This is the Carbon Credits (Carbon Farming Initiative—Industrial Electricity and Fuel Efficiency) Methodology Determination 2015.

This determination commences on the day after it is registered.

3 Authority

This determination is made under subsection 106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011.

4 Duration

This determination remains in force for the period that:

(a) begins when this determination commences; and

(b) ends on the day before this determination would otherwise be repealed under subsection 50(1) of the Legislative Instruments Act 2003.

5 Definitions

In this determination:

accuracy factor has the meaning given by section 49.

Act means the Carbon Credits (Carbon Farming Initiative) Act 2011.

baseline emissions model, for an implementation, means a baseline emissions model used for the purposes of Part 4.

baseline measurement period, for an implementation, has the meaning given by section 17.

baseline relevant energy, for an implementation, has the meaning given by section 6.

co‑metered equipment: equipment is co‑metered equipment for an implementation if the consumption of fuel and electricity by the equipment is measured jointly, using the same measuring equipment, with the consumption of fuel or electricity by any:

(a) implementation equipment for the implementation; or

(b) interactive equipment for the implementation.

completed: an implementation is completed when the implementation equipment has begun operating under normal conditions.

decay coefficient has the meaning given by subsection 51(5).

decay coefficient year has the meaning given by subsection 51(5).

decay factor has the meaning given by section 51.

effective range, of an independent variable, has the meaning given by section 8.

eligible measurement time interval, for an implementation, means a measurement time interval for the implementation in a reporting period for the project in which:

(a) site constants are at their normal values; and

(b) for all independent variables—the measured value of the independent variable in the measurement time interval is an amount that is:

(i) at least 95% of the minimum value of the effective range for the variable; and

(ii) no more that 105% of the maximum value of the effective range for the variable; and

(d) the value of the dependent variable for the measurement time interval worked out using the baseline emissions model reasonably reflects the emissions from the consumption of baseline relevant energy that would have occurred in the measurement time interval if the implementation had not been undertaken; and

(e) the value of the dependent variable for the measurement time interval worked out using the operating emissions model for the reporting period reasonably reflects the emissions from the consumption of operating relevant energy that would occur in the measurement time interval after the implementation has been undertaken.

eligible renewable electricity:

(a) means renewable electricity generated from implementation equipment installed as part of the implementation; but

(b) does not include renewable energy generated by equipment that under the legislative rules (if any) made for subparagraph 27(4A)(c)(ii) of the Act, must not be included in an eligible offsets project.

emissions model means a baseline emissions model or an operating emissions model.

energy‑consuming equipment means equipment that:

(a) consumes electricity; or

(b) consumes fuel to produce:

(i) electricity; or

(ii) useful physical work; or

(iii) cooling, heat or steam for use.

Note: The following are examples of useful physical work:

(a) running a diesel engine to create shaft power;

(b) pumping water to a higher location;

higher method has the same meaning as in paragraph (b) of the definition of higher method in subsection 1.18(5) of the NGER (Measurement) Determination 2008.

implementation means an activity or group of activities of a kind referred to in subsection 11(2) undertaken at a location.

implementation equipment has the meaning given by section 11.

improvement factor has the meaning given by section 50.

independent variable, for an implementation, is a parameter that:

(a) varies between measurement time intervals; and

(b) can be measured or derived from one or more measurements using a mathematical formula with no observable loss of precision; and

(c) causes or explains changes in emissions from the consumption of baseline relevant energy (for a baseline emissions model) or operating relevant energy (for an operating emissions model); and

(d) is independent from any other independent variable for the emissions model.

industrial electricity and fuel efficiency project has the meaning given by section 11.

interactive effect: a change in emissions resulting from the consumption of fuel or electricity at the site of an implementation is an interactive effect for the implementation for a reporting period if:

(a) the change in emissions in the reporting period occurs as a result of the implementation having been undertaken; and

(b) the change is not accounted for by whichever of the following is applicable:

(i) for sub‑method 1—the difference between the total modelled baseline emissions and the total measured operating emissions from the consumption of operating relevant energy for the implementation for the reporting period;

(ii) for sub‑method 2—the difference between the total modelled baseline emissions and the total modelled operating emissions for the implementation for the reporting period.

interactive equipment: equipment is interactive equipment for an implementation if:

(a) the amount of fuel or electricity consumed by the equipment is, or is likely to be, dependent on the amount of fuel or electricity consumed by the implementation equipment for the implementation; and

(b) the dependence is a result of the transfer of heat, steam, cooling, or useful physical work between the equipment and the implementation equipment.

Note: For the purposes of calculating emissions abated by the implementation under Part 4, a change in emissions may be accounted for in baseline relevant energy or identified as an interactive effect. The project proponent may choose not to identify the change as an interactive effect because the sub‑methods in the Part include a threshold for the value of interactive effects.

measurement time interval has the meaning given by section 20.

monitoring requirements means the requirements set out in Division 3 of Part 5.

NGA Factors document means the document entitled “National Greenhouse Accounts Factors”, published by the Department and as in force from time to time.

NGER (Measurement) Determination means the National Greenhouse and Energy Reporting (Measurement) Determination 2008.

NGER method means a method in the NGER (Measurement Determination) for estimating the emissions released from the combustion of fuel.

non‑monitored period has the meaning given by subsection 64(1).

normal value, for a site constant, has the meaning given by section 9.

operating emissions model, for an implementation, means an operating emissions model used for the purposes of Part 4.

operating measurement period, for an implementation, has the meaning given by section 19.

operating relevant energy, for an implementation, has the meaning given by section 7.

persistence model tool means the tool for calculating the decay factor for an implementation included in an industrial electricity and fuel efficiency project in a reporting period, which takes into account variables such as equipment type and location, published by the Department and as in force from time to time.

relative precision:

(a) of the emissions level predicted by an emissions model—has the meaning given by section 47; or

(b) of the emissions abated by an implementation—has the meaning given by section 48.

site, of an implementation, means the physical locations of:

(a) the implementation equipment for the implementation; and

(b) the interactive equipment for the implementation; and

site constant: a parameter is a site constant for an implementation in a measurement time interval if:

(a) varying the parameter would change the consumption of:

(i) for a measurement time interval in the baseline measurement period for the implementation—baseline relevant energy for the implementation in the measurement time interval; or

(ii) for a measurement time interval in an operating measurement period or a reporting period—operating relevant energy for the implementation in the measurement time interval; and

(b) under normal operating conditions for the implementation equipment for the implementation, the only variations in the value of the parameter in the measurement time interval are:

(i) for a measurement time interval in the baseline measurement period for the implementation—those that have no observable effect on the consumption of baseline relevant energy for the implementation in the measurement time interval; or

(ii) for a measurement time interval in an operating measurement period or a reporting period—those that have no observable effect on the consumption of operating relevant energy for the implementation in the measurement time interval.

sub‑method means one of the sub‑methods set out in Part 4.

6 Meaning of baseline relevant energy

(1) The baseline relevant energy for an implementation is:

(a) fuel and electricity consumed by existing energy‑consuming implementation equipment; and

(b) if the emissions from the consumption of fuel or electricity by existing interactive equipment is likely to change as a result of the implementation and the project proponent has not identified the change as an interactive effect—fuel and electricity consumed by the interactive equipment; and

Note 1: Consumption that is impractical or disproportionally costly to measure may be excluded under section 32.

Note 2: A change in consumption which falls within the definition of interactive effect but which the project proponent has not identified as an interactive effect is covered by paragraph (b).

(2) However, if electricity generated at the site of the implementation is consumed by existing implementation equipment, existing interactive equipment or existing co‑metered equipment, only one of the following, as chosen by the project proponent, is baseline relevant energy for the implementation:

(a) the electricity generated at the site consumed by the equipment;

(b) fuel used to generate that electricity.

