Federal Register of Legislation - Australian Government

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Other as made
This instrument provides for the crediting of emissions reductions from projects that improve the production efficiency of pasture fed beef cattle herds.
Administered by: Environment and Energy
Registered 24 May 2017
Tabling HistoryDate
Tabled HR25-May-2017
Tabled Senate13-Jun-2017
Date of repeal 26 May 2017
Repealed by Division 1 of Part 3 of Chapter 3 of the Legislation Act 2003

Carbon Credits (Carbon Farming Initiative—Beef Cattle Herd Management) Methodology Variation 2017

I, Josh Frydenberg, Minister for the Environment and Energy, make the following legislative instrument.

Dated            8/5/17          

Josh Frydenberg

Minister for the Environment and Energy

  

Contents

1  Name                                                                                                                                         2

2  Commencement                                                                                                                         2

3  Authority                                                                                                                                   2

4  Variation of the Herd Management Methodology Determination                                              2

Schedule 1—Amendments                                                                                            3

 

 

_________________________________________

 

1  Name

                   This is the Carbon Credits (Carbon Farming Initiative—Beef Cattle Herd Management) Methodology Variation 2017.

2  Commencement

                   This determination commences on the day after it is registered.

3  Authority

                   This determination is made under subsection 106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011.

4  Variation of the Herd Management Methodology Determination

                   The Carbon Credits (Carbon Farming Initiative—Beef Cattle Herd Management) Methodology Determination 2015 is varied as set out Schedule 1.

 

Schedule 1—Amendments

 

[1]           Subsection 5(1)—subsection number

                   Omit the subsection number, “(1)”.

[2]           Section 5—definition of arm’s length agistment arrangement

                   Repeal the definition, substitute:

arm’s length agistment arrangement means a written contract:

                     (a)  under which a party with more grazing available than is needed for its own cattle allows the other party to use the spare grazing capacity; and

                     (b)  where the parties are not linked entities.

[3]           Section 5—definition of associate

                   Repeal the definition.

[4]           Section 5—before definition of business operation

                   Insert the following definitions:

assessment day, for a herd of a project, means the day of the calendar year specified as the assessment day for the herd in accordance with subsection 8(4), or as varied under subsection 8(5).

Note:          The assessment day for the herd will need to be set so that any annual muster and weighing of animals that is needed to provide data in accordance with section 25 can be done within six weeks before or after the day.  For the first and last assessment days, weights taken more than two weeks from the assessment day will be need be adjusted by linear projection in accordance with subsections 25(7) to (11).

                   A project can be divided into several herds with different assessment days.

assessment year, for a herd of a project, means a period of 12 months that:

                     (a)  begins on or after the date of the relevant application for the herd; and

                     (b)  begins on the day after one assessment day and ends on the next assessment day; and

                     (c)  ends during the crediting period.

Note:          A project can be divided into several herds with different assessment days, and therefore different assessment years. The first assessment year of a herd may begin before the beginning of the crediting period, provided that it ends during the crediting period.  In this case there will be 7 assessment years, with the last ending within 12 months before the end of the crediting period.

baseline reference date, for a herd of a project, means the day of the calendar year specified as the baseline reference date for the herd in accordance with paragraph 8(6)(e) and subsection 16(1).

Note:          This date is the end of the period of 7 years in which the emissions intensity reference period can be set.

[5]           Section 5—definition of business operation

                   At the end, add the following note:

Note:          A business operation that defines a herd of cattle for a project must satisfy the separate business operation requirement (section 10) and the herd continuity requirement (section 11).

[6]           Section 5—definition of emissions intensity reference period

                   Omit “subsection 14(2)”, substitute “subsection 16(4)”.

[7]           Section 5—definition of entity

                   At the end, add the following note:

Note:          See section 184.1 of that Act.  The definition covers all kinds of legal persons and other things that in practice are treated as having a separate identity in the same way as a legal person does, and so can be registered for GST. These include an individual, a body corporate, a corporation sole, a body politic, a partnership, any other unincorporated association or body of persons, a trust or a superannuation fund.

[8]           Section 5—definition of herd

                   Repeal the definition, substitute:

full data herd—see subsection 16(2).

herd of a business operation, at a particular time, means all cattle that are on the livestock inventory of the business operation at that time.

Note:          An animal in utero will not be a separate member of the herd.

[9]           Section 5—paragraph (b)(ii) of the definition of Herd Management Calculator

                   Omit “are of a minor nature”, substitute “have a minor effect on the calculation of abatement”.

[10]         Section 5—definition of inventory cattle

                   Repeal the definition.

[11]         Section 5—before the definition of livestock class

                   Insert the following definitions:

limited data herd—see subsection 16(3).

linked, of an entity: if: 

                     (a)  2 entities are members of a group that constitutes the parent entity of a business operation; or

                     (b)  2 entities are related entities within the meaning given by section 9 of the Corporations Act 2001; or

                     (c)  2 entities are both linked to a third entity under paragraph (a) or (b);

the 2 entities are linked to each other.

linked, of a business operation: if:

                     (a)  2 entities are linked to each other; and

                     (b)  each entity is, or is part of the parent entity of, a different business operation;

                   the 2 business operations are linked to each other.

linked, of a herd: if 2 business operations are linked to each other, their respective herds are linked to each other.

[12]         Section 5—after the definition of livestock class

                   Insert the following definitions:

monthly input day—see subsection (6) of Schedule 1.

monthly period—see subsection (5) of Schedule 1.

[13]         Section 5—definition of non-inventory cattle

                   Repeal the definition.

