Commonwealth: Carbon Farming Initiative Amendment Act 2014 (Cth)

Carbon Farming Initiative Amendment Act 2014 No. 119, 2014 An Act to amend the Carbon Credits (Carbon Farming Initiative) Act 2011, and for other purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Amendments Part 1—Purchase of eligible carbon credit units by the Commonwealth Division 1—Amendments Carbon Credits (Carbon Farming Initiative) Act 2011 Division 2—Transitional provisions Part 2—Other amendments Division 1—Amendments Australian National Registry of Emissions Units Act 2011 Carbon Credits (Carbon Farming Initiative) Act 2011 Clean Energy Regulator Act 2011 National Greenhouse and Energy Reporting Act 2007 Division 2—Application and transitional provisions Part 3—Additional amendments relating to legislative rules Carbon Credits (Carbon Farming Initiative) Act 2011 Schedule 2—Emissions reduction safeguard mechanism Part 1—Main amendments National Greenhouse and Energy Reporting Act 2007 Part 2—Consequential amendments Carbon Credits (Carbon Farming Initiative) Act 2011 National Greenhouse and Energy Reporting Act 2007 Part 3—Transitional provisions Carbon Farming Initiative Amendment Act 2014 No. 119, 2014 An Act to amend the Carbon Credits (Carbon Farming Initiative) Act 2011, and for other purposes [Assented to 25 November 2014] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Carbon Farming Initiative Amendment Act 2014. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 25 November 2014 2. Schedule 1 A single day to be fixed by Proclamation. 13 December 2014 However, if the provision(s) do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period. (F2014L01691) 3. Schedule 2, Parts 1 and 2 1 July 2016. 1 July 2016 4. Schedule 2, Part 3 The day after this Act receives the Royal Assent. 26 November 2014 Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Amendments Part 1—Purchase of eligible carbon credit units by the Commonwealth Division 1—Amendments Carbon Credits (Carbon Farming Initiative) Act 2011 1A Subsection 3(2) (heading) Repeal the heading, substitute: Climate Change Convention and Kyoto Protocol etc. 1B Subsection 3(2) Omit "to implement certain obligations that Australia has under", substitute "to remove greenhouse gases from the atmosphere, and avoid emissions of greenhouse gases, in order to meet Australia's obligations under any or all of the following". 1C Paragraph 3(2)(a) Omit "and". 1D At the end of subsection 3(2) Add: ; (c) an international agreement (if any) that is the successor (whether immediate or otherwise) to the Kyoto Protocol. 1 At the end of section 3 Add: Purchase of carbon abatement by the Commonwealth (5) The fourth object of this Act is to authorise the purchase by the Commonwealth of units that represent carbon abatement. 2 Section 4 Before: • An Australian carbon credit unit is personal property and is generally transferable. insert: • Australian carbon credit units and certain other types of units may be purchased by the Commonwealth. 3 Section 5 Insert: carbon abatement means: (a) the removal of one or more greenhouse gases from the atmosphere; or (b) the avoidance of emissions of one or more greenhouse gases. carbon abatement contract has the meaning given by section 20B. carbon abatement contractor has the meaning given by section 20B. carbon abatement purchasing process has the meaning given by section 20F. Commonwealth Registry account has the same meaning as in the Australian National Registry of Emissions Units Act 2011. Doha Amendment means the amendments to the Kyoto Protocol that: (a) were adopted by the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, in Decision 1/CMP.8; and (b) are set out in Annex I to that Decision. Note 1: The Doha Amendment was adopted in Doha, Qatar, in December 2012. Note 2: The Doha Amendment could in 2014 be viewed on the United Nations Framework Convention on Climate Change website (http://www.unfccc.int). eligible carbon credit unit means: (a) a Kyoto Australian carbon credit unit; or (b) a prescribed eligible carbon unit. Emissions Reduction Fund Register means the register kept under section 167. legislative rules means rules made under section 308. 3A Section 5 (at the end of the definition of prescribed eligible carbon unit) Add: A unit must not be prescribed for the purposes of this definition unless the unit represents carbon abatement that is able to be used to meet Australia's climate change targets under: (c) the Kyoto Protocol; or (d) an international agreement (if any) that is the successor (whether immediate or otherwise) to the Kyoto Protocol. For the purposes of the application of the definition of Kyoto Protocol to paragraph (c), if the Doha Amendment is not in force for Australia, the Doha Amendment is taken to be in force for Australia. 4 Section 5 (definition of Register of Offsets Projects) Repeal the definition. 5 After Part 2 Insert: Part 2A—Purchase of eligible carbon credit units by the Commonwealth Division 1—Introduction 20A Simplified outline of this Part • The Regulator may, on behalf of the Commonwealth, enter into contracts for the purchase by the Commonwealth of eligible carbon credit units. • Such a contract is to be known as a carbon abatement contract. • The Regulator may enter into a carbon abatement contract as the result of a carbon abatement purchasing process. • The Regulator may conduct carbon abatement purchasing processes on behalf of the Commonwealth. Such processes may include reverse auctions and tender processes. • The Regulator must have regard to certain principles and other matters when conducting a carbon abatement purchasing process. Division 2—Carbon abatement contracts 20B Carbon abatement contracts (1) The functions of the Regulator include entering into contracts, on behalf of the Commonwealth, for the purchase by the Commonwealth of eligible carbon credit units. (2) It is immaterial whether the units are in existence when the contract is entered into. (3) For the purposes of this Act, a contract entered into under subsection (1) is to be known as a carbon abatement contract. (4) For the purposes of this Act, if the Regulator enters into a carbon abatement contract with a person, the person is a carbon abatement contractor. 