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What are your permanence obligations under the ACCU Scheme?
Under the ACCU Scheme, permanence obligations require that the carbon stored by a project is maintained for a specified period, either 25 or 100 years. This ensures the long-term environmental benefits of the project. If carbon is released back into the atmosphere due to events like fire, it can reverse the benefits, and the project must address this through a permanence plan.
To mitigate the risk of such reversals, the scheme applies a risk of reversal buffer. This buffer reduces the number of ACCUs issued by 5% during each reporting period. Additionally, for projects with a 25-year permanence period, a 20% permanence discount is applied.
These measures help protect the integrity of the ACCU Scheme by ensuring that carbon sequestration efforts are sustained over the long term and that potential losses are accounted for.
| Sequestration permanence | Risk of reversal buffer | Permanence discount | Total credits received by a project |
|---|---|---|---|
| 25 years | 5% | 20% | 75% |
| 100 years | 5% | 0% | 95% |
DISCLAIMER: This general information has been prepared by Landcare Australia (AR 1315198 of Australian Carbon Traders Pty Ltd AFSL 425512) for farmers and landholders who are eligible to be treated as wholesale clients. It does not take into account your objectives, needs or situation. ACCUs and derivatives are financial products. While we have outlined common benefits, risks and constraints here, we strongly recommend you seek independent financial and legal advice before acting on any decision to invest. Click here for further regulatory information.