[14]         Section 5—definition of parent entity

                   Repeal the definition, substitute:

parent entity, of a business operation, means:

                     (a)  if the business operation (whether or not it is itself an entity or group of entities) is only a part of a larger entity or a group of entities—the entity or group of entities of which it is a part; and

                     (b)  otherwise—the business operation.

[15]         Section 5—definition of primary business operation

                   Repeal the definition.

[16]         Section 5—after definition of registered entity

                   Insert:

relevant application, for a herd—see subsection 8(4).

[17]         Section 5—definition of secondary business operation

                   Repeal the definition.

[18]         Section 5—definition of section 22 application

                   Repeal the definition, substitute:

section 22 application, in relation to a herd management project, means the application under section 22 of the Act for the declaration of the project as an eligible offsets project.

[19]         Section 5—definition of sub-entity

                   Repeal the definition.

[20]         Section 5—subsection (2), including preceding subheading, but not including following note

                   Repeal the subheading and subsection.

[21]         Section 6

                   Omit “a herd of cattle that are ordinarily grazed together”, substitute “one or more herds of cattle”.

[22]         Boxed note before section 7

                   Omit the boxed note, substitute:

Summary

The project proponent must specify at least one herd for the project in the section 22 application, and may specify other herds later (these do not extend the crediting period).

A herd is specified by specifying the business operation to which it is attached—the herd consists, at any particular time, of the cattle that are on the livestock inventory of the business operation at that time. A business operation does not need to be a separate legal entity, as long as its associated herd is managed as a discrete set of animals over time that can be clearly identified by auditors in the records of its parent entity. 

Each herd has an “assessment day”, which the project proponent must specify in the application (although it may be changed if necessary before the start of the crediting period). Each “assessment year” (the annual cycle for measuring the abatement for the herd) will begin immediately after the assessment day of one calendar year and end on the assessment day of the next. The calculator requires data inputs of the weights of animals present in the herd at the end of an assessment day, and these normally require the weighing of the animals, or of statistically valid samples of the animals, within six weeks before or after the day. (There are alternative provisions for obtaining weights that apply in some circumstances, including where normal mustering is delayed by a natural disturbance). Different herds may have different assessment days. The assessment day for the herd cannot be changed after the first offsets report relating to the herd has been given to the Regulator.

The calculator also requires data inputs of the weights of animals entering or leaving the herd during an assessment year. These may be aggregated monthly.

For each herd, the project proponent must have historical emissions intensity data that enables the baseline data to be calculated. The historical data is calculated for annual cycles that fall within the period of 7 years that ends on the baseline reference date. This is likely to coincide with the assessment day for measuring abatement, but it is not required to.

The majority of the cattle must be in herds that have full historical data (data from 3 full years that are not more than 7 years before the first assessment year of the herd). The baseline emissions of such herds are calculated using the data from that herd only.

The remainder of the herds of the project may have only partial historical data (data from 2 previous years). When calculating the baseline emissions of such a herd, a cap is imposed that is based on historical data from full data herds.

To comply with this determination:

       (a)     for each herd, the business operation and its livestock inventory must be maintained separately from any others that are part of the project, and have continuity over time; and

       (b)     each herd must be managed separately and must not be pastured with herds not in a project except under an arm’s length agistment agreement; and

       (c)     when cattle are moved to or from the herd (by moving them into or out of the livestock inventory):

                (i)    if it is not a transfer from or to a linked herd, it must be a purchase or sale at fair value; and

                (ii)   if it is a transfer from or to a linked herd it:  it must be for a genuine business purpose; it must be recorded as a transaction at fair value, with a statement of the business purpose; and there must be physical movement of the cattle.

A project proponent with several herds may find it preferable to include all of them in the project, even if some are not expected to generate significant emission reductions, in order to allow joint pasturing and to simplify transfers from one herd to another.

Herds with different assessment cycles

The determination allows the project proponent to combine herds with different assessment days in a single project. 

The determination also allows each herd to have its own reporting cycle, providing a separate offsets report for each herd. However, it is not necessary to do this, even if the herds have different assessment days.  If the proponent has a single reporting cycle with the same reporting periods covering all herds, the offsets report for a reporting period must cover the abatement calculations for each herd with an assessment year that finishes during the reporting period.  The abatement is calculated for the whole of each such assessment year, even if it started before the reporting period.

In the last reporting period for the project, there will be no abatement calculated for a herd in relation to time after its last assessment year.

Setting a crediting period for the project

To ensure that the project proponent can get credit in relation to the full 7 assessment years for each initial herd, it should, in its section 22 application, specify a date for the commencement of the crediting period that is later than the declaration date for the project (which is the default date for the beginning of the crediting period under the Act).

The date specified should be after all the initial herds of the project will have had at least one assessment day. This will ensure that they all have one assessment year for each year of the crediting period. (The first assessment year for each herd will begin before the crediting period.)

[23]         Sections 8 to 16

                   Repeal the sections, substitute:

8  Specifying herds of the project

Herd to be identified by specifying business operation

             (1)  In the section 22 application, the project proponent must specify at least one herd of the project by specifying the business operation to which it relates.

             (2)  At least one herd specified in the section 22 application must be a full data herd.

             (3)  The project proponent may also apply to the Regulator in writing for a herd that relates to another specified business operation to be a herd of the project.

 Note:         This subsection allows the project proponent to add a herd after the project has started, but doing this does not change the crediting period for the project.

Assessment day to be specified

             (4)  For each herd, the relevant section 22 application or application under subsection (3) in relation to the herd (the relevant application for the herd) must specify a day of the calendar year to be the assessment day for the herd.