20C When carbon abatement contracts may be entered into (1) The Regulator may enter into a carbon abatement contract under section 20B as the result of a carbon abatement purchasing process conducted by the Regulator under section 20G. (2) The Regulator must not enter into a carbon abatement contract under section 20B unless the carbon abatement contractor for the contract is a project proponent for an eligible offsets project. Note: For declarations of eligible offsets projects, see section 27. The requirements for such a declaration include that the project proponent for the project passes the fit and proper person test. 20CA Duration of carbon abatement contracts (1) In setting the duration of a proposed carbon abatement contract, the Regulator must have regard to the following matters: (a) such matters as are specified in the legislative rules; (b) such other matters (if any) as the Regulator considers relevant. (2) In exercising the power to make legislative rules for the purposes of paragraph (1)(a), the Minister must have regard to the following matters: (a) the principle that, in general, the duration of a carbon abatement contract for the purchase of Australian carbon credit units should not be longer than 7 years; (b) the principle that a longer duration of a carbon abatement contract for the purchase of Australian carbon credit units may be appropriate if the units are, or are to be, derived from an eligible offsets project that has a crediting period of more than 7 years; (c) such other matters (if any) as the Minister considers relevant. 20D Regulator has powers etc. of the Commonwealth (1) The Regulator, on behalf of the Commonwealth, has all the rights, responsibilities, duties and powers of the Commonwealth in relation to the Commonwealth's capacity as a party to a carbon abatement contract. (2) Without limiting subsection (1): (a) an amount payable by the Commonwealth under a carbon abatement contract is to be paid by the Regulator on behalf of the Commonwealth; and (b) an amount payable to the Commonwealth under a carbon abatement contract is to be paid to the Regulator on behalf of the Commonwealth; and (c) the Regulator may institute an action or proceeding on behalf of the Commonwealth in relation to a matter that concerns a carbon abatement contract. 20E Conferral of powers on the Regulator The Regulator may exercise a power conferred on the Regulator by a carbon abatement contract. Division 3—Carbon abatement purchasing processes 20F Carbon abatement purchasing process For the purposes of this Act, a carbon abatement purchasing process means any of the following processes: (a) a reverse auction; (b) a tender process; (c) any other process; for the purchase by the Commonwealth of eligible carbon credit units. (It is immaterial whether the units are in existence when the process is conducted.) 20G Conduct of carbon abatement purchasing processes (1) The Regulator may, on behalf of the Commonwealth, conduct one or more carbon abatement purchasing processes. (2) In exercising the power conferred by subsection (1), the Regulator must have regard to: (a) the principles set out in subsection (3); and (b) such other matters (if any) as are specified in the legislative rules. Principles for conduct of carbon abatement purchasing processes (3) The principles for conducting a carbon abatement purchasing process are that the process should: (a) facilitate the Commonwealth purchasing carbon abatement at the least cost; and (b) maximise the amount of carbon abatement that the Commonwealth can purchase; and (c) be conducted in a manner that ensures that administrative costs are reasonable; and (d) be conducted in a manner that ensures the integrity of the process; and (e) encourage competition; and (f) provide for fair and ethical treatment of all participants in the process. (4) To avoid doubt, the mere fact that a person is a project proponent for an eligible offsets project does not automatically entitle the person to participate in a carbon abatement purchasing process. Division 4—Miscellaneous 20H Legislative rules may provide for certain matters relating to purchased eligible carbon credit units etc. (1) The legislative rules may make provision for and in relation to any or all of the following matters in respect of eligible carbon credit units purchased by the Commonwealth under carbon abatement contracts: (a) transferring purchased units to a specified Commonwealth Registry account; (b) prohibiting or restricting the transfer of units from such an account; (c) cancelling units for which there are entries in such an account. Note: For designation of Commonwealth Registry accounts, see section 12 of the Australian National Registry of Emissions Units Act 2011. Restoration of units that were transferred by mistake (2) If: (a) one or more eligible carbon credit units were transferred from a Registry account kept by a person to a Commonwealth Registry account specified in legislative rules made for the purposes of paragraph (1)(a); and (b) the units have been cancelled; and (c) the Regulator is satisfied that the units were transferred by mistake; then: (d) the Regulator must, by written notice given to the person, determine that the units that were transferred are restored units for the purposes of this section; and (e) a restored unit is taken never to have been cancelled; and (f) the Regulator must make an entry for a restored unit in a Registry account kept by the person. (3) Subsection (2) does not affect the validity of the removal of the entry of a restored unit from the Commonwealth Registry account. (4) A determination made under paragraph (2)(d) is not a legislative instrument. 