On Tuesday, DCCEEW published a new draft landfill gas method outlining updated rules for crediting emission reductions from landfills. Following further feedback, the method will be finalised for assessment by ERAC.
The new exposure draft deviates slightly from DCCEEW’s “preferred options” paper published in May 2024. Key changes include:
- Default baselines will be reset to a variable starting value depending on project type, with largest projects generally seeing higher starting values than expected.
- Upward sloping baselines will be implemented, but at a slower value.
- A crediting extension of up to 12 years will be available for existing projects that transition to the new method.
Modelling indicates that the differences between the new draft method and DCCEEW’s earlier reform paper are small, but impactful.
Should it be adopted, we expect the new landfill gas method to have a significant impact on Australia’s carbon market, generating an additional 17 million ACCUs, which will materially re-shape Australia’s supply landscape – and price development.
In this analyst briefing, we outline the key changes in the updated new draft landfill gas method, and model potential impacts on forecast ACCU supply, along with broader market and pricing dynamics, to 2035.
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