What are ACCUs?
The Australian Federal Government’s Emissions Reduction Fund (ERF) is a scheme that encourages businesses to run projects which avoid the release of greenhouse gases into the atmosphere or remove and sequester carbon from the atmosphere. The ERF also issues Australian Carbon Credit Units (ACCUs).
But what is an ACCU? ERF accredited projects that have proven to abate greenhouse gas emissions in Australia earn ACCUs. An ACCU is a certificate issued which represents the avoidance or removal of one tonne of carbon dioxide equivalent (CO2-e) of greenhouse gas through an accredited offsets project.
What value does an ACCU have and how can you buy and sell it?
An ACCU is a financial instrument issued to eligible project owners. ACCUs can either be traded on the national environmental commodity market or used by the holder or another party to meet that party’s emissions reduction obligations (including under the Safeguard Mechanism).
The Australian Government also purchases ACCUs by way of abatement contracts to further incentivise investment in carbon offset projects.
Corporate and industrial businesses which emit carbon into the environment through their operations may:
- Have obligations under the Safeguard Mechanism to acquire ACCUs to avoid paying a penalty, or
- Wish to voluntarily purchase ACCUs on the marketplace and retire these to offset their carbon emissions.
- Offset their emissions by purchasing ACCUs via other parties such as Origin.
The exchange of ACCUs helps to lower carbon emissions in Australia in two ways:
- For the seller, it is an incentive to continue developing projects which reduce greenhouse gas emissions.
- For the buyer, it is a way to offset carbon output to assist in their decarbonisation journey.
In the 2021 / 2022 financial year, over 16.5 million ACCUs were issued to cover the 16.5 million tonnes of carbon abated by accredited projects.
The Safeguard Mechanism, a program which requires the nation’s biggest carbon emitters to reach pre-defined carbon baselines, considers ACCUs to be the only form of genuine carbon credit.
What are the projects which generate ACCUs?
- Avoidance projects – carbon offset projects in Australia which prevent carbon from being emitted into the atmosphere.
- Removal projects – carbon offset projects in Australia which actively capture carbon and remove it from the atmosphere.
Examples of avoidance projects include forest protection projects and programs which incentivise farmers to leave certain fields unsown to reduce carbon.
Examples of removal projects include regenerating forests and wetlands, improving soil quality and using other technological and natural methods to absorb carbon from the atmosphere.
One type of avoidance project which is common in Australia is savanna burning. Savanna fires can contribute up to 3% of Australia’s overall greenhouse gas emissions and strategic management of savanna woodland and grassland through backburning can limit methane and nitrous oxide emissions from savanna fires by up to 52%. This is because early dry-season fires burn with far lower intensity than late dry-season fires.
Projects such as these are attaining accreditation from the ERF and generating ACCUs and are often led by Indigenous groups who have been using similar practices for centuries.
How can Origin Zero assist businesses on their journey to net zero?
The Origin Zero team has an in-depth understanding of ACCUs and how they can help businesses on their path towards decarbonisation. Origin offers a range of products to help businesses offset their hard-to-abate emissions, reduce their carbon footprint and assist in their decarbonisation journey.