20J Certain instruments relating to Commonwealth procurement are not applicable (1) An instrument made under section 105B of the Public Governance, Performance and Accountability Act 2013 does not apply in relation to the functions and powers of the Regulator under section 20B or 20G of this Act. Note: Section 105B of the Public Governance, Performance and Accountability Act 2013 provides for the making of instruments relating to procurement. (2) To avoid doubt, the Commonwealth Procurement Rules made under the Financial Management and Accountability Regulations 1997 do not apply in relation to the functions and powers of the Regulator under section 20B or 20G of this Act. 20K Carbon abatement contracts are not instruments made under this Act To avoid doubt, a carbon abatement contract is taken not to be an instrument made under this Act. 6 After Division 2 of Part 12 Insert: Division 3—Information about units purchased by the Commonwealth 163 Information about carbon abatement purchasing processes After the Regulator conducts a carbon abatement purchasing process, the Regulator may publish on the Regulator's website any or all of the following information: (a) when the process was conducted; (b) the weighted average price for eligible carbon credit units that the Commonwealth is purchasing as a result of the process; (c) such other summary information (if any) relating to the process as the Regulator considers appropriate; (d) such other statistics (if any) relating to the process as the Regulator considers appropriate. 163A Annual reports about purchases of eligible carbon credit units As soon as practicable after the end of each financial year, the Regulator must publish on the Regulator's website: (a) the total amount of carbon abatement that will result from the purchase of eligible carbon credit units by the Commonwealth under carbon abatement contracts entered into during the financial year; and (b) the total amount that the Commonwealth will be liable to pay for the purchase of eligible carbon credit units under carbon abatement contracts entered into during the financial year; and (c) the total number of eligible carbon credit units that were transferred to the Commonwealth during the financial year as a result of carbon abatement contracts; and (d) the total amount that the Commonwealth has paid during the financial year for the purchase of eligible carbon credit units under carbon abatement contracts; and (e) such other summary information (if any) relating to the purchase of eligible carbon credit units by the Commonwealth under carbon abatement contracts as the Regulator considers appropriate; and (f) such other statistics (if any) relating to the purchase of eligible carbon credit units by the Commonwealth under carbon abatement contracts as the Regulator considers appropriate. 7 Division 5 of Part 12 (heading) Repeal the heading, substitute: Division 5—Emissions Reduction Fund Register 8 Section 167 (heading) Repeal the heading, substitute: 167 Emissions Reduction Fund Register 9 Subsections 167(1), (2), (3) and (4) Omit "Register of Offsets Projects", substitute "Emissions Reduction Fund Register". 10 Subsections 168(1) and (3) Omit "Register of Offsets Projects" (wherever occurring), substitute "Emissions Reduction Fund Register". 11 At the end of section 168 Add: Carbon abatement contracts (5) The Emissions Reduction Fund Register must set out, for each carbon abatement contract that has been entered into: (a) the name of the carbon abatement contractor; and (b) the duration of the contract; and (c) the name of the eligible offsets project for which the carbon abatement contractor is a project proponent; and (d) the number of eligible carbon credit units that the carbon abatement contractor has contracted to sell to the Commonwealth under the contract; and (e) the number of eligible carbon credit units that the carbon abatement contractor has sold to the Commonwealth under the contract. 12 Subsection 169(1) Omit "Register of Offsets Projects" (wherever occurring), substitute "Emissions Reduction Fund Register". 13 Section 240 (table item 21) Omit "Register of Offsets Projects", substitute "Emissions Reduction Fund Register". 13A Section 297 After "this Act", insert "(other than section 20D or 20E)". 14 At the end of the Act Add: 308 Legislative rules The Minister may, by legislative instrument, make rules (legislative rules) prescribing matters: (a) required or permitted by this Act to be prescribed by the legislative rules; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. Division 2—Transitional provisions 15 Transitional—Emissions Reduction Fund Register (1) The Register that was: (a) kept under section 167 of the Carbon Credits (Carbon Farming Initiative) Act 2011; and (b) known before the commencement of this item as the Register of Offsets Projects; continues in existence, after the commencement of this item, under the name Emissions Reduction Fund Register so that its identity is not affected. (2) In any of the following: (a) a law of the Commonwealth (other than this Part); (b) an instrument made under a law of the Commonwealth; (c) a contract or agreement; (d) any pleading in, or process issued in connection with, any legal or other proceedings; (e) any other instrument; a reference to the Register of Offsets Projects must, except in relation to matters that occurred before the commencement of this item, be construed as a reference to the Emissions Reduction Fund Register. Part 2—Other amendments Division 1—Amendments Australian National Registry of Emissions Units Act 2011 17 Section 38 Repeal the section. 18 Paragraph 39(2)(b) Omit "account; or", substitute "account.". 19 Paragraph 39(2)(c) Repeal the paragraph. 