Note:          The assessment day for the herd sets the annual cycles for measurement of abatement.  It will need to be set so that any annual muster and weighing of animals that is needed to provide data in accordance with section 25 can be done within 6 weeks before or after the day. Different herds of the project may have different assessment days.

             (5)  The project proponent may change the assessment day for a herd by specifying a new assessment day in the first offsets report relating to the herd.

Other information required in application

             (6)  The relevant application must also include the following information for each herd and its related business operation:

                     (a)  if the business operation consists of a registered entity or group of entities—details of the entity or entities;

                     (b)  if the business operation does not consist of a registered entity or a group of registered entities—a description of the business operation, including how it satisfies the separate business requirement under subsection 10(3);

                     (c)  if the business operation is different from its parent entity— details of the entity or entities that make up the parent entity;

                     (d)  if the entity or entities making up the business operation or its parent entity have changed since the beginning of the emissions intensity reference period—a description of the changes and details of all the entities;

                     (e)  the baseline reference day for the herd for the purposes of subsection 16(1);

                      (f)  the number of cattle in the herd on the baseline reference day;

                     (g)  the years constituting the emissions intensity reference period for the herd;

                     (h)  the land on which the cattle of the herd grazed in each year of the emissions intensity reference period, other than under an arm’s length agistment arrangement;

                      (i)  to the extent possible, the land on which the cattle of the herd are expected to graze during each year of the crediting period (including under an arm’s length agistment arrangement).

9  Requirements for herds of the project

Requirements for a herd at time of application

             (1)  A herd must not be specified in a section 22 application or an application under subsection 8(3) unless:

                     (a)  it has satisfied the following since the beginning of its emissions intensity reference period:

                              (i)  the separate business operation requirement (section 10);

                             (ii)  the herd continuity requirement (section 11);

                            (iii)  the herd management requirement (section 14);

                            (iv)  the animal identification requirement (section 15); and

                     (b)  it is either a full data herd or a limited data herd.

             (2)  A limited data herd must not be specified in a section 22 application or an application under subsection 8(3) unless:

                     (a)  there is at least one full data herd (a reference herd for the limited data herd) that is, or was, specified in the section 22 application; and

                     (b)  the limited data herds together had a smaller number of cattle on their baseline references dates than the reference herds together had on their baseline reference dates.

             (3)  A herd must not be specified in a section 22 application or an application under subsection 8(3) unless it can be expected to satisfy the following for the period from the date of the relevant application to the end of the crediting period:

                     (a)  the separate business operation requirement (section 10);

                     (b)  the herd continuity requirement (section 11);

                     (c)  the movement of cattle requirement (section 12);

                     (d)  the co-grazing requirement (section 13); the

                     (e)  the herd management requirement (section 14);

                      (f)  the animal identification requirement (section 15).

Effect of herd ceasing to exist or failing to comply with herd continuity requirement

             (4)  If, during:

                     (a)  the period beginning on the date of the relevant application for a herd of the project and ending immediately before the first assessment year for the herd; or

                     (b)  an assessment year for the herd;

                   either:

                     (c)  the business operation to which the herd relates ceases to exist (because the business operation that it relates to ceases to exist); or

                     (d)  the herd fails to satisfy the herd continuity requirement (section 11);

                   the herd is taken to continue to exist as a herd of the project, with zero members, from the beginning of that period until the end of the crediting period.

Note:          An offsets report will be required to record the herd as existing, but as having had zero members.

Effect of failure to comply with another requirement listed in subsection (3)

             (5)  If a herd of the project fails or ceases to satisfy any other provision listed in subsection (3) for an assessment year, the herd is taken, for the purposes of abatement calculations and offsets reports only, to have had zero members throughout the assessment year.

Note:          An offsets report will be required to record the herd as existing, but as having had zero members during that assessment year.  Abatement can be claimed for later assessment years if the failure is rectified

10  Separate business operation requirement

             (1)  A herd of the project satisfies the separate business operation requirement for a period if the business operation for the herd satisfies subsection (2) or (3) throughout the period.

Entire entities

             (2)  A business operation satisfies this subsection if it consists of a registered entity or a group of registered entities.

 Discrete operations

             (3)  A business operation satisfies this subsection at a time if:

                     (a)  its parent entity consists of a registered entity or a group of registered entities; and

                     (b)  it maintains a livestock inventory that is separate from other livestock inventories of its parent entity; and

                     (c)  after the date of the relevant application—the herd is managed as a discrete group of animals over time; and

                     (d)  it is possible to account for all cattle entering or leaving the livestock inventory (including movements to and from other livestock inventories of the parent entity, and including movements that are not sales or purchases).

Examples:  A registered entity that owns several properties may maintain them as separate business operations.

                   Several herds may be maintained on a single property, as long as they are managed as discrete groups—eg animals in each livestock class may be managed as a separate herd, mustered at different times.

Note:          The effect of paragraph (c) is that a proponent may decide at the time of the section 22 application that herds that have been managed together during the emissions intensity reference period should be treated separately during the crediting period, for example to allow annual musters with different assessment days. This will be possible only if the proponent has the data relating to the emissions intensity reference period that allows the emissions intensity of each herd to be calculated.

