Basic OffsetA carbon offset is an investment in a project or activity that reduces greenhouse gas (GHG) emissions or sequesters carbon from the atmosphere that is used to compensate for GHG emissions from your own activities. For more information see here. Purchasing Questions  

Q.    How do I know how much I need to buy?

A. The first step would be to decide the scope of what you are offsetting. For example this may be an event, a trip, an activity, and organisation, a product or a service. Once you are clear on what it is you want to offset, you should use calculators that are based upon DEFRAUK Government Department for Environment, Food and Rural Affairs. For more information see here., NGAThe National Greenhouse Accounts (NGA) Factors is an Australian guide to emission factors from a range of sectors that is used by companies to calculate greenhouse gases. It is prepared by the Department of Climate Change and replaces the AGO Factors & Methods Workbook. For more information, see here. or GHG ProtocolThe Greenhouse Gas Protocol. The GHG Protocol is an international accounting tool for government and business to understand, quantify, and manage greenhouse gas emissions. It has been developed by a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) and provides an internationally accepted accounting framework for GHG standards and programs, as well as inventories prepared by individual companies. values. If you are using calculators that provide more specific emissions value calculations, check that these follow a clear methodology. If your goal is to achieve carbon neutrality, NCOS and the associated Carbon Neutral ProgramThe Carbon Neutral Program utilising the National Carbon Offset Standard officially commences on 1 July 2010. This Program is the successor to the Australian Government’s Greenhouse Friendly™ initiative (2001 – 2010). The Carbon Neutral Program is a voluntary scheme which certifies products or business operations as carbon neutral. The National Carbon Offset Standard, developed by the Australian government, underpins the integrity of the Program. Guidelines provide guidance on how you establish the carbon footprintA measure of the greenhouse gas emissions attributable to an activity; it is commonly used at an individual, household or business level. It calculates the direct and indirect amount of CO2-e emissions produced. that you will need to offset. 

Q.     Why do different emission calculators issue different results?

A. Calculators will vary depending on the amount of information you give them. For example, calculating airline emissions often varies between different values because a wide variety of information is needed to calculate CO₂ emissions on a per person basis. The variation in the results of different calculators has been interpreted as a lack of rigor in the calculation of air travel and undermines carbon offsetting as an approach to fight climate change. Stockholm Environment Institute (SEI) recently examined the key factors that have to be taken into account when calculating air travel emissions for the purpose of carbon offsetting. These factors include: type of aircraft, flight profile, flight distance, cargo on passenger flights, seat occupancy rate, seat class, and radiative forcing index. For more detailed discussion, please see Airline Calculator Issues. 

Q.    Why do offsets vary in cost?

A.    The price of a tonne of carbon offset may vary according to project type and the costs involved in creating and administering it. Better projects can have higher prices but price alone is not a guide to project quality. Certified Emission ReductionsCertified Emission Reductions are credits generated under Kyoto's CDM. One CER unit is equivalent to the reduction of one metric tonne of CO2e. They are designed to be used by industrialised countries to count towards meeting their Kyoto targets. They can also be used as part of domestic targets, for example EU companies and governments use them as offsets against their emissions under the EU Emissions Trading Scheme. (CERs) operate like stocks and shares and their prices can vary daily.

Q.     How do I decide which offsets to buy when there is so much variation and choice?

A.     Buying offsets is like buying any product, whereby you are given a wide range of choices for the same outcome (one tonne of carbon offset). Your personal or organisational values or preferences should be used to determine the type or location of the project you choose.

The certification of an offset to an internationally recognised standard will address issues of quality by assuring that ‘a tonne is a tonne’ of carbon being offset. This is the bottom line and the rest of the decisions around buying offsets are personal. If the product has been certified to an internationally recognised standard you should be assured of the environmental outcome of neutralising one tonne of carbon.

Some projects (and therefore the offsets available from them) have other co-benefits that might influence your choice of offset purchase. Such considerations might be whether a project contributes to the sustainable development of its country of origin (renewable energy or social sustainability); the creation of habitat for local flora and fauna (biodiverse plantings for sequestration purposes or improvement in soil health from soil sequestration or avoided deforestation). Gold StandardA certification standard for carbon offset projects. Initiated by WWF, SSN and Helio International, the Gold Standard for CDM projects was launched in 2003 after wide-ranging stakeholder consultation among key actors of the carbon market as well as governments. For more information see here. projects, for example, will ensure that there are wider social and economic benefits from a project in addition to carbon saving.

Q.     How do I determine a reputable offset provider?

A.     An offset provider should be able to address all your queries and concerns regarding the detail and quality of offset and the project it has originated from. They should also be transparent about the process they have for cancelling or retiring offsets. One way to be certain that the offsets you have purchased are actually cancelled or retired without receiving the title and checking the serial number as retired on a publicly available registry, is to ensure that the organisation (provider) has independent, third party verification. This process proves that all offsets sold by the organisation have been appropriately cancelled or retired. Like other businesses, this should occur annually.

