The Australian government has prioritised the development of a new Alternative Waste Treatment (AWT) carbon-crediting method that could boost emissions abatement by offering a potentially longer crediting period and by adding biomethane generation as an eligible activity.
The new methodology will be the first method remake to progress under the proponent-led development process launched in 2024, which opened the development of new Australian Carbon Credit Unit (ACCU) methods to proponents outside government.
The Australian Resources Recovery Council (ARRC) will lead the process, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said today.
A total of 5.57mn ACCUs have been issued to projects registered under the AWT method, representing just 3pc of the 180.78mn ACCUs issued since the scheme started in 2012. But AWT units were the fifth-largest source of ACCU surrendered under the safeguard mechanism for the July 2023-June 2024 compliance year, behind avoided deforestation, landfill gas, human-induced regeneration and savanna fire management methods.
ACCUs from AWT projects are typically sold under the generic no-avoided deforestation (No AD) label — the most liquid ACCU product in the secondary market. Developers earn ACCUs from projects that avoid methane emissions from decomposing organic waste in landfill, typically through anaerobic digestion or process-engineered fuel technologies.
New project registrations under the method ceased on 31 March 2025 when it expired, although existing projects can continue generating ACCUs until the end of their seven year crediting period.
Significant uptake potential
Only 11 projects have ever earned AWT ACCUs, with the biggest operators including waste management firms Veolia and Cleanaway — which are also among Australia's largest landfill gas ACCU project operators — as well as carbon developer Corporate Carbon Group, according to the latest project register data from the Clean Energy Regulator (CER) (see table).
But a "significant increase in uptake" could occur if a new AWT method is developed with key proposed changes, several submissions to a 2024 consultation by the Emissions Reduction Assurance Committee (Erac) said. Erac is the statutory body overseeing integrity in Australia's carbon crediting framework.
Erac concluded that the AWT method continues to meet Australia's offset integrity standards. It recommended that assistant minister for climate change and energy Josh Wilson consider several changes if the method is remade to encourage greater uptake and abatement, including extending the crediting period beyond seven years and allowing the biomethane generation as an eligible activity.
Longer crediting period favoured
Most submissions supported extending the crediting period if the method is remade, to at least 20-25 years, Erac noted. This is mostly because of increasing capital and operating costs of AWT facilities, which typically run for more than 20 years, companies have argued.
Some firms also noted that landfill gas projects enjoy a 12-year crediting period, despite lower capital and operating costs than AWT projects involving process-engineered fuel production or anaerobic digestion.
"Several submissions argued that resource recovery should be prioritised over landfill gas capture as it aligns with the Australian government's targets for emission reductions, waste diversion, and recycling," Erac said in its review. The crediting period under a remade AWT method should at least match the landfill gas method's crediting period, companies asked.
A new method could also include activities covered by the Source Separated Organic Waste (SSOW) method, which will expire on 31 March 2026. Erac reviewed that method last year, alongside beef cattle herd management, reforestation and afforestation 2.0, and land and sea transport, but recommended against creating a new SSOW method, according to an update published today.
Biomethane inclusion
Most submissions also called for the inclusion of biomethane generation under the new method. ACCUs would be issued for the abatement generated when biomethane is burned and when it displaces fossil-fuel natural gas consumption in domestic applications.
A biomethane variation to the AWT method was previously considered in 2022 and underwent public consultation, but was not advanced for Erac's consideration at the time.
High costs, regulatory barriers and a limited ACCU pathway have prevented a higher uptake of carbon crediting projects for biomethane facilities in Australia.
But new certification options — including renewable gas guarantees of origin (RGGOs) under GreenPower's Renewable Gas Certification and new product guarantee of origin (PGO) certificates under the CER managed guarantee of origin GO scheme — are expected to encourage investment. RGGOs and PGOs can now be used by companies to reduce their scope 1 emissions under the National Greenhouse and Energy Reporting (NGER) scheme following long-awaited rule changes in 2025.
More anaerobic digestion projects could be registered under the new ACCU method, driven by demand from gas users for renewable biomethane to meet their corporate decarbonisation targets, one submission said, according to Erac.
"Several submissions stated that with proper support, the AWT industry could abate an additional 13-14mn t of carbon dioxide equivalent (CO2e) per year," Erac added.
| Australia's largest alternative waste treatment ACCU project operators | |
| Operator | ACCUs issued |
| Veolia | 2,833,937 |
| Global Renewables Eastern Creek (Cleanaway) | 1,762,305 |
| Corporate Carbon Group | 709,024 |
| Port Macquarie Hastings Council | 202,605 |
| Benedict Recycling | 52,587 |
| Northmore Gordon | 8,055 |
| IWS Group Asset | 2,503 |
| Source: CER | |