7 Meaning of operating relevant energy

(1) The operating relevant energy for an implementation is:

(a) fuel and electricity consumed by equipment covered by the baseline relevant energy for the implementation; and

(b) fuel and electricity consumed by implementation equipment installed as part of the implementation.

Note: If the implementation involves removing implementation equipment, the fuel and electricity consumption by that equipment will be zero for the purposes of determining operating relevant energy for the implementation.

(2) However, if electricity generated at the site of the implementation is consumed by equipment mentioned in subsection (1), only one of the following, as chosen by the project proponent, is operating relevant energy for the implementation:

(a) the electricity generated at the site consumed by the equipment;

(b) fuel used to generate that electricity.

8 Meaning of effective range for an independent variable

(1) The effective range of an independent variable for an implementation covered by sub‑method 1 in a reporting period is the range of measured values for the independent variable used in the regression analysis to develop the baseline emissions model for the implementation.

(2) The effective range of an independent variable for an implementation covered by sub‑method 2 in a reporting period, which was used in both the baseline emissions model and the operating emissions model for the implementation for the reporting period, is the range of measured values for the independent variable between:

(a) the highest minimum value for the independent variable used in the regression analysis to develop an emissions model for the implementation, which is the higher of:

(i) the minimum value for the independent variable used in the regression analysis to develop the baseline emissions model for the implementation; and

(ii) the minimum value for the independent variable used in the regression analysis to develop the operating emissions model for the implementation for the reporting period; and

(b) the lowest maximum value for the independent variable used in the regression analysis to develop an emissions model for the implementation, which is the lower of:

(i) the maximum value for the independent variable used in the regression analysis to develop the baseline emissions model for the implementation; and

(ii) the maximum value for the independent variable used in the regression analysis to develop the operating emissions model for the implementation for the reporting period.

(3) The effective range of an independent variable for an implementation covered by sub‑method 2 in a reporting period, which was used only in the baseline emissions model or only in the operating emissions model for the implementation for the reporting period, is the range of measured values for the independent variable used in the regression analysis to develop the emissions model.

Note: Under section 25 no values of independent variables that are outliers can be used in the regression analysis to develop an emissions model. Therefore, outliers are excluded from the effective range of an independent variable.

9 Meaning of normal value for a site constant

(1) A site constant for an implementation is at its normal value in a measurement time interval if:

(a) for a baseline emissions model—the value of the site constant in the measurement time interval is the same as the value in the baseline measurement period; or

(b) for an operating emissions model—the value of the site constant in the measurement time interval is the same as the value in the operating measurement period for the model.

(2) For subsection (1), the value of the site constant in the measurement time interval is taken to be the same as in the baseline measurement period if the only variations in the value of the site constant in the measurement time interval are those that have no observable effect on the consumption of baseline relevant energy for the implementation in the measurement time interval.

(3) For subsection (1), the value of the site constant in the measurement time interval is taken to be the same as in the operating measurement period if the only variations in the value of the site constant in the measurement time interval are those that have no observable effect on the consumption of operating relevant energy for the implementation in the measurement time interval.

10 References to factors and parameters from external sources

(1) If a calculation in this determination includes a factor or parameter that is defined or calculated by reference to another instrument or writing, the factor or parameter to be used for a reporting period is the factor or parameter referred to in, or calculated by reference to, the instrument or writing as in force at the end of the reporting period.

(2) Subsection (1) does not apply if:

(a) the determination specifies otherwise; or

(b) it is not possible to define or calculate the factor or parameter by reference to the instrument or writing as in force at the end of the reporting period.

Part 2—Industrial electricity and fuel efficiency project

11 Industrial electricity and fuel efficiency project

(1) For paragraph 106(1)(a) of the Act, this determination applies to an offsets project that satisfies the following:

(a) the project involves undertaking one or more implementations;

(b) each implementation consists of one or more activities referred to in subsection (2);

(2) The activities are the following:

(a) modifying, removing or replacing existing energy‑consuming equipment;

(b) installing energy‑consuming equipment as part of replacing, modifying or augmenting existing energy‑consuming equipment;

(d) changing the energy sources or mix of energy sources used by existing energy‑consuming equipment;

(e) modifying, installing, removing or replacing equipment that affects the energy consumption of existing energy‑consuming equipment;

(f) installing equipment that generates electricity at a location where existing energy‑consuming equipment consumes electricity obtained from an electricity grid and the electricity generated by the installed equipment will be used in substitution for the electricity obtained from an electricity grid.

(3) However, subsection (2) does not include activities relating to the following:

(a) equipment that generates electricity at a location if, at the time of application under section 22 of the Act:

(i) in total all the generating equipment at the location has a stated capacity of 30 megawatts or more according to the manufacturers’ nameplates; and

(ii) that location has the capacity to export electricity to an electricity grid that is a grid in relation to which the NGA Factors document, in force on the day of the application, includes an emissions factor;

(b) a vehicle that could be covered by a land and sea transport project under the Carbon Credits (Carbon Farming Initiative—Land and Sea Transport) Methodology Determination 2015;

(c) an aircraft that could be covered by an aviation project under the Carbon Credits (Carbon Farming Initiative—Aviation) Methodology Determination 2015.

(4) The implementation equipment for the implementation is:

(a) the equipment that is the subject of the activities that constitute the implementation; and

(b) for an implementation that includes the activity referred to paragraph (2)(f)—the existing energy‑consuming equipment referred to in that paragraph.

(5) A project covered by subsection (1) is an industrial electricity and fuel efficiency project.

Part 3—Project requirements

Division 1—Operation of this Part

12 Operation of this Part

For paragraph 106(1)(b) of the Act, this Part sets out requirements that must be met for an industrial electricity and fuel efficiency project to be an eligible offsets project.

Division 2—General requirements

13 Information to be included in application for declaration

(1) The application under section 22 of the Act in relation to the project must include the following:

(a) for each implementation that is identified at the time of making the application:

(i) a detailed description of the types of implementation equipment; and

(ii) an explanation of how the implementation could reasonably be expected to result in eligible carbon abatement;

(b) if there are, or will be, activities included in the project that are likely to constitute an implementation that is not identified at the time of making the application—a description of the activities, including:

(i) the types of activities; and

(ii) the types of equipment that will be the subject of the activities; and

(iii) an explanation of how the activities when constituted as implementations could reasonably be expected to result in eligible carbon abatement.

(2) The descriptions required by paragraph (1)(b) may be done by class, where appropriate, including by reference to classes of similar activities or similar equipment.

14 Heat etc. for use at site of implementation not to be substituted

Heat, steam, cooling or other useful physical work for use at the site of the implementation must not be imported from another site in substitution for any heat, steam, cooling or other useful physical work produced by:

(a) energy‑consuming implementation equipment for the implementation; or

(b) interactive equipment for the implementation; or

Division 3—Making choices for the project

15 Sub‑methods

(1) For each implementation that is included in the project, the project proponent must choose one sub‑method to work out the emissions abated by the implementation.

(2) If a project proponent uses a sub‑method to work out the emissions abated by the implementation for the first reporting period and then uses an alternative sub‑method to work out the emissions abated by the implementation for a later reporting period, the alternative sub‑method must be used for all subsequent reporting periods.

16 Baseline relevant energy

For each implementation, the project proponent must identify the baseline relevant energy for the implementation for the purposes of developing the baseline emissions model for the implementation.

17 Baseline measurement period

(1) For each implementation, the project proponent must choose a measurement period (a baseline measurement period) for the purposes of developing the baseline emissions model for the implementation.

(2) The baseline measurement period chosen must be a period that:

(a) accounts for the typical range of operating conditions for the equipment covered by the baseline relevant energy for the implementation; and

(b) reasonably represents operating conditions for the equipment where, having undertaken the implementation, it is likely that the fuel or electricity consumption by the equipment would increase.