11  Herd continuity requirement

             (1)  A herd satisfies the herd continuity requirement for a period if it satisfies the following throughout the period:

                     (a)  where the business operation consists of a registered entity or a group of registered entities—at any change in the entities, the livestock inventories of the entities are transferred in such a way that the same animals are on the livestock inventory of the business operation before and after the change;

                     (b)  at any change in the registered entity or entities that constitute its parent entity, the livestock inventories of the entities are transferred in such a way that the same animals are on the livestock inventory of the business operation before and after the change;

                     (c)  there is no break in the continuity of its livestock inventory, and, in particular, its livestock inventory continues to be maintained separately from other livestock inventories of its parent entity;

                     (d)  the information referred to in Schedule 1 is available for the herd.

Example:    There is a merger between two companies, one a backgrounding operation for a feedlot and the other a breeding property that supplies cattle for background fattening before feed-lotting.  If the herds are kept separate and under separate management after the merger, and there is no change to their inventories, there would be no break in continuity for the two business operations.

             (2)  A livestock inventory that is temporarily empty does not necessarily have a break in its continuity.

Example:    The livestock inventory of a business operation is temporarily empty because the cattle are sold off due to drought, with the intention of restocking when the drought ends and continuing in the project, as indicated, for example, in the offsets reports.

12  Requirement relating to movements of cattle

Note:       This section does not apply to cattle that enter the herd by birth or as feral animals or cleanskins, rather than by moving from another herd. (Animals that enter as feral animals or cleanskins are covered by subsection (9) of Schedule 1).

             (1)  A herd satisfies the movement of cattle requirement for a period if, throughout the period:

                     (a)  any movement of cattle to or from the herd, other than a movement from or to a linked herd, is a purchase or sale at fair value; and

                     (b)  any movement of cattle between the herd and a linked herd:

                              (i)  is for a genuine business purpose that accords with established industry practice; and

                             (ii)  is recorded as a transaction at fair value; and

                            (iii)  results in a physical movement from one property to another within 6 months; and

Note:    The project proponent will need to keep a record of the business purpose of such a movement—see paragraph 28A(c).

                     (c)  no movements to the herd take place from another herd of the project whose last assessment year has finished at the time of the movement; and

                     (d)  no movements from the herd take place after the end of its last  assessment year to another herd of the project whose last assessment year has not finished at the time of the movement. 

Note:          Additional record requirements apply to movements in the last year of the crediting period for the purposes of ensuring compliance with paragraphs (c) and (d)—see paragraph 28A(d).

             (2)  For this section, ignore any movement that involves only cattle leaving the herd for the purpose of being exported live, or being slaughtered, as soon as practicable.

13  Requirement relating to co-grazing

                   A herd satisfies the co-grazing requirement for a period if cattle are not grazed with other cattle at any time during the period except in circumstances where all the following apply:

                     (a)  either:

                              (i)  the other cattle are part of a herd of an eligible herd management project (and are therefore accounted for separately); or

                             (ii)  the cattle of the herd are under an arm’s length agistment arrangement; or

                            (iii)  the other cattle are under an arm’s length agistment arrangement;

                     (b)  each animal of the herd is identifiable as a member of the herd (eg through tagging);

                     (c)  the average liveweight of each input group of the herd will be available for each date in relation to which an input to Calculator will be required under Schedule 1.

14  Requirements relating to the management of herds

                   A herd satisfies the herd management requirement for a period if, throughout the period:

                     (a)  the cattle of the herd are grazed in Australia; and

                     (b)  the feed of the cattle comes principally from grazing or forage; and

                     (c)  the cattle of the herd are managed in a way consistent with:

                              (i)  ANZSIC class 0142 (beef cattle farming); or

                             (ii)  ANZSIC class 0144 (sheep‑beef cattle farming); or

                            (iii)  ANZSIC class 0145 (grain‑sheep or grain‑beef cattle farming).

Note 1:       Herds managed in a way consistent with ANZSIC class 0143 (beef cattle feedlots) do not meet the requirements of this Part.

Note 2:       Members of a herd (that is, individual animals) might leave and join the herd over time.

15  Animal identification requirement

                   A herd satisfies the animal identification requirement for a period if, throughout the period, the project proponent is able to identify the members of each group of animals in the herd for which inputs are required by Schedule 1.

16  Baseline reference date and emissions intensity reference period

The baseline reference date for a herd

             (1)  For the purposes of this section, the project proponent must set for each herd a date, within the period of 12 months before the date of the relevant application, to be the baseline reference date for the herd.

Note:          The baseline reference date should be set in accordance with the business-as-usual history of mustering and weighing of the herd so that the data required for this section is obtainable in accordance with section 27.  For most herds, it is likely to be the same day of the year as the assessment day.

Full data herd

             (2)    A herd is a full data herd if, the herd has a period of a whole number of years:

                     (a)  that ended on the baseline reference date for the herd; and

                     (b)  consisted of no more than 7 years; and

                     (c)  for each year of which the project proponent has the data necessary to calculate the liveweight gain of the herd in accordance with section 26; and

                     (d)  that included the 3 most recent years preceding the baseline reference date, and no other years, for which the liveweight gain of the herd was greater than zero.

Note:          If there was liveweight gain in each of the 3 years leading up to the baseline reference date, this will constitute the period for this subsection. However, for each year in which there was no liveweight gain, the period can be extended back to include a year in which there was liveweight gain, up to a maximum of 7 years.

Limited data herd

             (3)  A herd is a limited data herd if:

                     (a)  it is not a full data herd; and

                     (b)  it has a period of a whole number of years:

                              (i)  that ended on the baseline reference date for the herd; and

                             (ii)  consisted of no more than 7 years; and

                            (iii)  for each year of which the project proponent has the data necessary to calculate the liveweight gain of the herd in accordance with section 26; and

                            (iv)  that included the 2 most recent years preceding the baseline reference date, and no other years, for which the liveweight gain of the herd was greater than zero.