Q.     Does the location of the project matter?

A.     The location of the project is a matter of preference. Projects from the developing world are enabled under various internationally recognised standards. This allows avoided emission credits from such projects to be used in developed world emissions reductionA measurable reduction in the level of greenhouse gases being emitted by a country, state, organisation or individual. programs. The location of a project does not determine its quality, however it is important that such projects have been accredited according to an internationally recognised standard (for example, Certified Emission Reductions, or CER’s under the CDMClean Development Mechanism is a Kyoto Protocol mechanism under which projects set up in developing countries to reduce GHGs generate tradeable credits called CERs. The credits can be used by industrialised nations to help meet their Kyoto reduction targets. Find out more here. or Verified Carbon Units, or VCU’s under the Verified Carbon StandardThe VCS Program includes the standard (VCS 2007) and the Program Guidelines 2007. The VCS Program provides a global standard and criteria for validating, measuring, and monitoring voluntary carbon offset projects. For more information, see here.) to ensure their quality.

Direct Offset Project Questions - Information for Landholders

Q.     I have heard that there may be opportunities for farmers and private landholders to develop carbon offset projects on private land.

A. The National Carbon Offset StandardThe Commonwealth Government’s National Carbon Offset Standard (NCOS) came into effect on 1 July 2010 coinciding with the cessation of the Government’s Greenhouse Friendly™ program. It is intended to ensure that consumers have confidence in the voluntary carbon offset market and the integrity of the carbon offset and carbon neutral products they purchase. It provides guidance to businesses who wish to make their organisation carbon neutral or develop carbon neutral products in a way that achieves emissions reductions, through the purchase and cancellation of eligible carbon offsets. More Information (NCOS) became effective as a voluntary standard from 1st July 2010. Section 3.2 Generation of domestic offsets states, in the current version of the NCOS states:

Proponents may propose methodologies for offset projects and develop offset projects within Australia from emissions sources not counted toward Australia’s obligations under the Kyoto ProtocolAn international agreement linked to the UNFCCC and sharing its aim of stabilising atmospheric concentrations of greenhouse gases, but requiring separate ratification by governments. The Kyoto Protocol, among other things, sets binding targets for the reduction of greenhouse-gas emissions by industrialized countries. It entered into force for ratifying countries in February 2006 and commits developed nations to collectively cut their greenhouse gas emissions by 5.2 per cent of 1990 levels by 2012. Came into force in Australia on 11 March 2008. target. 

Emissions sources currently not counted toward Australia’s obligations under the Kyoto Protocol target and eligible for the generation of domestic offsets under the standard are:
•    Forest management (forests established before 1990);
•    Revegetation (establishment of woody biomassBiomass is non-fossilized and organic biodegradable material that can be used as fuel or for industrial production. Most commonly, biomass refers to plant matter grown for use as Biofuels, but it also includes plant or animal matter used for production of fibres, chemicals or heat. Biomass may also include biodegradable wastes that can be burnt as fuel. that does not meet forest criteria); and
•    Cropland and grazing land management (net greenhouse gas emissions from soil, crops and vegetation).

Emission sources not counted toward our international target will be subject to outcomes in international negotiations and, similar to domestic arrangements, are likely to change over time.

Since the NCOS came into effect, and as part of the Clean Energy Future PlanAustralia’s proposed ‘carbon pricing’ scheme that is to come into effect in July 2012. The scheme will put a price on carbon pollution which is intended to act as an incentive for all businesses to reduce their pollution through investing in clean technology and by implementing more efficient ways of operating. The carbon pricing mechanism will move to a cap and trade scheme in 2015. The Clean Energy Future Plan replaces the previous Carbon Pollution Reduction Scheme. announced by the Prime Minister on 10July 2011, the Australian Government has committed to a number of complementary land sector measures.  This incorporates the Carbon Farming InitiativeThe Carbon Credits (Carbon Farming Initiative) Bill 2011 provides legislation that gives landholders, farmers and forest growers incentives to undertake land sector abatement projects. The scheme will credit the greenhouse gas abatement achieved by either: - Reducing or avoiding emissions, for example, through capture and destruction of methane emissions from landfill or livestock manure; or - Removing carbon from the atmosphere and storing it in soil or trees, for example, by growing a forest, or farming in a way that increases soil carbon. The CFI will create credits called Australian Carbon Credit Units (ACCUs). One ACCU will equal one tonne of CO₂-e (CFI) which includes:

• Legislation to estbalish a carbon crediting mechanism;
• Fast-tracked development of methodologies for offset projects; and
• Information and tools to help farmers and landholders benefit from carbon markets.

Legislation to underpin the Carbon Farming Initiative was passed by Parliament on 23 August 2011.  On 15 September 2011 the Carbon Credits (Carbon Farming Initiative) 2011 (CFI Act) received royal assent.  The scheme will be operational from December 2011.

NCOS is currently being reviewed and it is proposed that Australian Carbon Credit Units (ACCUs) issued under the CFI will be recognised for the purposes of NCOS.