Note: For example, if the equipment produces different levels of emissions in different seasons, the baseline measurement period chosen must cover all relevant seasons.

(3) The project proponent must choose a start date and time and an end date and time for the baseline measurement period.

(4) The start date for the baseline measurement period must be no earlier than 24 months before the date the implementation commences.

(5) The end date for the baseline measurement period must be before the date the implementation commences.

18 Operating relevant energy

(1) For each implementation covered by sub‑method 1, the project proponent must identify the operating relevant energy for the implementation for the purposes of working out the total measured emissions for the crediting period.

(2) For each implementation covered by sub‑method 2, the project proponent must identify the operating relevant energy for the implementation for the purposes of developing an operating emissions model for the implementation.

19 Operating measurement period

(1) For each implementation covered by sub‑method 2, the project proponent must choose a measurement period (an operating measurement period) for the purposes of developing an operating emissions model for the implementation.

(2) The operating measurement period chosen must be a period that:

(a) accounts for the typical range of operating conditions for the equipment covered by the operating relevant energy for the implementation; and

(b) reasonably represents operating conditions for the equipment where, having undertaken the implementation, it is likely that the fuel or electricity consumption by the equipment would increase.

Note: For example, if the equipment produces different levels of emissions in different seasons, the operating measurement period chosen must cover all relevant seasons.

(3) The project proponent must choose a start date and time and an end date and time for the operating measurement period.

(4) The start date for the operating measurement period must be a day after the implementation has been completed.

20 Measurement time intervals

(1) For each implementation, the project proponent must choose the length of the measurement time interval for the purposes of working out emissions abated for the implementation.

(2) The start of the first measurement time interval in a time period is the start of the time period. The start of the second or subsequent measurement time interval is immediately after the end of the previous measurement time interval.

(3) In using a sub‑method to work out the emissions abated by an implementation, the same measurement time interval must be used for every parameter for the purposes of working out the emissions abated by the implementation. This measurement time interval must be used throughout the baseline measurement period, each operating measurement period and each reporting period for the implementation.

Note 1: This means that all the measurement time intervals in a period for every parameter in that period will coincide.

Note 2: However, only eligible measurement time intervals are taken into account when working out the emissions abated by an implementation.

21 Interactive effects

(1) The project proponent must identify the interactive effects for each implementation.

(2) If a change in emissions is an interactive effect for the baseline measurement period, the change is to be treated as an interactive effect for each:

(a) operating measurement period for the implementation; and

(b) reporting period for the implementation.

(3) For each interactive effect, the project proponent must choose an approach for estimating the interactive effect that:

(a) uses data from the records of the site of the implementation; and

(b) is consistent with an estimation approach that applies to the change in emissions from consumption of fuel or electricity under another methodology determination or, if there is no methodology determination that deals with that change, is consistent with one of the following approaches:

(i) an estimation approach that applies to changes of that kind under another emissions reduction scheme that has been approved by a government (including a foreign government);

(ii) a generally accepted energy efficiency measurement and verification practice that applies to changes of that kind;

(iii) a generally accepted engineering methodology, model or formula that applies to changes of that kind; and

(c) is consistent with relevant measuring and estimation requirements that apply to the consumption of fuel or electricity under the NGER (Measurement) Determination; and

(d) results in an estimate that is measurable, capable of being verified and conservative; and

(e) is credible and robust.

Note 1: An approach applying to a change in consumption for the purposes of paragraph (3)(b) may involve the calculation of emissions from consumption of energy, the direct calculation of a change in emissions, or a combination of both.

Note 2: If the change in emissions that is an interactive effect is a reduction in emissions, the value of the interactive effect will be negative.

(4) However, in estimating the interactive effect using an approach chosen in accordance with subsection (3), the project proponent must:

(a) work out emissions factors for each greenhouse gas j released due to the consumption of fuel type i using the approach that applies for working out EFi,j in section 46; and

(b) work out the energy content factor of fuel type i using the approach that applies for working out ECi in section 46; and

(c) work out emissions factors for the consumption of electricity using the approach that applies for EFElec in section 46.

22 Independent variables

(1) The project proponent must choose one or more independent variables for the purposes of developing the baseline emissions model for an implementation.

(2) The project proponent must choose one or more independent variables for the purposes of developing an operating emissions model for an implementation covered by sub‑method 2.

(3) At a minimum, the project proponent must choose the following independent variables (subject to subsection (4)):

(a) the service levels provided by equipment at the site of the implementation;

(b) the quality of inputs to equipment at the site of the implementation;

(d) the quality of outputs from equipment at the site of the implementation;

(e) the types of outputs from equipment at the site of the implementation.

Note: A variable of a kind referred to in paragraphs (a) to (e) is only an independent variable if, among other things, it is independent from any other independent variable for the model (see the definition of independent variable in section 5).

(4) Subsection (3) does not apply if:

(a) a variable would have no observable effect on the consumption of baseline relevant energy (for a baseline emissions model) or operating relevant energy (for an operating emissions model); or

(b) the project proponent has identified the variable as a site constant.

23 Site constants

(1) For each implementation, the project proponent must identify the parameters that are site constants for the purposes of working out the emissions abated by an implementation.

(2) If a parameter is a site constant for the implementation for the baseline measurement period, the parameter is to be treated as a site constant for each:

(a) operating measurement period for the implementation; and

(b) reporting period for the implementation.

(3) If a parameter is a site constant for the implementation for an operating measurement period, the parameter is to be treated as a site constant for:

(a) each reporting period relevant to the operating measurement period; and

(b) any subsequent operating measurement period for the implementation.

Division 4—Developing emissions models

24 Emissions models

(1) The project proponent must develop a baseline emissions model in the form of equation 28 for each implementation.

Note: The regression analysis used to develop the model may have to be revised from one reporting period to another, as necessary: see section 26.

(2) The project proponent must develop an operating emissions model in the form of equation 29 for each implementation covered by sub‑method 2.

Note: The regression analysis used to develop the model may have to be revised from one reporting period to another, as necessary: see section 26.

(3) The project proponent may develop a new operating emissions model for an implementation for the purposes of any subsequent reporting period.

(4) In developing the new operating emissions model the project proponent:

(a) must choose a new operating measurement period in accordance with section 19; and

(b) may choose different independent variables in accordance with section 22.

25 General requirements

(1) An emissions model for an implementation must be developed using regression analysis to relate independent variables to the dependent variable for the implementation.

(2) The values of the independent variables and dependent variable used in the regression analysis to develop the model must be values from measurement time intervals for the model in which:

(a) site constants for the implementation are at their normal values; and

(b) no values of the independent variables are outliers (as identified using standard statistical tests and approaches).

(3) The statistical tests and approaches used to identify outliers for the purpose of developing an emissions model for an implementation must be used to identify outliers for each emissions model subsequently developed for the implementation.

(4) The modelled relationship between the dependent variable and the independent variables for the model must not be disproportionately affected by a small number of high leverage data points (worked out using standard statistical tests and approaches).

(5) The statistical tests and approaches used for the purposes of subsection (4) for the purposes of developing an emissions model for an implementation must be used for the purposes of subsection (4) for each emissions model subsequently developed for the implementation.

(6) The value of the dependent variable for a measurement time interval used in the regression analysis to develop the model is the value of total measured emissions for the implementation worked out under section 46.

26 Using NGER methods to work out factors

(1) This section applies to working out the following parameters for the purposes of calculating the emissions abated by an implementation for a reporting period:

(a) the energy content factor of fuel type i;

(b) the emissions factor for greenhouse gas type j released due to the combustion of fuel type i.

