The Australian government today released the exposure draft for the long-awaited Integrated Farm and Land Management (IFLM) carbon credit method ahead of a public consultation starting in late January.
The draft method includes the regeneration of native forest on suppressed land as a proposed eligible activity, meeting a key demand from carbon project developers, but it excludes a previously planned soil carbon module.
The method's "framework" design will enable the addition of future activities, including improvements to soil, as well as updates to measurement approaches and carbon pools over time, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said on 22 December.
The DCCEEW will allow two abatement-calculation approaches to estimate carbon stock change under the method, using Australia's Full Carbon Accounting Model (FullCam) — a model-only approach and a hybrid approach where modelled estimates are refined by measurements in the project. The hybrid approach will need to be legislatively drafted to be included in the final draft methodology determination.
"The modular design enables more activities, technologies and carbon pools to be added over time, giving greater flexibility to land managers," the DCCEEW said.
Three main activities
The planned Australian Carbon Credit Unit (ACCU) method could be the first in the country to combine multiple activities that store carbon in the land on a single property.
This aims to streamline participation and reduce the administrative burden compared with running multiple projects on the same land, the DCCEEW said.
The module for regeneration of native forest on suppressed lands builds on the key human-induced regeneration (HIR) ACCU method, which expired in September 2023. But like the FullCam hybrid approach, it will require legislative drafting in 2026, as both components "are more complex than approaches already incorporated into the exposure draft".
The method would also enable crediting of carbon from two modules which are already legislatively drafted — reforestation by environmental plantings, an activity with an existing method that was updated late last year, and regeneration of native forest on cleared lands, which is based on the expired native forest from managed regrowth (NFMR) method.
Soil carbon is not in the draft because the Emissions Reduction Assurance Committee (Erac) — the statutory body responsible for ensuring the integrity of Australia's carbon crediting framework — is reviewing the Soil Organic Carbon 2021 method.
This is because of the complexity of the review process, Erac chair Karen Hussey said last month.
The outcomes of that review will inform the inclusion of a revised soil carbon module in the IFLM method in the future, the DCCEEW said.
Contentious areas
Uncertainties remained until recent weeks on whether a draft method would be submitted to Erac before the end of 2025.
A summary paper of a stakeholder group meeting in September noted that some members had recommended postponing the IFLM method, as "a robust approach which clearly demonstrated integrity was more important than timelines".
The inclusion of regeneration of native forest on suppressed land has proved to be a contentious issue.
"There has been considerable research into the impacts of grazing management on the diverse ecosystems in Australia, including the different approaches to quantify the changes in vegetation, and in existing HIR projects," the DCCEEW said today. "Uncertainties remain and this issue is still an active area of research."
But the IFLM draft settings provide confidence that the method is robust and that credited abatement is additional, as it will establish new eligibility criteria, require on-ground measurements and apply conservative abatement estimates in early project years, the DCCEEW noted.
Projects will need to use the FullCam hybrid approach to estimate abatement for this activity module. This will reduce the potential for over-crediting or under-crediting abatement, particularly for lower-rainfall environments where there can be less certainty in attributing the regeneration to project activities.
Projects will also need to have a low initial carbon stock at the start of their 25-year crediting period, and will need to achieve forest cover during that period.
They will also have a baseline period of 20 years compared with 10 years for HIR projects. This is the time over which the project land area must not have had forest cover because of suppression mechanisms such as grazing pressure, chemical or mechanical destruction of regrowth, or the presence of non-native plants.
Finally, the department is proposing to apply discounts when attributing carbon stock change to projects under that module, including a temporary 5-25pc attribution discount to address climate-related uncertainties.
Existing HIR, NFMR or environmental plantings projects will be able to transfer their projects to become IFLM projects if they meet eligibility requirements in the final IFLM method. They will also be able to add additional land to the project area to undertake additional abatement activities.
Consultation to start on 27 Jan
The release of the draft method and other documents allows an early review of the material before a formal, 28-day consultation period starts on 27 January, the DCCEEW said today.
Feedback will help Erac decide whether the method complies with Australia's offsets integrity standards and it will recommend it to assistant minister for climate change and energy Josh Wilson.
The DCCEEW intends to provide a final IFLM methodology determination for Erac's consideration "in 2026", it said, without disclosing a specific timeline.
