Australian carbon credits have another credibility problem
Australia's carbon credit scheme has been called into question once again - this time over the use of landfill credits.
The Australian carbon credit unit (ACCU) scheme is a centrepiece of the government’s climate policy, providing the offset credits that will be relied on by large-emitting facilities to meet a proportion of their emission reduction obligations.
Landfill gas projects receive ACCUs for capturing and combusting methane emitted from landfills.
To date, about 30% of all ACCUs have gone to landfill gas projects, making them the scheme’s second largest project type by credit issuances.
The operators of the projects capture and combust the methane, which neutralises its warming effects, using either a flare or an electricity generator.
For more than 18 months however, a debate has raged about the integrity of landfill gas projects.
It hinges on one issue: whether, and to what extent, landfill operators would capture and combust the methane if they didn’t receive credits.This problem is known as ‘additionality’.
With landfill gas projects, a ‘baseline’ is used to address this additionality risk. The baseline is a prescribed proportion of the gas captured and combusted at each site.
The problem is, the baselines do not properly account for two key drivers of methane combustion - state laws and regulations, and revenue from the sale of electricity and renewable energy certificates (LGCs).