Same NGER method to be used for baseline and measured or operating emissions

(2) If a project proponent works out a parameter in accordance with an NGER method, the project proponent must use the method to work out the parameter for the purposes of:

(a) the baseline emissions model for the implementation (to work out total measured emissions from the consumption of baseline relevant energy which is used in the regression analysis); and

(b) whichever of the following is applicable:

(i) for sub‑method 1—working out total measured emissions from the consumption of operating relevant energy;

(ii) for sub‑method 2—the operating emissions model for the implementation for the reporting period (to work out total measured emissions from the consumption of operating relevant energy which is used in the regression analysis).

Note 1: The project proponent may choose to use an NGER method in accordance with the monitoring requirements or be required to use one as a consequence of failing to monitor a parameter as required (see Division 3 of Part 5).

Note 2: This means that the regression analysis used in an emissions model may need to be revised if a different method is used or if the method has been amended.

Current version of NGER method to be used if possible

(3) If it is not possible to use the version of the NGER method as in force at the end of the reporting period for the purposes of paragraph (2)(a) or (b), the project proponent must use the most recent version of the NGER method that it is possible to use for the purposes of that paragraph.

(4) To avoid doubt, subsection (3) has effect despite paragraph 10(2)(b).

Emissions‑weighted average of factor to be used for emissions models

(5) If, in using a version of an NGER method for the purposes of an emissions model in accordance with this section, more than one factor would apply in the baseline measurement period or an operating measurement period, the factor to be used for the period is the emissions‑weighted average of all the factors that would have applied during the period.

27 Minimum statistical requirements

An emissions model for an implementation must, at a minimum, meet the following statistical requirements:

(a) each independent variable coefficient must have a t‑statistic that is greater than the value for the 2‑tailed t‑distribution at the 95% confidence level for the number of degrees of freedom in the regression (equivalent to 97.5% confidence in a 1‑tailed distribution);

(b) the adjusted coefficient of determination (adjusted R2) must be greater than 0.75;

(c) variation in each independent variable must affect the dependent variable in a way that can be explained by reference to an effect on the consumption of:

(i) for the baseline emissions model—baseline relevant energy; or

(ii) for an operating emissions model for the implementation—operating relevant energy for the model;

(d) the residuals of the emissions model must be (confirmed using standard statistical tests and approaches):

(i) homoscedastic; and

(ii) normally distributed; and

(iii) free of auto‑correlation;

(e) the relative precision of the emissions level predicted by the emissions model for the baseline measurement period or the operating measurement period for the model (as the case may be) calculated at the 95% confidence level must be within 100%.

Note: The number of degrees of freedom means the number of data points (measurement time intervals) in the regression minus the number of independent variables in the regression minus 1.

Part 4—Net abatement amount

Division 1—Preliminary

28 Operation of this Part

For paragraph 106(1)(c) of the Act, this Part specifies the method for working out the carbon dioxide equivalent net abatement amount for a reporting period for an industrial electricity and fuel efficiency project that is an eligible offsets project.

29 Overview of gases accounted for in abatement calculations

The following table provides an overview of the greenhouse gases and emissions sources that are relevant to working out the carbon dioxide equivalent net abatement amount for an industrial electricity and fuel efficiency project.

Greenhouse gases and emissions sources
Item	Relevant emissions calculation	Emissions source	Greenhouse gas
1	Baseline emissions for an implementation	Fuel consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)
2	Baseline emissions for an implementation	Electricity consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)
3	Operating emissions or measured emissions for an implementation	Fuel consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)
4	Operating emissions or measured emissions for an implementation	Electricity consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)
5	Emissions from interactive effects	Fuel consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)
6	Emissions from interactive effects	Electricity consumption emissions	Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O)

30 When an implementation may be included in calculating the net abatement amount

(1) For the purposes of working out the carbon dioxide equivalent net abatement amount for a reporting period, the project proponent may calculate abatement for an implementation for the reporting period if the implementation has been completed.

(2) However, if:

(a) the project proponent calculates abatement for an implementation for a reporting period; and

(b) the project proponent chooses not to calculate abatement for the implementation in a subsequent reporting period (the later period); and

(c) it would have been practicable for the project proponent to calculate abatement for the implementation in the later period;

the project proponent must not calculate abatement for the implementation for any reporting period subsequent to the later period.

31 When an implementation must not be included in calculating the net abatement amount

For the purposes of working out the carbon dioxide equivalent net abatement amount for a reporting period, the project proponent must not calculate abatement for an implementation for the reporting period if:

(a) the project proponent has undertaken an activity at the site of an implementation (whether the activity is of a kind referred to in subsection 11(2) or otherwise); and

(b) the activity was not described under paragraph 13(1)(a) or (b) as part of any implementation, or likely implementation, in the application under section 22 of the Act in relation to the project; and

(c) the activity could reasonably be expected to have an effect, that is not minor or trivial, on the emissions abated by the implementation that would be calculated for the implementation for the reporting period.

32 Certain consumption that may be excluded in calculating the emissions abated by an implementation

For the purposes of working out the emissions abated by an implementation for a reporting period, the project proponent may choose not to account for one or more changes in fuel or electricity consumption that occur as a result of the implementation being undertaken if:

(a) it is impractical or disproportionally costly to account for those changes in fuel or electricity consumption (including accounting for those changes as interactive effects); and

(b) not accounting for the total of those changes in fuel or electricity consumption would be reasonably likely to result in a difference of 5% or less in the emissions abated by the implementation for the reporting period; and

33 Negative final carbon dioxide equivalent net abatement amount taken to be zero

If the carbon dioxide equivalent net abatement amount for the final reporting period in the crediting period is a negative amount the carbon dioxide equivalent net abatement amount for the reporting period is taken to be zero.

Division 2—Method for calculating net abatement amount

34 Carbon dioxide equivalent net abatement amount

The carbon dioxide equivalent net abatement amount for a reporting period, in tonnes CO2‑e, is worked out using the formula (equation 1):

where:

AN means the carbon dioxide equivalent net abatement amount for the reporting period, in tonnes CO2‑e.

Ah means the emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, worked out using sub‑method 1 or 2.

ANeg means the value of AN for the previous reporting period if AN was negative in the previous reporting period.

Division 3—Implementation using measured emissions—sub‑method 1

35 Summary

Sub‑method 1 works out the emissions abated by an implementation for a reporting period by comparing modelled baseline emissions with measured operating emissions in the reporting period.

If there has been a decrease in emissions (i.e. the difference between baseline emissions and operating emissions is positive), the emissions abated by the implementation is worked out by comparing modelled baseline emissions (taking into account an improvement factor) with measured operating emissions, taking into account an accuracy factor.

However, if there has been a decrease in emissions and emissions from interactive effects are greater than the interactive effects threshold, the emissions abated by the implementation is taken to be zero.

If there has been an increase in emissions (i.e. the difference between baseline emissions and operating emissions is negative), the emissions abated by the implementation is the negative amount (worked out by comparing modelled baseline emissions with measured operating emissions) plus any emissions from interactive effects.

However, if there has been an increase in emissions and emissions from interactive effects are greater than the interactive effects threshold, the emissions abated is worked out without accounting for any emissions from interactive effects.

36 Emissions abated

(1) The emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (2) or (3), as required.

Positive abatement

(2) If the following formula (equation 2) is satisfied, then the emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (4) or (5), as required.

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Negative abatement

(3) If the following formula (equation 3) is satisfied, then the emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (6) or (7), as required.

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Positive abatement with interactive effects below interactive effects threshold

(4) If the following formula (equation 4) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 5):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

AF means the accuracy factor for implementation h for the reporting period worked out in accordance with section 49.

