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Steps to an Emissions Reduction Fund Project

$ Input cost CO 2 Biomass Compost Steps to an Emissions Reduction Fund Project Selective planting Renewable Energy Improved Practices N 2 O CH 4 $ CO 2 e Revenue NEW PATHWAYS TO PROFIT 8 July 2015 Presentation
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$ Input cost CO 2 Biomass Compost Steps to an Emissions Reduction Fund Project Selective planting Renewable Energy Improved Practices N 2 O CH 4 $ CO 2 e Revenue NEW PATHWAYS TO PROFIT 8 July 2015 Presentation to National Carbon Farming Conference & Expo 2015 Matthew Warnken, Managing Director Overview Steps to an Emissions Reduction Fund Project (or forms, forms and more forms): introduction to Corporate Carbon overview of first ERF Auction results preliminary steps registration application ERF Auction participation implementation: start with audit in mind conclusions 2 3 Carbon. it s who we are & what we do CO 2 Biomass Renewable Energy Soil Technology 3 3 Forestry Industry Farm Value $ CO 2 e Revenue Corporate Carbon has been involved with the Carbon Farming Initiative and Emissions Reduction Fund since before their inception: first private Australian company to author a methodology and have it determined into the CFI Regulations only Australian company to author three Determinations first soil carbon project registered currently Australia s largest multi-method carbon contractor soil carbon alternative waste treatment reforestation and afforestation savanna burning land and sea transport Australian Financial Services Licence Number hard forged learnings over the past five years being put to use in ERF participation. First ERF Auction Results Emissions Reduction Fund CO 2 CH 4 N 2 O SF 6 4 Results announced 23 April 2015: 47.3 million tonnes contracted awarded 107 Carbon Abatement Contracts to 43 contractors covering 144 projects total value of contracts awarded $660,471,500 average price per tonne of abatement of $13.95 Points of note: land sector 63.8% of ERF contracts by volume waste sector 35.1% of ERF contracts by volume. Our estimate is that there remains over 20 Mt ready for next auction (comprising volume from 113 previously registered projects and 20 new projects since last auction). Benchmark price was.. largely irrelevant. Lower priced offers had greatest chances of success. This equation will remain constant for next auction participation. Next auction likely to be between September and vember Still large opportunities for land sector. Preliminary Steps Project idea: Step 1: Carbon Opportunity Discontinue development of Assessment. Is there a project emissions reduction or sequestration? promising project? does it match a methodology (or can it be made to fit)? ERF or CFI Discontinue development of measurement or modelling project Determination, consultation or priority list or// what are the methodologies and Evaluate opportunity: are any applicable to my enterprise? estimate potential abatement from project (number of ACCUs) use $13.95 per ACCU as commercial gauge (ERF Auction weighted price) use a best case compliance costs means minimum target size of 2,000 t CO 2 e per annum. Step 2: Register Project. Does the project meet Methodology eligibility rules? 5 Evaluate eligibility: Part 2 Requirements for declaration as eligible project (past) Part 3 Requirements for operation of eligible projects (future). Registration Application 6 Project information: CER-ERF-PAP001 - Project application CER-ERF-ANX001 - Project application Sequestration CER-ERF-ANX002 - Project application Area based CER-ERF-ANX003 - Project application Emissions. Participant information: CER-CI Client information form AFP National Police Check - CER or// CER-ANR ANREU application form AFP National Police Check CER. Key lessons: register before you start newness core business check seek expert assistance. ERF Auction Participation Step 2: Register Project. Does the project meet Methodology eligibility rules? Step 3: ERF Auction Offer Preparation. Schedule of abatement delivery and price Additional work and assessment to further quantify ERF auction offer Discontinue development of project Must match internal risk profile Placement of ERF Auction Offer. Is the offer accepted by the Clean Energy Regulator? Review auction offer and participation strategy. Undertake additional work and/or revise offer? Discontinue development of project as project is not viable at ERF Auction price Step 4: ERF Project Implementation, Monitoring and Management te: Participation in ERF Auction is voluntary. Can operate project, be issued with ACCUs and seek alternate buyer. 7 ERF Auction Forms Auction forms: CER-ERF-AUC001 - Auction Qualification - Commercial Terms: 20 business days ahead of auction CER-ERF-AUC002 - Auction Registration - Delivery Terms: 5 business days ahead of auction CER-ERF-AUC004 - Auctions Authorised Bidder: if other than the participant CER-ERF-AUC003 Auction Bid Financial Terms: on the day of the auction. Key lesson: Watch out for public holidays in your final calendar countdown. 8 Start with audit in mind Step 4: ERF Project Implementation, Monitoring and Management Step 5: ERF Offsets Report: Is the abatement in line with contract delivery schedule Implement actions according to risk assessment and management plan Project implementation, monitoring and management plan set by Emissions Reduction Method Statement requirements: project organisation; operational control; training and competence; preventative and corrective action; monitoring equipment; data; records; independent auditing and sale according to schedule. Step 6: Auditing, ACCU Issuance and Sale: Has the project documentation been audited by an approved Auditor? The abatement claimed may not be recognised under the CFI and no credits issued 9 Steps 4-6 are repeated according to the offsets report schedule ACCUs issued to the recognised entity s registry account and contracted amount sold Search for buyer for any noncontracted supply of ACCUs Purpose of ERF project is to create ACCUs. Critical aspect is audit of project offsets report against methodology. More work and establishment of records at project start = less headache at audit time. And know your other forms 10 After registration: application for variation of registration - project area application to vary the commencement date for a registered project application to vary the scheme participant for a registered project application to use a different method for a project application for variation of a conditional declaration of a conditional registration of a project. And remember: Eligible Interest Holder consent. Conclusions: Steps to an ERF project Key take aways: project idea is it commercial does the project fit the methodology (or can it be made to fit) register the project before you start begin the project with the audit in mind Clean Energy Regulator has a form for every occasion core business reality check seek professional assistance and remember it can be done! 11 Additional Information CORPORATE CARBON NEW PATHWAYS TO PROFIT Matthew Warnken Managing Director Gary Wyatt Executive Director Corporate Carbon Advisory AFS Licence : T: F: E: W: PO Box 705, Glebe NSW DISCLAIMER: This presentation provides information that is commercial-in-confidence and only of a general nature. It does not contain financial advice. Corporate Carbon Advisory accepts no responsibility for any loss occasioned by any person acting or refraining from action as a result of reliance on the information in this presentation. Unless stated otherwise, Corporate Carbon Advisory does not warrant the accuracy of any forecast or prediction in the report. Although Corporate Carbon Advisory exercises reasonable care when making forecasts and predictions, factors such as future market behaviour are uncertain and cannot be forecast or predicted reliably.
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