EPA Victoria and ANZ retire offsets to ensure no double counting
Written by: Paris Nichols of EPA Victoria
EPA Victoria (EPA) and ANZ completed the first voluntary retirement of Clean Development Mechanism (CDM) offsets from the New Zealand Government's Official Registry on 29 September 2008.
EPA purchased the Kyoto Protocol-compliant credits as part of its carbon neutrality for 2007-08, and chose to work with ANZ because of the opportunity to retire the credits permanently off a public registry.
Why is retiring important?
Retiring carbon offsets from a public registry is regarded as best practice because it provides the highest level of security that the carbon offsets can't be sold twice. Once a carbon offset is retired, it is canceled from any potential future sale. Additionally, retired offset information is available on the public registry and therefore allows for greater public scrutiny than current practice.
ANZ's Head of Metals, Energy and Emissions Paul Thomas explains "When the CDM credits are created on a registry, a serial number for each credit is created, this allows each credit to be tracked as they are sold and transferred between accounts and through various registries.
"After we purchased these credits for EPA, we transferred them from our main holding account to our cancellation account in the New Zealand registry using the same serial. We then notified the New Zealand regulator that we wished to retire these numbers so that they could not be used again. The credits were transferred from ANZ's cancellation account to the NZ General Cancellation account. This General cancellation account is for the voluntary retirement of the credits.
"Retirement of credits on the NZ registry is made public only for the previous calendar year, so EPA's credits will be seen from 2009.
The Australian Government is currently developing a registry that is compliant with the Kyoto Protocol. When this becomes available, EPA intends to use this registry to retire its credits.
EPA Director, Terry A'Hearn, said "We believe retiring our offsets from a public registry gives us the highest level of security that double-counting did not occur and ensures our carbon neutrality.
"We are constantly searching for better approaches to manage our carbon footprint. It is important to have hands-on experience in the processes businesses are seeking our advice and support on."
ANZ's Paul Thomas said "Voluntarily retiring carbon offsets from emissions trading registries such as New Zealand's is emerging as best practice."
Carbon Offsets in Context
EPA has purchased carbon offsets every year since 2005-06 as the last step in its Carbon Neutral commitment. Guided by its Carbon Management Principles, EPA measures, avoids and reduces emissions wherever possible before purchasing offsets.
"Avoiding and reducing first means we pay less to purchase offsets because we have less residual emissions. In turn, purchasing offsets sets an internal cost of carbon to help us drive further reductions" said Mr. A'Hearn.
EPA's internal cost of carbon, based on its GreenPower and carbon offset purchases for 2007-08, is around $42 per tonne of carbon dioxide equivalent.
EPA's experience in dealing with the issues surrounding carbon offset purchasing has led it to develop resources to help businesses with the process. It has a set of Tips for Purchasing Offsets available on its website, as well as answers to Frequently Asked Questions.
EPA has also partnered with RMIT's Global Sustainability Institute to provide the Carbon Offset Guide. This website includes a comprehensive directory of carbon offset providers in Australia, as well as resources to help readers understand emerging issues in the carbon offset market.