Positive abatement with interactive effects above interactive effects threshold

(5) If the following formula (equation 6) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 7):

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

Negative abatement with interactive effects below interactive effects threshold

(6) If the following formula (equation 8) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 9):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

|EBM,h ‑ EMeas,h| means the absolute value of the difference between:

(a) the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12; and

(b) the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

Negative abatement with interactive effects above interactive effects threshold

(7) If the following formula (equation 10) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 11):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

|EBM,h ‑ EMeas,h| means the absolute value of the difference between:

(a) the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12; and

(b) the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

37 Modelled baseline emissions

The total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 12):

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e.

EBM,h,m means the total baseline emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, worked out under section 44.

IFy means the improvement factor for the year of the crediting period for the implementation in which eligible measurement time interval m ends worked out in accordance with section 50.

38 Measured emissions

The total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 13):

where:

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e.

EMeas,h,m means the total measured emissions from the consumption of operating relevant energy for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, worked out under section 46.

Division 4—Implementation using operating emissions model—sub‑method 2

39 Summary

Sub‑method 2 works out the emissions abated by an implementation for a reporting period by comparing modelled baseline emissions with modelled operating emissions.

If there has been a decrease in emissions (i.e. the difference between baseline emissions and operating emissions is positive), the emissions abated by the implementation is worked out by comparing modelled baseline emissions (taking into account an improvement factor) with modelled operating emissions, taking into account an accuracy factor and a decay factor.

If there has been an increase in emissions (i.e. the difference between baseline emissions and operating emissions is negative), the emissions abated by the implementation is the negative amount (worked out by comparing modelled baseline emissions with modelled operating emissions) plus any emissions from interactive effects.

40 Emissions abated

(1) The emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (2) or (3), as required.

Positive abatement

(2) If the following formula (equation 14) is satisfied, then the emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (4) or (5), as required.

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Negative abatement

(3) If the following formula (equation 15) is satisfied, then the emissions abated by implementation h included in the project for the reporting period, in tonnes CO2‑e, is worked out using subsection (6) or (7), as required.

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Positive abatement with interactive effects below interactive effects threshold

(4) If the following formula (equation 16) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 17):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

AF means the accuracy factor for implementation h for the reporting period worked out in accordance with section 49.

DF means the decay factor for the reporting period worked out in accordance with section 51.

Positive abatement with interactive effects above interactive effects threshold

(5) If the following formula (equation 18) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 19):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

Negative abatement with interactive effects below interactive effects threshold

(6) If the following formula (equation 20) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 21):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

|EBM,h ‑ EOM,h| means the absolute value of the difference between:

(a) the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24; and

(b) the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

Negative abatement with interactive effects above interactive effects threshold

(7) If the following formula (equation 22) is satisfied:

then the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 23):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 26.

|EBM,h ‑ EOM,h| means the absolute value of the difference between:

(a) the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24; and

(b) the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

Ah means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

41 Modelled baseline emissions

The total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 24):

where:

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e.

EBM,h,m means the total baseline emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, worked out under section 44.

IFy means the improvement factor for the year of the crediting period for the implementation in which eligible measurement time interval m ends worked out in accordance with section 50.

42 Modelled operating emissions

The total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 25):

where:

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e.

EOM,h,m means the total operating emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, worked out under section 45.

Division 5—Interactive effects

43 Interactive effects

(1) The sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 26):

where:

EIA,h means the sum of the absolute values of the interactive effects for implementation h for the reporting period, in tonnes CO2‑e.

|EI,h,u| means the absolute value of interactive effect u for implementation h for the reporting period, in tonnes CO2‑e, worked out in accordance with subsection 21(3).

(2) The net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 27):

where:

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e.

EI,h,u means interactive effect u for implementation h for the reporting period, in tonnes CO2‑e, worked out in accordance with subsection 21(3).

Note: If the change in emissions that is an interactive effect is a reduction in emissions, the value of the interactive effect will be negative.

Division 6—Emissions models

44 Baseline emissions model

The total baseline emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, is worked out by entering the values of the independent variables (x1,b, x2,b,…,xk,b) measured in the eligible measurement time interval into the baseline emissions model for the implementation (equation 28):

where:

EBM,h,m means the total baseline emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e.

Note: EBM,h,m is the dependent variable for the emissions model.

x1,b means the measured value of the independent variable x1 for eligible measurement time interval m.

k means the number of independent variables in the baseline emissions model.

∝b means the constant coefficient from the baseline emissions model.

β1,b means the regression coefficient for independent variable x1 from the baseline emissions model.

εb means the regression residual from the baseline emissions model.

45 Operating emissions model

The total operating emissions for implementation h for eligible measurement time interval m in the reporting period, in tonnes CO2‑e, is worked out by entering the values of the independent variables (x1,p, x2,p,…,xk,p ) measured in the eligible measurement time interval into the operating emissions model for the implementation for the reporting period (equation 29):

where:

EOM,h,m means the total operating emissions for implementation h for eligible measurement time interval m, in tonnes CO2‑e.

Note: EOM.h,m is the dependent variable for the emissions model.

x1,p means the measured value of the independent variable x1 in eligible measurement time interval m.

k means the number of independent variables in the operating emissions model.

∝p means the constant coefficient from the operating emissions model.

β1,p means the regression coefficient for independent variable x1 from the operating emissions model.

εp means the regression residual from the operating emissions model.

Division 7—Measured emissions

46 Measured emissions

(1) This section sets out how to work out the total measured emissions from the consumption of the following:

(a) if this section is used to develop the baseline emissions model for implementation h—baseline relevant energy for implementation h for measurement time interval m;

(b) if this section is used to develop an operating emissions model for implementation h—operating relevant energy for implementation h for measurement time interval m;

(c) if this section is used otherwise—operating relevant energy for implementation h for eligible measurement time interval m.

(2) The total measured emissions from the consumption of the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, is worked out using the formula (equation 30):

where:

EMeas,h,m means the total measured emissions from the consumption of the relevant energy for implementation h for the time interval m, in tonnes CO2‑e.

EFuel,h,m means the total emissions from the combustion of fuel that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, worked out using equation 31.

EElec,h,m means the total emissions from the consumption of electricity that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, worked out using equation 33.

(3) The total emissions from the combustion of fuel that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, is worked out using the formula (equation 31):

where:

EFuel,h,m means the total emissions from the combustion of fuel that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e.

Eh,m,i,j means the total emissions from the combustion of fuel type i of greenhouse gas j that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, worked out using equation 32.

(4) The total emissions from the combustion of fuel type i of greenhouse gas j that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, is worked out using the formula (equation 32):

where:

Eh,m,i,j means the total emissions from the combustion of fuel type i of greenhouse gas j that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e.

Qh,m,i means the total quantity of fuel type i combusted that is the relevant energy for implementation h for the time interval m, in appropriate units, worked out in accordance with the monitoring requirements.

ECi means the energy content factor of fuel type i, in appropriate units, worked out in accordance with the monitoring requirements.

EFi,j means the emissions factor for each greenhouse gas type j released due to the combustion of fuel type i that is the relevant energy for implementation h for the time interval m, in kilograms of CO2‑e per gigajoule or other appropriate unit, worked out in accordance with the monitoring requirements.

(5) However, if Qh,m,i is measured in gigajoules, then the value of ECi is taken to be 1.

(6) The total emissions from the consumption of electricity that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e, is worked out using the formula (equation 33):

where:

EElec,h,m means the total emissions from the consumption of electricity that is the relevant energy for implementation h for the time interval m, in tonnes CO2‑e.

QElec,h,m means the quantity of electricity that is the relevant energy for implementation h for the time interval m, in kilowatt hours, worked out in accordance with the monitoring requirements.

QRen,h,m means the quantity of eligible renewable electricity that is the relevant energy for implementation h for the time interval m, in kilowatt hours, worked out in accordance with the monitoring requirements.