If you are a landholder or project developerThe Project Developer is the person or organisation that establishes a project, by designing, registering, implementing and monitoring the project for the purposes of creating and selling carbon offsets or other environmental credits and reducing greenhouse gas emissions. with an interest in developing CFI projects you should contact the Department of Climate Change and Energy EfficiencyEnergy efficiency improvements refer to a reduction in the energy used for a given service (heating, lighting, etc.) or level of activity. Such savings are generally achieved by substituting technologically more advanced equipment to produce the same level of end-use services (e.g. lighting, heating, motor drive) with less electricity. or visit http://www.climatechange.gov.au/government/initiatives/carbon-farming-initative.aspx.

Another optionIn finance, an option is a contract between a buyer and a seller that gives the buyer the right—but not the obligation—to buy or to sell offsets at a later day at an agreed price. In return for granting the option, the seller collects a payment from the buyer. A call option gives the buyer the right to buy the offset / credit; a put option gives the buyer of the option the right to sell the offset / credit. is to search the Carbon Offset Guide for providers who have approved methodologies for the generation of domestic offset under NCOS. It is important to be assured that the offset provider or project developerRefer to Project Developer can confirm their methodology is approved for the purposes of NCOS. 

The National Carbon Offset Standard also provides guidance on eligibility criteria for domestic offsets including additionality, permanenece, measurability, transparency, and the independent audit and registration of units.

The EPA Victoria website discusses issues of quality such as permanenceWith regard to offsets, permanence requires the generation of offsets to have actually occurred and the carbon stored or sequestered not to be released into the atmosphere in the future. Sequestration is generally regarded as permanent if it is maintained on a net basis for around 100 years., leakageIn relation to carbon offsets, leakage is the direct or indirect increase in GHG emissions from a greenhouse gas reduction project, which is also measurable and attributable to the project., double countingDouble counting can happen when two or more businesses claim the same emissions reduction. This can happen if an offset is sold to two or more entities, or when an entity upstream of the project unknowingly claims the reduction as its own. The establishment of protocols, and the use of an offsets registry can ensure offsets are adequately accounted for., timing of emissions reductions and co-benefits. For more information click here.

Q.     What is soil carbon sequestration?

A. Soil Organic Carbon (SOC) refers to the carbon in soils associated with the products of living organisms. It is a heterogeneous mixture of simple and complex organic carbon compounds which can be divided into different pools which serve different functions to soil ecosystems.

SOC is of fundamental importance to soil health/fertility and therefore to sustainable agriculture as it affects all three aspects of soil fertility, namely chemical, physical and biological fertility.

SOC is part of the global carbon cycleCarbon, in various forms, continuously circulates between the living world, the atmosphere, oceans and the Earth's crust. There are many different processes by which carbon is exchanged between these locations, which are collectively referred to as the carbon cycle. and the global SOC pool (1580 Giga-tonnes) is twice as large as that in the atmosphere and nearly three times that of the vegetation biomass carbon pool. SOC sequestration refers to the storage of carbon in soil and is being considered as a strategy for mitigating climate change. Globally, as well as, for some individual countries, it has been estimated that SOC sequestration has the potential to mitigate 5-14% of total annual greenhouse gas emissions for the next 50-100 years.  However, whether this potential is achieved depends on economic, social and political factors.

Sequestration through soil carbon is recognised by the Carbon Farming Initiative. For information on the project types and potential contribution to the offset market refer to the DCCEECommonwealth Governemnt Department of Climate Change and Energy Efficiency. For more information see http://www.climatechange.gov.au/ discussion paper at http://www.climatechange.gov.au/~/media/publications/carbon-farming-initative/CFI-Preliminary-estimates-of-abatement.pdf.

Q.     I am investigating opportunities for converting my land practices to be more sustainable. If in that process I improve the soil quality on my farm, is there opportunity to create carbon credits from the soil sequestration on my property?

A. There are significant opportunities for landholders to manage properties to reduce net emissions. Strategic placement of trees, farming practices that build soil carbon, increased efficiency of animal production and nitrogen utilisation of plants will all contribute to climate change mitigation and enhance long term profitability of agriculture.

Measuring this mitigation in a consistent methodology and quantifying it as potential carbon credits is a slowly developing body of knowledge that is currently growing in the hands of universities, scientists and land holder trials. There are many research projects underway to inform your question by our CSIRO and global scientists but it may be some time before their work bears fruit for landholders.

If you want to find out more about what methodologies have been approved or are being considered under the CFI or how to submit a methodolgy for consideration go to the DCCEE website at http://www.climatechange.gov.au/government/initiatives/carbon-farming-initative/methodology-development.aspx.

Q.     I am a landowner with 1000 acres, of which 80 % is heavily treed. We run no stock and do no farming at all. I am enquiring about the possible sale of the carbon credits of the property.

A. The carbon in the trees you currently own cannot be claimed or sold as a carbon offset for another persons polluting activities. To be regarded as a valid offset, a project must be proven to be ‘additional’ to what would have occurred anyway. Additionality is a key concept in evaluating whether or not an offset project leads to real and measurable greenhouse gas reductions.

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