21 Subsections 41(4) and (5) Repeal the subsections. Carbon Credits (Carbon Farming Initiative) Act 2011 23 Section 4 Omit: • A methodology determination must comply with the offsets integrity standards set out in this Act. substitute: • A methodology determination is made having regard to the offsets integrity standards set out in this Act. 24 Section 5 Insert: 100‑year permanence period, in relation to an eligible offsets project, has the meaning given by section 87. 100‑year permanence period project has the meaning given by paragraph 27(3)(e). 25‑year permanence period project has the meaning given by paragraph 27(3)(f). 25 Section 5 (definitions of additionality test and additionality test regulations) Repeal the definitions. 26 Section 5 (definition of applicable carbon sequestration right) Omit "an offsets project", substitute "a sequestration offsets project". 27 Section 5 Insert: area‑based emissions avoidance project has the meaning given by section 53A. area‑based offsets project means an offsets project that is: (a) a sequestration offsets project; or (b) an area‑based emissions avoidance project. 28 Section 5 (after paragraph (a) of the definition of associated provisions) Insert: (aa) the provisions of the legislative rules; 29 Section 5 (at the end of paragraph (b) of the definition of associated provisions) Add: ; or (iii) the legislative rules. 30 Section 5 (after paragraph (a) of the definition of audit team leader) Insert: (aa) paragraph 13(1)(ea); (ab) paragraph 13(1)(eb); 31 Section 5 (after paragraph (c) of the definition of audit team leader) Insert: (ca) paragraph 76(4)(ca); (cb) paragraph 76(4)(cb); 32 Section 5 (definition of baseline) Repeal the definition. 33 Section 5 (definition of Biodiversity Convention) Repeal the definition. 34 Section 5 (definition of carbon dioxide equivalence) Repeal the definition. 35 Section 5 Insert: carbon dioxide equivalent, of an amount of greenhouse gas, means the carbon dioxide equivalence (within the meaning of the National Greenhouse and Energy Reporting Act 2007) of the amount of the gas. 36 Section 5 (definition of certified emission reduction) Repeal the definition. 37 Section 5 (definition of commitment period) Repeal the definition. 37A Section 5 Insert: Commonwealth place has the same meaning as in the Commonwealth Places (Application of Laws) Act 1970. constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies. 38 Section 5 (definition of crediting period) Repeal the definition, substitute: crediting period, in relation to an eligible offsets project, means: (a) the crediting period for the project worked out under section 69 or 71; or (b) a crediting period for the project worked out under section 70. Note: Sections 70 and 71 deal with transitional matters. 38A Section 5 Insert: crediting period extension review has the meaning given by section 255A. designated savanna project means a project to avoid the emission of methane or nitrous oxide from the burning of savannas. 39 Section 5 (definitions of Domestic Offsets Integrity Committee and Domestic Offsets Integrity Committee member) Repeal the definitions. 40 Section 5 Insert: eligible carbon abatement from an offsets project means carbon abatement that: (a) results from the carrying out of the project; and (b) is able to be used to meet Australia's climate change targets under: (i) the Kyoto Protocol; or (ii) an international agreement (if any) that is the successor (whether immediate or otherwise) to the Kyoto Protocol. For the purposes of the application of the definition of Kyoto Protocol to subparagraph (b)(i), if the Doha Amendment is not in force for Australia, the Doha Amendment is taken to be in force for Australia. 40A Section 5 (definition of eligible interest) After "section", insert "43,". 42 Section 5 (definitions of eligible Kyoto project and eligible non‑Kyoto project) Repeal the definitions. 43 Section 5 (definition of eligible offsets project) Omit "paragraph 27(2)(a) or (b)", substitute "subsection 27(2)". 43A Section 5 (definition of eligible voluntary action) Omit "or the regulations", substitute ", the regulations or the legislative rules". 44 Section 5 (definition of emission reduction unit) Repeal the definition. 45 Section 5 Insert: Emissions Reduction Assurance Committee means the committee continued in existence by section 254. Emissions Reduction Assurance Committee member means a member of the Emissions Reduction Assurance Committee, and includes the Chair of the Emissions Reduction Assurance Committee. 46 Section 5 (paragraph (h) of the definition of entrusted public official) Omit "a Domestic Offsets Integrity Committee", substitute "an Emissions Reduction Assurance Committee". 47 Section 5 (paragraph (i) of the definition of entrusted public official) Omit "Domestic Offsets Integrity Committee", substitute "Emissions Reduction Assurance Committee". 48 Section 5 Insert: extended accounting period has the meaning given by section 7A. fit and proper person test has the meaning given by section 60. 48A Section 5 (definition of general law land) Repeal the definition. 49 Section 5 (definition of Interim Domestic Offsets Integrity Committee) Repeal the definition. 50 Section 5 (definitions of introduced animal and introduced animal emissions avoidance project) Repeal the definitions. 50A Section 5 (definition of Kyoto Australian carbon credit unit) Repeal the definition, substitute: Kyoto Australian carbon credit unit means: (a) an Australian carbon credit unit that: (i) was issued in accordance with subsection 11(2) after the commencement of this definition; and (ii) is, or is to be, identified as a Kyoto Australian carbon credit unit within the Registry; or (b) an Australian carbon credit unit that: (i) was issued before the commencement of this definition; and (ii) was a Kyoto Australian carbon credit unit (within the meaning of this Act as it stood before the commencement of this definition). 