EFElec means:

(a) for electricity obtained from an electricity grid that is a grid in relation to which the NGA Factors document, in force on the day the project is declared to be an eligible offsets project, includes an emissions factor—that factor, in kilograms CO2‑e per kilowatt hour; or

(b) for electricity obtained from an electricity grid not covered by paragraph (a) or obtained from a source other than an electricity grid:

(i) if the supplier of the electricity is able to provide an emissions factor that reflects the emissions intensity of the electricity (worked out in accordance with subsection (7)) and is applicable on the day the project is declared to be an eligible offsets project—that factor, in kilograms CO2‑e per kilowatt hour (or its equivalent of tonnes CO2‑e per megawatt hours); or

(ii) otherwise—the emissions factor, in kilograms CO2‑e per kilowatt hour (or its equivalent of tonnes CO2‑e per megawatt hours), for off‑grid electricity included in the NGA Factors document in force on the day the project is declared to be an eligible offsets project.

(7) For subparagraph (b)(i) of the definition of EFElec in subsection (6), the emissions factor must be worked out:

(a) on a sent‑out basis; and

(b) using a measurement or estimation approach that is consistent with the NGER (Measurement) Determination.

Division 8—General equations

47 Relative precision—emissions model

(1) This section sets out how to work out the relative precision of the emissions level predicted by:

(a) the baseline emissions model for implementation h for the baseline measurement period; and

(b) an operating emissions model for implementation h for the operating measurement period for the model.

(2) The relative precision of the emissions level predicted by the emissions model for implementation h for the period is worked out using the formula (equation 34):

where:

RPE,h means the relative precision of the emissions level predicted by:

(a) the baseline emissions model for implementation h for the baseline measurement period; or

(b) the operating emissions model for implementation h for the operating measurement period for the model.

t means the critical tabulated student’s t value for the appropriate number of degrees of freedom at the 95% confidence level.

Note: The number of degrees of freedom means the number of data points (measurement time intervals) in the regression minus the number of independent variables in the regression minus 1.

nMI,Mod,h means the number of data points, which is:

(a) for the baseline emissions model—the number of measurement time intervals for which data was used in the regression analysis to develop the model in the baseline measurement period; or

(b) for the operating emissions model for the reporting period—the number of measurement time intervals for which data was used in the regression analysis to develop the model in the operating measurement period for the model.

SEE,h means the standard error of:

(a) the baseline emissions model for implementation h per measurement time interval in the baseline measurement period; or

(b) the operating emissions model for implementation h per measurement time interval in the operating measurement period for the model.

Eh means the emissions level for implementation h:

(a) for the baseline measurement period worked out using the baseline emissions model for implementation h; or

(b) for the operating measurement period worked out using the operating emissions model for implementation h for that period.

48 Relative precision—implementation

(1) The relative precision of the emissions abated by implementation h for the reporting period is worked out using the formula (equation 35):

where:

RPA,h means the relative precision of the emissions abated by implementation h for the reporting period.

t means the critical tabulated student’s t value for the appropriate number of degrees of freedom at the 95% confidence level.

Note: The number of degrees of freedom means the number of data points (measurement time intervals) in the regression minus the number of independent variables in the regression minus 1.

SEA,h means the standard error of the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, worked out:

(a) for sub‑method 1—using equation 36; and

(b) for sub‑method 2—using equation 37.

|ARP,h| means the absolute value of the emissions abated by implementation h for the reporting period worked out:

(a) for sub‑method 1—using equation 38; and

(b) for sub‑method 2—using equation 39.

Standard error for sub‑method 1

(2) The standard error of the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 36):

where:

SEA,h means the standard error of the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

nMI,Rep,h means the number of eligible measurement time intervals in the reporting period.

SEB,h means the standard error of the baseline emissions model for implementation h per measurement time interval, in tonnes CO2‑e.

SEinstr,h means the standard error of the measurement uncertainty of the emissions attributable to the accuracy class of the instruments used to measure the values of parameters for implementation h for the reporting period, in tonnes CO2‑e, worked out using standard approaches for assessing the impacts of instrument accuracies on the standard error of emissions calculated (subject to subsection (3)).

(3) For subsection (2), the value of SEinstr,h:

(a) must be worked out in relation to instruments used for the purposes of:

(i) developing the baseline emissions model; and

(ii) working out total modelled baseline emissions for the reporting period; and

(iii) working out total measured emissions for the reporting period; and

(b) if the project proponent chooses—may be taken to be zero if the same instruments and the same instrument configurations are used to measure the values of parameters in both the baseline measurement period and the reporting period.

Standard error for sub‑method 2

(4) The standard error of the emissions abated by implementation h for the reporting period, in tonnes CO2‑e, is worked out using the formula (equation 37):

where:

SEA,h means the standard error of the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

nMI,Rep,h means the number of eligible measurement time intervals in the reporting period.

SEB,h means the standard error of the baseline emissions model for implementation h per measurement time interval, in tonnes CO2‑e.

SEO,h means the standard error of the operating emissions model for implementation h for the reporting period per measurement time interval, in tonnes CO2‑e.

SEinstr,h means the standard error of the measurement uncertainty of the emissions attributable to the accuracy class of the instruments used to measure the values of the parameters for implementation h for the reporting period, in tonnes CO2‑e, worked out using standard approaches for assessing the impacts of instrument accuracies on the standard error in emissions calculated (subject to subsection (5)).

(5) For subsection (4), the value of SEinstr,h:

(a) must be worked out in relation to instruments used for the purposes of:

(i) developing the baseline emissions model; and

(ii) working out total modelled baseline emissions for the reporting period; and

(iii) developing the operating emissions model for the reporting period; and

(iv) working out total modelled operating emissions for the reporting period; and

(b) if the project proponent chooses—may be taken to be zero if the same instruments and the same instrument configurations are used to measure the values of parameters for all of the following:

(i) the baseline measurement period;

(ii) the operating measurement period for the reporting period;

(iii) the reporting period.

Emissions abated—sub‑method 1

(6) The emissions abated by implementation h for the reporting period is worked out using the formula (equation 38):

where:

ARP,h means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 12.

EMeas,h means the total measured emissions from the consumption of operating relevant energy for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 13.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

Emissions abated—sub‑method 2

(7) The emissions abated by implementation h for the reporting period is worked out using the formula (equation 39):

where:

ARP,h means the emissions abated by implementation h for the reporting period, in tonnes CO2‑e.

EBM,h means the total modelled baseline emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 24.

EOM,h means the total modelled operating emissions for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 25.

EIN,h means the net interactive effects for implementation h for the reporting period, in tonnes CO2‑e, worked out using equation 27.

49 Accuracy factor

(1) The accuracy factor for implementation h for a reporting period is worked out using the following table.

Accuracy factors
Item	Relative precision of the emissions abated by implementation h for the reporting period at 95% confidence level	Accuracy factor
1	less than 25%	1.0
2	25% to 49%	0.9
3	50% to 74%	0.8
4	75% to 99%	0.6
5	100% to 149%	0.4
6	150% to 200%	0.2
7	greater than 200%	0

(2) For subsection (1), the relative precision of the emissions abated by implementation h for the reporting period at 95% confidence level should be rounded to the nearest whole percentage (rounding up if the first decimal place is 5 or more).

50 Improvement factor

The improvement factor for a year of the crediting period for the implementation is worked out using the following table.

Improvement factors
Item	Crediting period year	Improvement factor
1	1	1.000
2	2	0.997
3	3	0.994
4	4	0.991
5	5	0.988
6	6	0.985
7	7	0.982

Note: The improvement factor applies a yearly decay rate of 0.3% to modelled baseline emissions to account for business‑as‑usual improvements in energy efficiency over time.

51 Decay factor

(1) The project proponent may work out the decay factor for a reporting period using one of the following (subject to subsections (2) and (3)):

(a) the persistence model tool;

(b) subsection (4).