Note:          If there was liveweight gain in each of the 2 years leading up to the baseline reference date, this will constitute the period for this subsection. However, for each year in which there was no liveweight gain, the period can be extended back to include a year in which there was liveweight gain, up to a maximum of 7 years.

                   The effect of paragraph (a) is that a herd that had 3 years of liveweight gain within the 7 years before the baseline reference date must enter that project as a full data herd.

Emissions intensity reference period

             (4)  For this determination, the emissions intensity reference period for a herd is:

                     (a)  for a full data herd—the 3 years mentioned in paragraph (2)(d); and

                     (b)  for a limited data herd—the 2 years mentioned in subparagraph (3)(b)(iv).

Note:          The years in the emissions intensity reference period need not be consecutive.

                   Each herd in the project will have its own emissions intensity reference period. Each such period might consist of a different set of years.

Definitions

             (5)  For this section:

liveweight gain for the herd for the year means the liveweight gain calculated using Equation 5 (section 21C).

[24]         After section 18

                   Insert the following section:

18A  Transition from earlier version of this determination

Note:       Under the previous version of this determination, all herds in a project had the same assessment day, and the first assessment year began with the crediting period.  A project proponent who transitions from the previous version of the determination to this version before having submitted an offsets report under the previous version will be able to:

(a)              set different assessment days for each herd;  and

(b)              subject to section 69 of the Act, re-set the start time for the crediting period to a date when all the herds have had a first muster, so that each herd will be able to generate seven years of credits. (Section 69, in certain circumstances, allows a project proponent to vary the start time previously set for a crediting period to another time up to 18 months after the declaration of the project.)

             (1)  This section applies to a project if:

                     (a)  after the transition date, this determination as it stood before the transition date applied to a project in accordance with subsection 126(2) of the Act; and

                     (b)  the project proponent, under section 128 of the Act:

                              (i)  requested the Regulator to approve, under section 130 of the Act, the application to the project of this determination as it now stands; and

                             (ii)  with the request, provided, for each pre-transition herd of the project, any information required under section 8 as it now stands that was not provided with the original section 22 application; and

                     (c)  the Regulator has approved the application.

             (2)  The information is taken to have been provided in the original section 22 application.

Note:          This provision ensures that, eg, definitions that refer to information provided in the section 22 application operate correctly.

             (3)  Each pre-transition herd of the project is taken to satisfy subsections 9(1) and 9(3) as a full data herd.

             (4)  In this section:

pre-transition herd, in relation to a project to which subsection (1) applies, means a herd that was part of the project at the time of the request to the Regulator under section 130 (ie, it was not added to the project at the time of transition as a result of a concurrent application).

transition date means the date on which the Carbon Credits (Carbon Farming Initiative—Beef Cattle Herd Management) Methodology Variation 2017 commenced.

[25]         Subsection 19(1)

                   At the end, add the following note:

Note:          Unless the project proponent divides the project into parts under section 77A of the Act (see also section 31 of this determination), an offsets report must relate to a reporting period that applies to the whole project.  The proponent may choose a period between 6 months and 2 years.  The reporting period need not align with the assessment years of any herd of the project.  The offsets report will cover the abatement calculated for each assessment year of any of the herds that ends during the reporting period. 

[26]         Subsection 19(2)

                   In the equation, omit “all years y in the reporting period”, substitute “all assessment years y that end during the reporting period”.

[27]         Subsections 19(2) and 19(3)

                   Omit “year y of the reporting period” wherever occurring, substitute “an assessment year y of the herd that ends in the reporting period.

[28]         Subsection 19(3), note

                   Omit “subsection 21(1)”, substitute “section 21”.

[29]         Section 21

                   Repeal the section, substitute:

21 The baseline emissions

Note:       The baseline emissions, for each year in the reporting period and for each herd in the project, is the estimated methane and nitrous oxide emissions for each year in the reporting period and for each herd that would have occurred had the project not been undertaken, and discounted by the 4% variance discount.

                   For each herd  in the project and each assessment year  of the herd that ends in the reporting period, the baseline emissions  is given by the following formula:

Equation 3

                   where:

                   =  the liveweight gain for herd  for assessment year of the herd, in tonnes, as given by Equation 5.

                    = the baseline annual emissions intensity for herd H, given by:

                             (a)  if herd H is a full data herd—the historical annual emissions intensity for herd  (, in t CO2‑e per tonne of liveweight, as given by Equation 4; and

                             (b)  if herd H is the limited data herd—the lower of the following, in t CO2‑e per tonne of liveweight:

                                          (i)  the historical annual emissions intensity for herd  (, as given by Equation 4;

                                         (ii)  the reference emissions intensity for the project (, as given by Equation 4A.

Note:          The factor  represents a variance discount, which is applied to account for emissions reductions that were due only to environmental variations and compensates for years when herd annual abatement amounts are less than zero.

21A  Historical annual emissions intensity

             (1)  For the definition of  in Equation 3, the historical annual emissions intensity, , for herd , in t CO2‑e per tonne of liveweight, is given by the following formula, where the sums are over all years  of the emissions intensity reference period:

Equation 4

                   where:

                      =  the total emissions of herd , in t CO2‑e, for year  of the emissions intensity reference period, as calculated in accordance with Division 4.

                   =  the liveweight gain for herd  for year of the emissions intensity reference period, in tonnes, as given by Equation 5.

 

             (2)  For subsection (1):

                     (a)  take into account only emissions from the emissions sources specified in the table in section 20; and

                     (b)  assume that the herd’s diet in the emissions intensity reference period consisted entirely of pasture from the region referred to in item 1 of the table in Schedule 1.