51 Section 5 (definition of Kyoto offsets project) Repeal the definition. 51A Section 5 (definition of Kyoto unit) Repeal the definition. 51B Section 5 (definition of land rights holder) Repeal the definition. 52 Section 5 (definition of long‑term certified emission reduction) Repeal the definition. 53 Section 5 (definition of maximum potential relinquishment period) Repeal the definition. 54 Section 5 (definition of National Inventory Report) Repeal the definition. 55 Section 5 (definitions of native forest and native forest protection project) Repeal the definitions. 55A Section 5 Insert: no double counting test has the meaning given by section 15A. 56 Section 5 (definition of non‑Kyoto offsets project) Repeal the definition. 57 Section 5 Insert: permanence period, in relation to an eligible offsets project, has the meaning given by section 86A. 58 Section 5 (definition of prescribed native forest protection project) Repeal the definition. 59 Section 5 (definition of prescribed non‑CFI offsets scheme) Repeal the definition. 60 Section 5 (definition of project area) Omit "an offsets project", substitute "an area‑based offsets project". 60A Section 5 (definition of project proponent) Repeal the definition, substitute: project proponent, in relation to an offsets project, means the person who: (a) is responsible for carrying out the project; and (b) has the legal right to carry out the project. Note 1: See also section 46 (registered native title bodies corporate). Note 2: See also section 135 (multiple project proponents). 61 Section 5 (definition of protected DOIC information) Repeal the definition. 62 Section 5 Insert: protected ERAC information means protected information that was obtained by a person in the person's capacity as: (a) an Emissions Reduction Assurance Committee member; or (b) a person assisting the Emissions Reduction Assurance Committee under section 269. 63 Section 5 (definitions of recognised and recognised offsets entity) Repeal the definitions. 64 Section 5 (definition of regional natural resource management organisation) Repeal the definition. 66 Section 5 (paragraph (a) of the definition of relevant land registration official) Omit "a project", substitute "an area‑based offsets project". 67 Section 5 (definition of removal unit) Repeal the definition. 68 Section 5 (definition of temporary certified emission reduction) Repeal the definition. 68A Section 5 (definition of transfer) Repeal the definition, substitute: transfer, in relation to an Australian carbon credit unit, has the meaning given by section 151. 69 Section 5 Insert: United Nations Convention on the Law of the Sea means the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982. Note: The Convention is in Australian Treaty Series 1994 No. 31 ([1994] ATS 31) and could in 2014 be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au). 70 Section 5 (definition of vacancy) Omit "a Domestic Offsets Integrity Committee", substitute "an Emissions Reduction Assurance Committee". 71 Section 5 (definition of voluntary automatic unit cancellation regime) Repeal the definition. 72 Section 6 (heading) Repeal the heading, substitute: 6 Vacancy in the office of an Emissions Reduction Assurance Committee member 73 Paragraph 6(a) Omit "a Domestic Offsets Integrity Committee", substitute "an Emissions Reduction Assurance Committee". 74 Section 6 Omit "the Domestic Offsets Integrity Committee" (wherever occurring), substitute "the Emissions Reduction Assurance Committee". 74A After section 7 Insert: 7A Extended accounting period (1) For the purposes of this Act, if an eligible offsets project is an emissions avoidance offsets project of a kind specified in the legislative rules, the extended accounting period for the project is the period: (a) beginning immediately after the end of the crediting period, or the last of the crediting periods, for the project; and (b) ending at a time ascertained in accordance with the legislative rules. (2) Subsection (1) does not, by implication, affect the application of subsection 13(3) of the Legislative Instruments Act 2003 to another instrument under this Act. 75 At the end of Part 1 Add: 9A Extension to exclusive economic zone and continental shelf (1) This Act extends to a matter relating to the exercise of Australia's sovereign rights in the exclusive economic zone or the continental shelf. (2) For the purposes of subsection (1), a reference in paragraph 27(4)(a) to Australia is to be read as if it included a reference to the exclusive economic zone and the continental shelf. 9B Application to foreign ships This Act does not apply to the extent that its application would be inconsistent with the exercise of rights of foreign ships in: (a) the territorial sea; or (b) the exclusive economic zone; or (c) waters of the continental shelf; in accordance with the United Nations Convention on the Law of the Sea. 76 Section 10 Omit: • The number of Australian carbon credit units issued will be worked out by reference to: (a) the relevant abatement amount calculated under the applicable methodology determination; or (b) if the project is a native forest protection project—the relevant sequestration amount calculated under the applicable methodology determination. • For sequestration offsets projects, a risk of reversal buffer applies. substitute: • The number of Australian carbon credit units issued will be worked out by reference to the relevant abatement amount calculated under the applicable methodology determination. • For sequestration offsets projects, a risk of reversal buffer and permanence period discount apply. 