ALERT: Release of draft Savanna Fire Management (Sequestration and Avoidance) method

DCCEEW has today released its exposure draft for the new Savanna Fire Management (SFM) sequestration and avoidance method.

The new SFM sequestration and avoidance method seeks to expand crediting to better account for carbon sequestration triggered by low-intensity burns, which re-invigorates plants to better promote growth.

Notably, the draft method proposes to allow existing SFM projects to be credited for historical sequestered carbon, if they transfer to the new method and commit to permanence obligations. Projects would be credited in their first reporting period.

This will be subject to ERAC’s determination on the financial additionality of back-credited sequestration activity under the Offsets Integrity Standards.

As we flagged in our latest analyst briefing, published on Tuesday, we see potential for the improved crediting of sequestration to trigger “significant issuance uplift”, with potential for some projects to see a crediting uplift of between 120–715%, depending on local factors (e.g. the different types and proportion of live trees).

Our modelling also indicates that the back-crediting of historical sequestration could result in a “significant flood” of issuance, particularly where back-crediting occurs immediately on transition. As noted in our briefing, the new SFM sequestration method therefore has potential to develop into a material