(2) If the project proponent uses an option in subsection (1) to work out the decay factor in the first reporting period and then uses the alternative option in a subsequent reporting period (the later period), the project proponent must use the alternative option for all reporting periods subsequent to the later period.

(3) However, if the alternative option is using the persistence model tool, the project proponent may use subsection (4) in a reporting period subsequent to the later period if it is not possible to use the persistence model tool for that period.

(4) The decay factor for a reporting period is worked out using the formula (equation 40):

where:

DF means the decay factor for a reporting period.

DCy means the decay coefficient for decay coefficient year y.

nMI,h,y means the number of eligible measurement time intervals for implementation h that occur in decay coefficient year y.

nMI,h means the total number of eligible measurement time intervals in the reporting period.

(5) The decay coefficient for a year of operation of an operating emissions model (decay coefficient year) is worked out using the following table (where year 1 begins on the start date of the operating measurement period for the operating emissions model).

Decay coefficients
Item	Decay coefficient year	Decay coefficient
1	1	1.000
2	2	0.875
3	3	0.750
4	4	0.625
5	5	0.500
6	6	0.375
7	7	0.250

Part 5—Reporting, record‑keeping and monitoring requirements

Division 1—Offsets report requirements

52 Operation of this Division

For paragraph 106(3)(a) of the Act, this Division sets out information that must be included in an offsets project report about an industrial electricity and fuel efficiency project that is an eligible offsets project.

53 General requirements

(1) The information referred to in subsection (2) is to be included in an offsets report for the project if the information is:

(a) different from what has previously been provided to the Regulator (whether in the application under section 22 of the Act or a previous offsets report or otherwise); or

(b) the information has not been previously provided to the Regulator, (whether in the application under section 22 of the Act or a previous offsets report or otherwise).

(2) The information for the purposes of subsection (1) is the following:

(a) for each implementation that was completed during the reporting period—details of the completion of the implementation;

(b) the interactive effects for each implementation for the reporting period;

(c) fuel and electricity consumption excluded under section 32, including evidence as to how the exclusion met the requirements of that section.

54 Determination of certain factors and parameters

(1) If, in the circumstances described in paragraph 10(2)(b), a factor or parameter is defined or calculated for a reporting period by reference to an instrument or writing as in force from time to time, the offsets report about the project for the reporting period must include the following information for the factor or parameter:

(a) the versions of the instrument or writing used;

(b) the start and end dates of each use;

(c) the reasons why it was not possible to define or calculate the factor or parameter by reference to the instrument or writing as in force at the end of the reporting period.

(2) If, in the circumstances described in subsection 26(3), a parameter is not worked out for a reporting period using the version of a NGER method as in force at the end of the reporting period, the offsets report about the project for the reporting period must include the following information for the parameter:

(a) the versions of the NGER method used;

(b) the start and end dates of each use;

(c) the reasons why it was not possible to use the version of the NGER method as in force at the end of the reporting period.

(3) If a parameter is determined under section 64 for the purpose of working out the carbon dioxide equivalent net abatement amount for the project for a reporting period, the offsets report about the project for the reporting period must include the following information for the parameter:

(a) the name of the parameter;

(b) the start and end dates of the non‑monitored period for which the parameter was determined;

(d) the reasons why the project proponent failed to monitor the parameter as required by the monitoring requirements.

55 Division of project into smaller projects

For subsection 77A(2) of the Act, the smallest part into which an industrial electricity and fuel efficiency project may be divided for the purposes of giving the Regulator an offsets report in relation to the part is a part made up of a single implementation.

Division 2—Record‑keeping requirements

56 Operation of this Division

For paragraph 106(3)(c) of the Act, this Division sets out record‑keeping requirements for an industrial electricity and fuel efficiency project that is an eligible offsets project.

57 Record‑keeping requirements

(1) The project proponent must keep records about the following for each implementation:

(a) technical specifications of implementation equipment that was modified or installed as part of the implementation;

(b) the completion of the activities that constitute the implementation.

(2) As well as keeping any other relevant records, the project proponent must keep records in the form of a schematic or diagram of the site of each implementation that identifies the location of:

(a) all the implementation equipment, interactive equipment and co‑metered equipment for the implementation and any other equipment relevant to the implementation; and

(b) equipment that measures the consumption of that equipment; and

(3) If, as part of an implementation, existing energy‑consuming implementation equipment is re‑used or is disposed of, the project proponent must keep records about:

(a) how the equipment was re‑used or disposed; and

(b) the person (if any) to whom the equipment was provided.

Division 3—Monitoring requirements

58 Operation of this Division

For paragraph 106(3)(d) of the Act, this Division sets out requirements to monitor an industrial electricity and fuel efficiency project that is an eligible offsets project.

59 Monitoring requirements—general

(1) Baseline relevant energy for an implementation must be monitored separately to other energy use at the site of the implementation during the baseline measurement period.

(2) Operating relevant energy for an implementation must be monitored separately to other energy use at the site of the implementation during:

(a) for sub‑method 1—the reporting period; or

(b) for sub‑method 2—the operating measurement period for each operating emissions model.

(3) The equipment that monitors baseline or operating relevant energy must also be monitored during the relevant period, including monitoring of:

(a) verification of data; and

(b) evidence of bias or drift; and

60 Monitoring requirements—sub‑method 1

(1) This section applies if the emissions abated by an implementation is worked out under sub‑method 1 for a reporting period.

(2) The following must have been measured or monitored during the baseline measurement period:

(a) the consumption of baseline relevant energy for the implementation;

(b) independent variables for the baseline emissions model for the implementation;

(d) interactive effects for the implementation.

(3) The following must be measured or monitored during the reporting period:

(a) the consumption of operating relevant energy for the implementation;

(b) independent variables for the baseline emissions model for the implementation;

(d) interactive effects for the implementation.

61 Monitoring requirements—sub‑method 2

(1) This section applies if the emissions abated by an implementation is worked out under sub‑method 2 for a reporting period.

(2) The following must have been measured or monitored during the baseline measurement period:

(a) the consumption of baseline relevant energy for the implementation;

(b) independent variables for the baseline emissions model for the implementation;

(d) interactive effects for the implementation.

(3) The following must be measured or monitored during the operating measurement period for each operating emissions model for the implementation:

(a) the consumption of operating relevant energy;

(b) independent variables for the model;

(d) interactive effects for the implementation.

(4) The following must be measured or monitored during the reporting period:

(a) independent variables for the baseline emissions model for the implementation;

(b) independent variables for the operating emissions model for the implementation for the reporting period;

(d) interactive effects for the implementation.

62 Requirement to monitor certain parameters

(1) The project proponent for an industrial electricity and fuel efficiency project must monitor a parameter set out in an item in the following table in accordance with the instructions in the item.