77 Subsections 11(2), (3) and (4) Repeal the subsections, substitute: Issue of units (2) If the project has resulted in eligible carbon abatement, the Regulator must, as soon as practicable after the day on which the certificate was issued, issue to the holder of the certificate a number of Kyoto Australian carbon credit units equal to the number specified in the certificate as the unit entitlement for that certificate. (3) If the project has not resulted in eligible carbon abatement, the Regulator must, as soon as practicable after the day on which the certificate was issued, issue to the holder of the certificate a number of non‑Kyoto Australian carbon credit units equal to the number specified in the certificate as the unit entitlement for that certificate. 78 Subsections 11(5) and (6) Omit ", (3) or (4)", substitute "or (3)". 79 Paragraph 13(1)(e) Repeal the paragraph, substitute: (e) if, under the legislative rules, the application is subject to audit under this Act—be accompanied by an audit report that is: (i) prescribed by the legislative rules; and (ii) prepared by a registered greenhouse and energy auditor who has been appointed as an audit team leader for the purpose; and (ea) if: (i) under the legislative rules, a set of 2 or more applications made by the applicant is subject to audit under this Act; and (ii) the application is included in that set; be accompanied by an audit report that is: (iii) prescribed by the legislative rules; and (iv) prepared by a registered greenhouse and energy auditor who has been appointed as an audit team leader for the purpose; and (eb) if, before the application was given to the Regulator, the Regulator gave the applicant a written notice stating that the application would be subject to audit under this Act—be accompanied by an audit report that is: (i) prescribed by the legislative rules; and (ii) prepared by a registered greenhouse and energy auditor who has been appointed as an audit team leader for the purpose; and (ec) if a notice under section 77A is relevant to the application—be accompanied by a copy of that notice; and 80 Subsections 13(2) and (3) Repeal the subsections, substitute: (2) The Regulator must not give a notice under paragraph (1)(eb) unless the Regulator is satisfied that it is appropriate to do so, having regard to effective risk management. 81 Paragraph 15(2)(a) Omit "is a recognised offsets entity", substitute "passes the fit and proper person test". 82 Paragraph 15(2)(c) Before "the reporting period", insert "if the project does not have an extended accounting period—". 83 Paragraph 15(2)(d) Repeal the paragraph, substitute: (ca) if the project has an extended accounting period—the reporting period is included in: (i) a crediting period for the project; or (ii) the extended accounting period; and (d) the application passes the no double counting test; and 83A After paragraph 15(2)(e) Insert: (ea) if the relevant section 27 declaration is subject to a condition mentioned in subsection 28A(2)—that condition has been met; and 84 Subsection 15(2) (note) Repeal the note, substitute: Note 1: For the fit and proper person test, see section 60. Note 2: For the no double counting test, see section 15A. 85 Subsection 15(3) (note) Omit ", 17". 85A After section 15 Insert: 15A No double counting test For the purposes of this Act, an application under section 12 passes the no double counting test if, assuming that a certificate of entitlement were to be issued in respect of the relevant eligible offsets project as a result of the application, none of the carbon abatement that would be reflected in the unit entitlement for the certificate has been reflected in: (a) the unit entitlement for another certificate of entitlement issued in respect of the project; or (b) the unit entitlement for a certificate of entitlement issued in respect of another eligible offsets project. Note: For unit entitlement, see section 16 or 18. 86 Section 16 (heading) Repeal the heading, substitute: 16 Unit entitlement—sequestration offsets projects 87 Subsection 16(1) Omit "other than a native forest protection project". 88 Subsection 16(2) (formula) Repeal the formula, substitute: 89 Subsection 16(2) Insert: permanence period discount number means: (a) if the project is a 100‑year permanence period project—zero; or (b) if the project is a 25‑year permanence period project and paragraph (c) does not apply—20% of the net abatement number; or (c) if: (i) the project is a 25‑year permanence period project; and (ii) at the start of the crediting period in which the reporting period is included, another percentage is specified in the legislative rules in relation to a particular kind of project; and (iii) the project is of that kind; that other percentage of the net abatement number. 90 Subsection 16(2) (subparagraph (b)(i) of the definition of risk of reversal buffer number) Omit "the regulations", substitute "the legislative rules". 91 Subsection 16(2A) Repeal the subsection. 92 Section 17 Repeal the section. 93 Subsection 18(3) Repeal the subsection. 94 Section 19 Repeal the section. 94A Subsection 22(1) Omit "(1)". 94B Subsection 22(2) Repeal the subsection. 95 Paragraph 23(1)(e) Repeal the paragraph. 96 Paragraph 23(1)(g) Repeal the paragraph, substitute: (g) if the project is a sequestration offsets project—include either: (i) a request that the project be treated as a 100‑year permanence period project; or (ii) a request that the project be treated as a 25‑year permanence period project; and 96A Before paragraph 23(1)(h) Insert: (ga) if: (i) the project is an area‑based offsets project; and (ii) the project area, or any of the project areas, for the project is covered by a regional natural resource management plan; be accompanied by a statement about whether the project is consistent with the plan; and 97 Subsection 23(4) Repeal the subsection. 98 Subsection 26(1) (note) Repeal the note. 99 Subsection 27(2) Repeal the subsection, substitute: Declaration (2) After considering the application, the Regulator may, by writing, declare that the offsets project is an eligible offsets project for the purposes of this Act. 100 Paragraph 27(3)(b) Before "identify", insert "if the project is an area‑based offsets project—". 