21B  Reference emissions intensity for a limited data herd

                   For the definition of  in Equation 3, the reference emissions intensity for the project, HAEIR, in t CO2‑e per tonne of liveweight, is given by the following formula, where the sums are over:

                     (a)  all the herds H that are reference herds for the limited data herd under subsection 9(2); and

                     (b)  for each herd H, all years  of the emissions intensity reference period for that herd:

 

Equation 4A

                   where:

                          and  for herd H and year y of the emissions intensity reference period have the same values as for equation 4.

21C  Liveweight gain for a year

                   For Equations 3, 4 and 4A, the liveweight gain for herd  for year (whether a year of the emissions intensity reference period or an assessment year of the herd) in tonnes, , is given by the following formula:

Equation 5

                   where:

                    =  the total liveweight in tonnes of animals in the herd at the end of the year.

          =  the total liveweight in tonnes of animals leaving the herd during the year.

                   =  the total liveweight in tonnes of animals in the herd at the beginning of the year.

               =  the total liveweight in tonnes of animals entering the herd during the year.

[30]         Paragraph 23(a)

                   Repeal the paragraph, substitute:

                     (a)  the Herd Management Calculator, as in force at the end of the relevant reporting period, must be used for any calculation for which it can appropriately be used in relation to a herd for each assessment year of the herd that ends in the reporting period and for each year of the emissions intensity reference period; and

[31]         Subsection 24(1)

                   Add at the end the following note:

Note:          The input dates are the assessment days that begin and end the calculation year together with either:

      (a)  the days on which animals entered or left the herd; or

      (b)  the days on which the animals are taken to have entered or left the herd under subclause (7) of Schedule 1 (the mid-point days of each month).

[32]         After subsection 24(3)

                   Insert the following subsection:

             (4)  If, for an assessment year of a herd, the average liveweight of any input group is not available in accordance with this section and section 25, equation 2 is taken to give an abatement amount for the herd ( of zero for that assessment year.

[33]         Section 25

                   Repeal the section, substitute:

25  Inputs relating to the crediting period

Sections 25 and 26, as well as Schedule 1, allow for some flexibility in how the proponent can obtain the average liveweights that are to be entered into the calculator. However, it is expected that in most cases, the proponent will follow the following procedure.

For inputs to the calculator, whenever animals enter or leave the herd:

       (a)     they are treated as having entered or left at the mid-point of the month in which they entered or left;

       (b)     if they enter or leave by being bought or sold, the sale weights are used.

Animals that are born into the herd are entered into the calculator as having entered the herd by birth in the month in which they were branded, and are assigned a weight at branding of 75 kg.

In addition, there will be an annual muster at which all animals that are less than 3 years old, but are expected spend more than 12 months in the herd, will be weighed (or suitable samples of them will be weighed). The muster will take place within the period from 6 weeks before to 6 weeks after the assessment day.  (For the first and last assessment days only, weights that are taken outside the period from 2 weeks before to 2 weeks after the assessment day must be adjusted by linear projection. This is because weights taken outside that period could produce discrepancies in the calculations for one assessment year that are not automatically corrected in the next.)

Animals over 3 years old will be taken to have the weights derived in accordance with paragraph (1)(e).

For animals that that are expected to spend less than 12 months in the herd, the proponent will wait until they are sold, and will then use linear projection under paragraph (1)(h) to derive weights for the assessment day. (Note that dates used for linear projection must be after the date of application and before the end of the crediting period.)

If the animals recorded by the muster are the same as the animals on the livestock inventory on the assessment day, these figures will be used as the input figures for the end of one year and the beginning of the next.  However, if any animals enter or leave the herd:

       (a)     between the muster and the assessment day, where the muster is earlier; or

       (b)     between the assessment day and the muster, where the muster is later;

the arrivals and departures will be entered into the calculator in the normal way, for the assessment year in which they occur, and the input figures for the assessment day will be adjusted accordingly.

 

             (1)  For an input relating to the crediting period, the average liveweight of a weighing group must be ascertained by one of the following methods:

                     (a)  weighing all the animals in the weighing group and calculating the average;

                     (b)  weighing all the animals in a statistically valid sample from the weighing group and estimating the average liveweight from the sample in accordance with, and to an accuracy that is consistent with, industry practice;

                     (c)  for a weighing group with an input date at the start of the first assessment year of the herd—applying the average weight of the relevant livestock class of the herd as a whole, calculated in accordance with subsection (4);

                     (d)  for a weighing group with an input date at the start of a later assessment year of the herd—applying the average weight of the relevant input group from the end of the previous year, identified in accordance with subsection (5);

                     (e)  for cows or bulls aged 3 years or more—applying a figure derived in accordance with subsection (5) from the hot standard carcase weights of all animals of the relevant livestock class culled from the herd during the year of the input date;

                      (f)  where the animals in the weighing class were bought or sold on the input date—calculating the average weight from the data in the relevant sale records or receipts;

                     (g)  for a weighing class that consists of animals entering the herd by birth, and the input date is the date of their branding—applying a default branding weight of 75 kg;

                     (h)  by linear projection in accordance with subsections (7) to (12).

Note 1:       Values ascertained consistently with Accounting Standard AASB 141—Agriculture would be expected to comply with paragraph (b).

Note 2:       If animals are bought or sold within 1 month before or after an assessment day, paragraph (f) allows sale records or receipts to be used for the assessment day input as well as the input for entering or leaving the herd (ie, the same weight may be used for both). 

