Market Update | 17 November

• Federal push to build access to clean energy for First Nations
• Credibility for voluntary market key focus for Climate Active under proposed updates 
• VEU sets dates for changes on activity specifications

Indigenous community access to the benefits of the energy transition

The Federal Government has unveiled a consultation paper laying the groundwork for the Australian First Nations Clean Energy Strategy, aimed at benefiting Indigenous communities. Drawing from extensive engagement with First Nations communities and input from the Clean Energy Advisory Committee, the strategy focuses on providing reliable and affordable energy, fostering economic participation, and ensuring Indigenous people are equal partners in the clean energy transition.

The government is investing $83.8 million in the First Nations Community Microgrids program and committing $2 million to the Hydrogen Headstart program. Members of the Clean Energy Advisory Committee, Dr. Kate George and Travis Thomas, emphasised the strategy’s potential to support key reforms and transform opportunities in Indigenous communities. Feedback on the consultation paper is encouraged through the Department of Climate Change, Energy, the Environment, and Water.

Climate Active propose a ratchet up on credibility and integrity in the voluntary climate market

The Department of Climate Change, Energy, the Environment, and Water is seeking public input on proposed updates to the Climate Active program through its Climate Active Program Directions discussion paper. The aim is to enhance voluntary climate action credibility in response to the evolving landscape.

The consultation paper outlines proposals to:

• Elevate climate ambition for certification
• Align Climate Active with broader government climate objectives; 
• and modernise program operations. 

Key proposals outlined in the paper are as follows:

Enhancing Ambition and Action:

Mandatory Gross Emissions Reductions

• Members to produce an emissions reduction strategy with near-term and long-term gross emissions targets aligned with Australia’s Nationally Determined Contribution (NDC).

Tracking Progress

• Members to credibly demonstrate progress towards the specified emissions reduction targets to maintain certification.

Guidance on Emissions Boundaries

• Guidance to establish robust emissions boundaries, potentially mandating inclusion of specific scope 3 emissions sources for certain certification types.

Tightening Offset Use 

• Require eligible international carbon offsets to meet a 5-year rolling vintage requirement.

Integration with Government Objectives:

Renewable Electricity Mandate

• Mandate a minimum percentage of renewable electricity for Climate Active members and require the use of the market-based method to set emissions liability.

Counting ACCU Abatement

• Ensure that abatement from all Australian Carbon Credit Units (ACCUs) used under Climate Active contributes to Australia’s national emissions reduction target under the Paris Agreement.

Program Operation:

Terminology Change

• Replace the term “carbon neutral” with a new term that clearly communicates the meaning of Climate Active certification to consumers.

Certification Pathway Development

• Establish a certification pathway to help current and future members meet the new, heightened standards of Climate Active certification.

Stakeholders are encouraged to provide feedback by December 15, addressing specific questions outlined in the consultation paper.

Read the consultation paper here. 

Changes to VEU released and effective from 1st January 2024

The Department of Energy, Environment and Climate Action has released Victorian Energy Upgrades (VEU) Specifications 2018 – Version 16.0 (VEU Specifications). The changes in the specifications will come into effect on 1 January 2024.

The changes include:

• Changes to the input values used in calculating Victorian energy efficiency certificates (VEECs) for installation of multi-split systems to use the sum of the rated heating and cooling capacity (in kW) of all indoor units installed rather than the rating of the external unit.
• New requirement for internal and external units of multi-split systems to be from the same original equipment manufacturer (OEM).
• Allowing products registered under GEMS (Greenhouse and Energy Minimum Standards) classes 18 to 21 to be eligible for listing as a ducted product, under product categories 6A to 6C.

ESC have released updated guides, VEEC assignment forms and VEEC creation forms for space heating and cooling activity (activity 6) in response to above changes.

Accredited persons will need to use the updated VEEC assignment forms and VEEC creation forms for activities undertaken from 20 November 2023.

Please refer to the program update for further information on the updates.