101 After paragraph 27(3)(c) Insert: (ca) identify the applicable methodology determination for the project; and (cb) identify the crediting period or periods for the project; and 102 Paragraph 27(3)(e) Repeal the paragraph, substitute: (e) if: (i) the project is a sequestration offsets project; and (ii) the application included a request that the project be treated as a 100‑year permanence period project; declare that the project is a 100‑year permanence period project; and (f) if: (i) the project is a sequestration offsets project; and (ii) the application included a request that the project be treated as a 25‑year permanence period project; declare that the project is a 25‑year permanence period project. 103 Paragraph 27(4)(d) Repeal the paragraph, substitute: (d) the project meets the additionality requirements set out in subsection (4A) of this section; and 104 Paragraph 27(4)(f) Omit "is a recognised offsets entity", substitute "passes the fit and proper person test". 105 Paragraphs 27(4)(h), (i), (j) and (k) Repeal the paragraphs. 106 Subsection 27(4) (note 2) Repeal the note, substitute: Note 2: For the fit and proper person test, see section 60. 107 After subsection 27(4) Insert: (4A) The additionality requirements mentioned in paragraph (4)(d) are: (a) either: (i) the requirement (the newness requirement) that the project has not begun to be implemented; or (ii) if the methodology determination that covers the project specifies, for the purposes of this subparagraph, one or more requirements that are expressed to be in lieu of the newness requirement—those requirements; and (b) either: (i) the requirement (the regulatory additionality requirement) that the project is not required to be carried out by or under a law of the Commonwealth, a State or a Territory; or (ii) if the methodology determination that covers the project specifies, for the purposes of this subparagraph, one or more requirements that are expressed to be in lieu of the regulatory additionality requirement—those requirements; and (c) either: (i) the requirement (the government program requirement) that the project would be unlikely to be carried out under another Commonwealth, State or Territory government program or scheme in the absence of a declaration of the project as an eligible offsets project; or (ii) if the legislative rules specify, for the purposes of this subparagraph, one or more requirements that are expressed to be in lieu of the government program requirement—those requirements. (4B) For the purposes of subparagraph (4A)(a)(i), in determining whether the project has begun to be implemented, disregard any of the following activities that have been, or are being, undertaken in relation to the project: (a) conducting a feasibility study for the project; (b) planning or designing the project; (c) obtaining regulatory approvals for the project; (d) obtaining consents relating to the project; (e) obtaining advice relating to the project; (f) conducting negotiations relating to the project; (g) sampling to establish a baseline for the project; (h) an activity specified in the legislative rules; (i) an activity that is ancillary or incidental to any of the above activities. (4C) For the purposes of subparagraph (4A)(a)(i), the following are examples of when a project has begun to be implemented: (a) making a final investment decision in relation to the project; (b) acquiring or leasing a tangible asset (other than land) that is for use wholly or mainly for the purposes of the project; (c) commencing construction work for the purposes of the project; (d) in the case of a sequestration offsets project—preparing soil for seeding or planting that is for the purposes of the project; (e) in the case of a sequestration offsets project—seeding, planting or fertilising plants that are for the purposes of the project; (f) in the case of a sequestration offsets project—installing an irrigation or drainage system for the purposes of the project. (4D) For the purposes of paragraph (4C)(a), final investment decision has the meaning generally accepted within the corporate finance community. (4E) For the purposes of paragraph (4C)(b), disregard an asset that is a minor asset. 108 Subsections 27(6), (7), (8) and (9) Repeal the subsections. 109 Subsection 27(10) Repeal the subsection, substitute: (10) The Regulator must not make a declaration under subsection (2) if: (a) the project is an area‑based offsets project; and (b) the project area is, or any of the project areas are, to any extent subject to a carbon maintenance obligation. 110 After paragraph 27(11)(a) Insert: (aa) the new project is an area‑based offsets project; and 111 Subsections 27(12) and (13) Repeal the subsections. 112 Paragraph 27(14)(b) Repeal the paragraph. 113 Subsections 27(15) and (16) Repeal the subsections, substitute: When a declaration takes effect (15) A declaration under subsection (2) takes effect when it is made. 114 Subsection 27(19) Repeal the subsection. 114A After section 27 Insert: 27A Suspension of processing of applications for declarations of eligible offsets projects Order (1) The Emissions Reduction Assurance Committee may, by legislative instrument, order that, if: (a) an application is made under section 22 during a specified period; and (b) the application relates to an offsets project that is covered by a specified methodology determination; the Regulator must not: (c) consider the application during that period; or (d) make a decision on the application during that period. (2) A period specified in an order under subsection (1): (a) must start at the commencement of the order; and (b) must not be longer than 12 months. (3) The Emissions Reduction Assurance Committee must not make an order under subsection (1) that relates to a methodology determination unless the Committee is satisfied that there is reasonable evidence that the methodology determination does not comply with one or more of the offsets integrity standards. (4) Before making an order under subsection (1), the Emissions Reduction Assurance Committee must inform the Minister of the Committee's proposal to make the order. Compliance with order (5) The Regulator must comply with an order under subsection (1). Timing of decision on application (6) If an application made under section 22 is or was covered by an order under subsection (1) of this section, subsection 27(14) does not apply to the application. Note: Subsection 27(14) deals with the timing of decisions on applications. 