Note 3:       For input groups to which paragraph (g) applies, see item 5 in Schedule 1.

Example 1: For paragraph (d), for a herd with an assessment day of 31 December, suppose a group of cattle that are in the livestock class of 1-2 year old steers at the start of year 2 are sold in August of year 2 when they are in the livestock class of 2-3 year old steers. Some of the animals had been in the herd for the whole of year 1, while others had been purchased in March of year 1 as steers less than one year old.

At the start of year 2, the animals form an input group requiring an average weight to be entered into the Calculator for the start of year 2. They could be divided into two weighing groups based on their history. The animals that had been in the herd for the whole of year 1 can be taken to have the average weight of 1-2 year-old steers that were entered into the Calculator for paragraph 2(d) of Schedule 1 at the end of the previous year. The rest of the animals can be taken to have the average weight that the under one year olds purchased in March of year 1 had reached by the end of that year, as entered into the Calculator for paragraph 6(b) of Schedule 1.

Example 2: A project proponent could collect all the data required for input weights as follows:

•           within 6 weeks before or after the start of the first assessment year, take weights or sample weights of each livestock class (possibly relying on paragraph 1(c) and subsection (9))

•           ensure that weights are recorded in the sale records or receipts for each sale or purchase

•           within 6 weeks before or after the end of each assessment year, take weights or sample weights of each livestock class in the resident herd and in each group of animals that entered the herd during the year (possibly relying on paragraph 1(c) and subsection (10)).

Time of weighing—assessment days

             (2)  For an input date that is an assessment day, if average liveweight is to be ascertained under paragraph (1)(a), (b) or (c), the weighing must be done within the following periods:

                     (a)  for the first assessment day and last assessment day (beginning of the first assessment year and end of the last assessment year)—within 2 weeks before or after the assessment day;

                     (b)  for any other assessment day—within 6 weeks before or after the assessment day.

Time of weighing—other input dates

             (3)  For an input date that is not an assessment day, if average liveweight is to be ascertained under paragraph (1)(a), (b) or (c), the weighing must be done within the monthly period in which the input date falls.

Note:    Subsections (2) and (3) are not relevant where the project proponent is using weights in sales records or receipts under paragraph (1)(f).

For the first assessment day, average weight of a livestock class may be used for all input groups in the class

             (4)  For the purposes of paragraph (1)(c), the project proponent may calculate the average liveweight of all animals in the herd of a particular livestock class at the start of the first assessment year of the herd by:

                     (a)  weighing all the animals in the livestock class and calculating the average; or

                     (b)  weighing all the animals in a statistically valid sample from the livestock class and estimating the average liveweight from the sample in accordance with, and to an accuracy that is consistent with, industry practice.

Using weights calculated for inputs at the end of one year in calculating inputs at the beginning of the next year

             (5)  For the purposes of paragraph (1)(d), an input group from the previous year is relevant to the weighing group if:

                     (a)  the input date of the input group was the end of the previous year; and

                     (b)  all the animals in the weighing group were in the input group.

Estimation using hot standard carcase weight and dress out percentage

             (6)  For the purposes of paragraph (1)(e), liveweight of a group of animals that are slaughtered may be estimated by converting hot standard carcase weights for the animals into liveweight using:

                     (a)  the abattoir records of dress out percentage for the group of animals; or

                     (b)  a default dress out percentage of 55%.

Linear projection from known weights

             (7)  Linear projection may be used to establish the average weight of a weighing group on an input date if there are two dates for the group, Date 1 and Date 2, such that:

                     (a)  Date 1 is before Date 2; and

                     (b)  for each of Date 1 and Date 2, either:

                              (i)  it is an input date for the same group, and the average weight is available in accordance with this section, other than by use of linear projection (paragraph (1)(h) and this subsection); or

                             (ii)  it is a monthly input day for subsection (6) of Schedule 1 and the average weight of the animals in the group can be established for the date using a method listed in paragraph (1)(a), (b) or (f), as if it were an input date; and

                     (c)  there is no date between Date 1 and Date 2 that satisfies subparagraph (a)(i); and

                     (d)  both dates are after the date of the relevant application and no later than the last day of the crediting period; and

                     (e)  subsection (8), (9), (10) or (11) is satisfied.

Case A—General—dates on either side of input date and no more than 12 months apart

             (8)  This subsection is satisfied if:

                     (a)  Date 1 is before the input date and Date 2 is after the input date; and

                     (b)  the two dates are no more than 12 months apart.

Case B—Input date is the first assessment day—early or late muster

             (9)  This subsection is satisfied if:

                     (a)  the input date is the start date of the first assessment year; and

                     (b)  Date 1 is either 4 weeks before the input date or 4 weeks after the input date; and

                     (c)  average liveweight for Date 1 is ascertained under paragraph (1)(a), (b) or (c) from weighing within 2 weeks before or after Date 1; and

                     (d)  Date 2 is after the input date and no later than the next assessment day.

Note:          If both Date 1 and Date 2 are after the input date, the average weights from those 2 dates will be projected back to the input date.

Case C—Input date is the last assessment day—early or late muster

           (10)  This subsection is satisfied if:

                     (a)  the input date is the last day of the last assessment year; and

                     (b)  Date 1 is before the input date and no earlier than the previous assessment day; and

                     (c)  Date 2 is either 4 weeks before the input date or 4 weeks after the input date; and

                     (d)  average liveweight for Date 2 is ascertained under paragraph (1)(a), (b) or (c) from weighing within 2 weeks before or after Date 2.

