
• The sampled sites had very low tree canopy cover at the beginning of their modelling periods in 2010. Despite variation due to droughts and breaking droughts, they have achieved significant growth.

In summary, the report confirmed HIR projects are demonstrating regeneration. Proponents were also found to be implementing project activities correctly.

The Clean Energy Regulator starts Work on Nature Repair Market.

On 15 December 2023, the Nature Repair Act 2023 (the Act) came into effect. The Act establishes the framework for a legislated, national, voluntary biodiversity market. The Nature Repair Market (the Market) will make it easier for businesses to voluntarily invest in nature repair projects. It is a world-first for a market of this kind.

The Clean Energy Regulator recently commenced work to administer the Market. CER are developing processes very similar to the ACCU Scheme. The Market will have methodology determinations (methods) to outline rules for eligible projects. These methods are being developed with stakeholders through collaborative processes. The CER will administer both the Nature Repair Market and the ACCU Scheme. These will both support alignment between carbon and biodiversity markets. A prime objective is to make it easier for landholders to participate in both schemes.

The Nature Repair Market aims to attract private investment. The investment will focus on restoring and safeguarding Australian ecosystems. It will cover various nature repair, protection, and restoration efforts. Projects can be located on Australian land, water, or a mix of both. Eligible participants, include First Nations groups, conservation organisations, and farmers.

Farm businesses should only anticipate some progress on method development this year. This is due to the complexity of defining the methods. Issuance of certificates is similar to ACCUs, and trading in them is a few years away.