Monitored parameters
Item	Parameter	Description	Unit	Measurement procedure (including frequency as required)	Determination of parameter from measurements
1	QElec,h,m	The quantity of electricity that is the relevant energy for implementation h for time interval m	kWh If QElec,h,m is measured in gigajoules, the quantity of kilowatt hours must be calculated by dividing the amount of gigajoules by the conversion factor of 0.0036	Measured using (subject to subsection (2)): (a) a commercial grade meter; or (b) relevant purchase records; or (c) if it is not practicable to use a method referred to in paragraph (a) or (b)—in accordance with industry practice. Frequency—throughout each measurement time interval, at a frequency such that variance within the measurement interval is less than variance between intervals.	Where multiple measurements of a variable are taken in a measurement time interval, the variable is worked out by multiplying the average value of those measurements during the time interval by the period of the time interval
2	QRen,h,m	The quantity of eligible renewable electricity that is the relevant energy for implementation h for the time interval m	kWh	Measured using (subject to subsection (2)): (a) a commercial grade meter; or (b) relevant generation records, such as records from an energy retailer or network operator; or (c) an inverter that incorporates an electricity meter: (i) satisfies the requirements of Australian Standard AS 4777 as in force from time to time; or (ii) is on the list of approved inverters, maintained by the Clean Energy Council, as it exists from time to time. (The list of approved inverters could in 2014 be viewed on the Clean Energy Council’s website (http://www.solaraccreditation.com.au)). Frequency—continuously.	Where multiple measurements of a variable are taken in a measurement time interval, the variable is worked out by multiplying the average value of those measurements during the time interval by the period of the time interval
3	Qh,m,i	The total quantity of fuel type i combusted that is the relevant energy for implementation h for the time interval m	Appropriate units	Measured using (subject to subsection (2)): (a) a commercial grade meter; or (b) relevant purchase records; or (c) if it is not practicable to use a method referred to in paragraph (a) or (b)—in accordance with industry practice. Frequency—throughout each measurement time interval, at a frequency: (d) such that variance within the measurement interval is less than variance between intervals; and (e) that meets or exceeds the requirements in Schedule 2 to the NGER (Measurement) Determination.	Where multiple measurements of a variable are taken in a measurement time interval, the variable is worked out by multiplying the average value of those measurements during the time interval by the period of the time interval
4	ECi, where i is liquid fuel	The energy content factor of fuel type i	Appropriate units	Worked out in accordance with: (a) Schedule 1 to the NGER (Measurement) Determination; or (b) section 2.4.3.2 of the NGER (Measurement) Determination; or (c) section 2.4.4 of the NGER (Measurement) Determination. However, the same option must be used for all reporting periods.
5	ECi, where i is gaseous fuel	The energy content factor of fuel type i	Appropriate units	Worked out in accordance with: (a) Schedule 1 to the NGER (Measurement) Determination; or (b) section 2.3.3.2 of the NGER (Measurement) Determination; or (c) section 2.3.4 of the NGER (Measurement) Determination. However, the same option must be used for all reporting periods.
6	ECi, where i is solid fuel	The energy content factor of fuel type i	Appropriate units	Worked out in accordance with: (a) Schedule 1 to the NGER (Measurement) Determination; or (b) Schedule 2 and Subdivision 2.2.3.3 of the NGER (Measurement) Determination. However, the same option must be used for all reporting periods.
7	EFi,j	The emissions factor for each greenhouse gas type j released due to the combustion of fuel type i that is the relevant energy for implementation h for the time interval	kg CO2‑e/GJ or appropriate unit	Worked out in accordance with the NGER method for the greenhouse gas and fuel type. However, the same option must be used for all reporting periods.
8	Independent variables	See section 22	Appropriate units	Measured using measuring equipment in accordance with industry practice (see also subsection (4)). Frequency—throughout each measurement time interval, at a frequency such that variance within the measurement interval is less than variance between intervals.	Where multiple measurements of a variable are taken in a measurement time interval, the variable is worked out by multiplying the average value of those measurements during the time interval by the period of the time interval
9	Site constants	See section 23	Appropriate units	Measured using measuring equipment in accordance with industry practice (see also subsection (4)). Frequency—as appropriate.	As appropriate

(2) QElec,h,m, QRen,h,m and Qh,m,i must be measured using an approach that is consistent with:

(a) relevant measuring and estimation requirements that apply to the parameter under the NGER (Measurement) Determination; or

(b) the National Measurement Act 1960; or

(c) if it is not practicable to use an approach consistent with paragraph (a) or (b)—relevant Australian, international or industry standards.

(3) If, under subsection (1), a parameter is measured in a period using measuring equipment in accordance with industry practice, the same practice (as applicable at the time of measurement) must be used in any future period that the parameter is measured in accordance with industry practice.

(4) The project proponent may measure independent variables and site constants:

(a) directly; or

(b) by using a proxy method that enables the value of the parameter to be reliably calculated.

Note: An example of a proxy method is measuring the temperature and pressure of steam flow to calculate energy flow.

(5) If, under subsection (4), a proxy method is used to calculate the value of a parameter in a period, the same method must be used in any future period that the parameter is not measured directly.

63 Monitoring equipment

(1) Equipment used for monitoring under section 62 must be:

(a) calibrated by an accredited technician in accordance with the manufacturer’s specifications for the equipment; and

(b) installed and operated in accordance with the manufacturer’s specifications for the equipment.

(2) If, during a measurement time interval, the equipment requires re‑calibration, or does not operate normally, for the purposes of working out the carbon dioxide equivalent net abatement amount for the project for a reporting period, the project proponent must:

(a) for a measurement time interval in the baseline measurement period or an operating measurement period for the implementation—exclude the values of all parameters from the time interval from the regression analysis used for any relevant emissions model; or

(b) for a measurement time interval in a reporting period—either:

(i) not treat the measurement time interval as an eligible measurement time interval; or

(ii) determine the value of the parameter under section 64.

Note 1: For example, the equipment would not be operating normally if it is:

(a) operating inconsistently with the manufacturer’s specifications for the equipment; or

(b) giving measurements that do not reflect the actual value of the parameter monitored.

Note 2: By not treating the measurement time interval as an eligible measurement time interval the values of all parameters from the time interval will be excluded from the calculation of total measured emissions under sub‑method 1.

64 Consequences of not meeting requirement to monitor certain parameters

(1) If, during a particular period (the non‑monitored period) in a reporting period, a project proponent for an industrial electricity and fuel efficiency project fails to monitor a parameter as required by the monitoring requirements, the value of the parameter for the purpose of working out the carbon dioxide net equivalent for the reporting period is to be determined for the non‑monitored period in accordance with the following table.

Consequences of not meeting requirement to monitor certain parameters
Item	Parameter	Determination of parameter for non‑monitored period
1	Each of the following: (a) QElec,h,m; (b) QRen,h,m; (c) Qh,m,i; (d) independent variables; (e) site constants	The project proponent must make a conservative estimate of the parameter having regard to: (a) any relevant measurement or estimation approaches or requirements that apply to the parameter under the NGER (Measurement) Determination; and (b) any relevant historical data for the project; and (c) any other data for the project that relates to the parameter; and (d) any other matter the project proponent considers relevant
2	Either of the following: (a) EFi,j, if worked out otherwise than by using a method specified in Schedule 1 to the NGER (Measurement) Determination (apart from during the non‑monitored period); (b) ECi, if worked out otherwise than by using a method specified in Schedule 1 to the NGER (Measurement) Determination (apart from during the non‑monitored period)	The project proponent must use the estimate of the parameter where: (a) if the failure relates to baseline relevant energy—the factor for fuel type i and greenhouse gas j in Schedule 1 to the NGER (Measurement) Determination; and (b) if the failure relates to operating relevant energy— (i) for any cumulative period of up to 3 months in any 12 months of a crediting period for the project—the factor for fuel type i and greenhouse gas j in Schedule 1 to the NGER (Measurement) Determination multiplied by 1.1; and (ii) for any cumulative period of up to 3 months in excess of that 3 months—the factor for fuel type i and greenhouse gas j in Schedule 1 to the NGER (Measurement) Determination multiplied by 1.5

(2) To avoid doubt, this section does not prevent the Regulator from taking action under the Act, or regulations or rules made under the Act, in relation to the project proponent’s failure to monitor a parameter as required by the monitoring requirements.

Note: Examples of action that may be taken include the following:

(a) if the failure constitutes a breach of a civil penalty provision in section 194 of the Act (which deals with project monitoring requirements), the Regulator may apply for a civil penalty order in respect of the breach;

(b) if false or misleading information was given to the Regulator in relation to the failure, the Regulator may revoke the project’s section 27 declaration under regulations or rules made for the purposes of section 38 of the Act;

(c) if the giving of false or misleading information in relation to the failure led to the issue of Australian carbon credit units, the Regulator may require all or some of those units to be relinquished under section 88 of the Act.