Note:          If both Date 1 and Date 2 are before the input date, the average weights from those 2 dates will be projected forward to the input date.

Allowance for annual muster delayed by natural disturbance

           (11)  This subsection is satisfied if:

                     (a)  the input date is an assessment day, other than the end of the last assessment year; and

                     (b)  Date 1 is before the input date and no earlier than:

                              (i)  if the project proponent applied subsection (9) to ascertain the average weights for the previous assessment day—the Date 2 used for that calculation; and

                             (ii)  otherwise—the previous assessment day; and

                     (c)  Date 2 is after the input date and no later than 3 months after the input date; and

                     (d)  average liveweight for Date 2 is ascertained under paragraph (1)(a), (b) or (c) from weighing within 2 weeks before or after that date; and

                     (e)  the Regulator has approved in writing the application of this provision to the input.

           (12)  The Regulator must not approve the application of subsection (11) unless it is satisfied, on the basis of evidence provided by the project proponent, that because of a natural disturbance or the expectation of a natural disturbance, it was not reasonably practicable for the project proponent to weigh the animals in the weighing group, or a statistically valid sample of the animals, within the period required by subsection (2) or (9).

Note:          If the project proponent is unable to satisfy the Regulator of these matters, so that the average weight of the animals in the weighing group cannot be obtained, the abatement amount for the herd for the assessment year will be taken to be zero—see subsection 24(4).

[34]         Section 26—heading

                   Repeal the heading, substitute:

26  Inputs relating to the emissions intensity period

[35]         Paragraph 26(1)(a)

                   Omit “the crediting period were a reference to”, substitute “an assessment year of the herd were a reference to a year of”.

[36]         Paragraph 28(a)

                   Omit “each year in the reporting period”, substitute “each assessment year of the herd that ends in the reporting period”.

[37]         Paragraphs 28(c) and (d)

                   Repeal the paragraphs, substitute:

                     (c)  the assessment day for the herd;

                     (d)  in the first offsets report relating to the herd, if the assessment day for the herd is a new assessment day specified in accordance with subsection 8(5)—the assessment day originally specified for the herd in the section 22 application or the application under subsection 8(3);

[38]         Subparagraph 28(e)(i)

                   Repeal the subparagraph, substitute:

                              (i)  identifies the land on which the herd grazed in each year of the reporting period; and

[39]         Before section 29

                   Insert the following section in Division 3:

28A  General

                   For each herd, as part of or in addition to the records required by the Rule, the project proponent must maintain a separate and self-contained record in relation to each of the following matters that is in an easily accessible form to facilitate an audit of whether the relevant provisions have been complied with in relation to the herd at all relevant times:

                     (a)  the separate business operation requirements (section 10);

                     (b)  the herd continuity requirements (section 11);

                     (c)  the movement of cattle requirement for movements between a project herd and a linked herd (paragraph 12(1)(b); and

                     (d)  the movement of cattle requirement in relation to the last year of the crediting period (paragraphs 12(1)(c) and (d)).

[40]         Subsection 30(3)

                   Repeal the subsection, substitute:

             (3)  For each herd, the project proponent must monitor the following:

                     (a)  the land on which the herd grazed in each year of the reporting period;

                     (b)  the cattle of the herd during each year of the reporting period;

                     (c)  any changes to the entity or entities that constitute:

                              (i)  the business operation for the herd during the reporting period; or

                             (ii)  the parent entity of the business operation.   

[41]         Schedule 1

                   Omit all words after the heading and before the table, substitute:

Note:       See sections 23 and 24.

             (1)  In this Schedule:

                     (a)  a reference to a calculation year is a reference to the assessment year or year of the emissions intensity reference period for the herd to which the Herd Management Calculator is being applied; and

                     (b)  where the calculation year is a year of the emissions intensity reference period for the herd, a reference to an assessment day for the herd is a reference to the day of the calendar year on which the calculation year ends.

             (2)  The start day to be entered for item 1(b) of the table is the assessment day immediately before the beginning of the calculation year.

             (3)  A reference in the table to numbers at the start of the year is a reference to numbers at the end of the start day.

             (4)  A reference in the table to numbers at the end of the year is a reference to numbers at the end of the assessment day that ends the calculation year. 

             (5)  The calculation year is divided into 12 monthly periods, lasting one month each.

             (6)  For each monthly period, there is a monthly input day, which is day that includes or starts on the mid-point of the monthly period.

             (7)  The project proponent may treat animals that entered or left the herd during a monthly period as having entered or left on the monthly input day.

Note:    This allows the project proponent to consolidate into a single input group animals that were sold at different times within the same month.  Paragraph 25(1)(f) allows the sale weights to be used for the input.

             (8)  For item 5 of the table, branding includes tagging or other application of identification marks to an unidentified animal.

             (9)  For item 5 of the table, feral animals or cleanskins brought into the herd are treated as entering the herd by ‘other management action’ when they are branded. (They, or suitable samples of them, will need to be weighed at the same time.) If this is done as part of a general muster in which weights are obtained that can be used for the input on an assessment day, the animals may be treated as having been branded on the assessment day.

Note:          The Herd Management Calculator does not require entry of data on deaths or unaccounted departures—these are dealt with by calculations from the other data.

Table of inputs into the Calculator

           (10)  Inputs required by the Herd Management Calculator, in relation to a calculation year, are set out in the following table.

[42]         Schedule 1, item 1

                   Repeal the item, substitute:

1

The herd

 (a)   region primarily occupied by the herd in the year

(b)    start day for the calculation year

 

Region

Date

 

 

[43]         Schedule 1, note following the table

                   Repeal the note.