Carbon Farming on Pastoral Lease Lands - Human Induced Regeneration

Carbon farming offers a potential new revenue stream for pastoralists and Aboriginal groups, enables rehabilitation of degraded landscapes, and contributes to Western Australia's ongoing prosperity and economic diversification.

UPDATE: Human Induced Regeneration (HIR) method will close on 30 September 2023.

Joint CER/DCCEEW response to ANU papers on Human Induced Regeneration [1]

Implications of the Human-induced regeneration method closure

The Clean Energy Regulator (CER) will sunset the HIR method on 30 September 2023. Link here [2].

The CER has provided guidance for participants [3] impacted including anyone:

considering registering a new project
in the process of registering a new project
undertaking a project that has already been registered
considering transferring their project to a new or updated method e.g. integrated farm and land management.

It is recommended that pastoralists in Western Australia with HIR projects read the guidance as current projects may need to ensure that crediting periods have/will commence on or before 30 September 2023.

New projects will need to be registered before the expiry date. Participants intending to submit an application to register a project under the HIR method should do so by 2 July 2023 at the latest.

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) is also considering the Chubb Review recommendations, including those relating to eligible interest holder consent. Refer to the Independent Review of Australian Carbon Credit Units - DCCEEW [4].

Projects planning to transition to a new method

Projects can transition to a new method by submitting an application under s128 of the CFI Act through the Clean Energy Regulator Client Portal [5]. The CER will assess the eligibility of the project under the new method. These details will be method-specific, depending on both the original and new methods. Consent from eligible interest holders may need to be obtained again.

Integrated Farm and Land Management method

A new ACCU Scheme (previously Emissions Reduction Fund) method will be released in 2024 which will include regenerative activities from the HIR method. The WA Government will review the method to consider the provision of State Eligible Interest Holder (EIH) consent by the Minister for Lands.

Information about HIR projects on pastoral lease lands in WA

Human-induced regeneration (HIR) projects increase the economic value of the State’s natural assets and plays an important role in meeting Australia's domestic and international emissions reduction commitments. These projects also provide significant volumes of carbon offsets for hard to abate sectors.

HIR involves the regeneration of native vegetation due to changes to pastoral practices, in particular the timing and extent of livestock and feral animal grazing. By reducing grazing pressure and ceasing clearing, native forest is able to regenerate from lignotubers and natural seed stocks. HIR does not involve new plantings or a requirement to de-stock.

A carbon farming project has carbon estimation areas (CEAs) where trees able to reach at least 2m in height and 20% canopy cover are located. CEAs are a minimum of 0.2ha in area and can be scattered across the landscape or contiguous. Pastures, scrubby vegetation and grasses, roads, lakes and buildings are not eligible.

The growth of eligible vegetation within a CEA indicates the increase in carbon stocks. For each tonne of CO₂e- sequestered, 1 Australian carbon credit unit (ACCU) may issued by the Clean Energy Regulator (CER).

CEAs are identified by the project proponent and registered with the CER. They can be removed from the project for a range of reasons eg fire or other natural events, clearing for resource activities, etc. CEAs can cover between 10 and 45% of a pastoral lease, depending on the geography of the landscape.

For more information about HIR projects see the ACCU Scheme [2] page and the Setting up for success guide [6] found to the right of this page.

Project area exclusions

The Department of Planning, Lands and Heritage (DPLH) assesses applications for the State's EIH consent on behalf of the Minister for Lands. The forms are found here [7] for HIR and savanna burning (in the Kimberley). Part of the process administered by DPLH is the exclusion of specific areas. This is to reduce the impact on resource activities and the carbon farming project. DPLH requires the carbon project proponent to do the following:

Granted mining leases and associated general purpose leases and miscellaneous licences, and petroleum production licence areas <1 block must be formally excluded from the project area unless the mining lease owner agrees the activities can take place. The State requires evidence of any such agreement prior to its EIH consent being given.
Pending mining leases and associated general purpose leases and miscellaneous licences must be formally excluded from project areas unless the mining lease owner agrees the carbon farming activities can take place on the area. The State requires evidence of any such agreement prior to its EIH consent being given.
CEAs may not be placed over other granted interests. These include, but are not limited to, dedicated roads, easements or reserves, national parks, nature reserves and State forests. State Agreement Act areas must also be formally excluded.
CEAs may not be placed over areas of land which have a Notice of Intention to Take (NOITT).

Other mining tenements including prospecting licences, exploration licences, and retention licences do not need to be formally excluded from the project area.

Maps

DPIRD has a Carbon Farming Portal with an interactive map [8] that shows the intersection between pastoral leases, registered HIR projects, mining activities, conservation parks, local government areas, native title determinations and other land uses. Data is drawn from a variety of sources and updated as the originating database changes.

Compensation for clearing of Carbon Estimation Areas

The State Government made a commitment to pay compensation that a carbon farming proponent would ordinarily seek under the Mining Act (WA) should permanent loss of carbon stocks result from low-impact mining and exploration activities. Such clearing activities need to be exempt from making a Mining Rehabilitation Fund Act 2012 (WA) contribution ($50,000 in a financial year).

Given the low levels of carbon sequestered per hectare and the area of HIR projects, it is expected any carbon lost through native vegetation clearing for exploration or other low impact mining or petroleum activities will be low. Resource companies and project proponents/pastoralists are encouraged to work together to reduce the impact of clearing on CEAs and minimise loss of vegetation to protect the enviroment and reduce emissions.

When seeking compensation, the carbon farming proponent needs to provide independent and verifiable evidence that clearing has lead to a of loss of eligible vegetation for a designated CEA that would otherwise have generated ACCUs. Details of the areas eligible for carbon credits and the sequestration potential of the area is reported to the CER.

Further information, contact Kerrie House on (08) 6552 1871.

Eligible Interest Holder Consent

The registration of carbon projects is the responsibility of the Australian Government through the CER. This body is responsible for the Emissions Reduction Fund [9] (ERF). Registration has a number of requirements such as eligibility criteria, fit and proper person test and demonstration of legal right - if the project proponent is not the pastoral lessee, evidence of the legal right to undertake the project is required.

Any person or organisation listed on the land title as having an interest in the land is an eligible interest holder [7] (EIH) needs to give their consent for the project to go ahead. These include financial institutions with a mortgage over the land, holders of easements, reserves or sub-leases, and certain Native Title holders. As a pastoral lease is on Crown land, the State needs to provide its EIH consent for a project to be unconditionally registered and issued with ACCUs.

Where project areas are located within a determined native title claim with one or more Registered Native Title Bodies Corporate (RNTBCs), each is an eligible interest holder. Consent from traditional owners must be prior, informed and freely provided.

All relevant parties to the HIR carbon project (i.e. pastoral lessee and/or project proponent and/or carbon service provider) must sign a Deed of Agreement with the State which covers indemnities and various undertakings.