115 At the end of Division 2 of Part 3 Add: 28A Declaration may be subject to condition about obtaining consents from eligible interest holders Scope (1) This section applies if: (a) an application under section 22 has been made for a declaration of an offsets project as an eligible offsets project; and (b) the Regulator makes a declaration under section 27 in relation to the project; and (c) the Regulator is satisfied that there are one or more persons (the relevant interest‑holders) who: (i) hold an eligible interest in the project area, or any of the project areas, for the project; and (ii) have not consented, in writing, to the making of the application. Condition (2) The Regulator must specify in the declaration that the declaration is subject to the condition that the written consent of each relevant interest‑holder to the existence of the declaration must be obtained before the end of the first reporting period for the project. Consents (3) A consent mentioned in subparagraph (1)(c)(ii) or subsection (2) must be in a form approved, in writing, by the Regulator. (4) A consent mentioned in subparagraph (1)(c)(ii) or subsection (2) may be set out in a registered indigenous land use agreement. (5) Subsection (3) does not apply to a consent mentioned in subparagraph (1)(c)(ii) or subsection (2) if the consent is set out in a registered indigenous land use agreement. Registered indigenous land use agreements (6) If: (a) the declaration is in force; and (b) a consent mentioned in subparagraph (1)(c)(ii) or subsection (2) of this section was set out in a registered indigenous land use agreement; details of the agreement must not be removed from the Register of Indigenous Land Use Agreements under subparagraph 199C(1)(c)(ii) of the Native Title Act 1993 without the written consent of the Regulator. 116 Subsection 29(1) Omit "an offsets project", substitute "an area‑based offsets project". 117 Paragraph 29(3)(h) Repeal the paragraph. 118 Subsection 29(9) Omit "or the regulations", substitute ", the regulations or the legislative rules". 119 Subsection 30(10) Omit "or the regulations", substitute ", the regulations or the legislative rules". 119A Section 31 (heading) Repeal the heading, substitute: 31 Voluntary variation of conditional declaration of eligible offsets project—condition of declaration has been met 119B Subsection 31(1) Omit "that all regulatory approvals must be obtained for the project before the end of the first reporting period for the project", substitute "mentioned in subsection 28(2) or 28A(2)". 120 Subsection 31(9) Omit "or the regulations", substitute ", the regulations or the legislative rules". 121 At the end of Division 3 of Part 3 Add: 31A No variation of declaration of eligible offsets project as a 100‑year or 25‑year permanence period project Scope (1) This section applies to a declaration under section 27 in relation to an offsets project if the declaration: (a) declares that the project is a 100‑year permanence period project; or (b) declares that the project is a 25‑year permanence period project. Regulator must not vary permanence period (2) The Regulator must not: (a) if paragraph (1)(a) applies—vary the declaration to declare that the project is a 25‑year permanence period project; or (b) if paragraph (1)(b) applies—vary the declaration to declare that the project is a 100‑year permanence period project. 122 Paragraphs 32(2)(c) and (d) Repeal the paragraphs, substitute: (c) if the project is a sequestration offsets project: (i) before the application was made, the applicant voluntarily relinquished a number of Australian carbon credit units in order to satisfy a condition for the revocation of the declaration; and (ii) the number of relinquished units equals the net total number of Australian carbon credit units issued in relation to the project in accordance with Part 2. 123 Subsection 32(2) (notes 1 and 2) Repeal the notes. 123A Section 34 (heading) Repeal the heading, substitute: 34 Unilateral revocation of declaration of eligible offsets project—condition of declaration has not been met 123B Paragraph 34(2)(a) Repeal the paragraph, substitute: (a) the declaration is subject to a condition mentioned in subsection 28(2) or 28A(2); and 124 Section 36 (heading) Repeal the heading, substitute: 36 Unilateral revocation of declaration of eligible offsets project—project proponent ceases to pass the fit and proper person test 125 Paragraph 36(2)(a) Omit "to be a recognised offsets entity", substitute "to pass the fit and proper person test". 126 Paragraph 36(2)(b) Omit "is not a recognised offsets entity", substitute "does not pass the fit and proper person test". 127 At the end of subsection 36(2) Add: Note: For the fit and proper person test, see section 60. 128 Subparagraph 37(2)(b)(ii) Repeal the subparagraph substitute: (ii) a person who passes the fit and proper person test. 129 At the end of subsection 37(2) Add: Note: For the fit and proper person test, see section 60. 130 Division 6 of Part 3 Repeal the Division. 130A Division 8 of Part 3 (heading) Repeal the heading, substitute: Division 8—Eligible interest in an area of land 130B Section 43 (heading) Repeal the heading, substitute: 43 Eligible interest in an area of land—applicable carbon sequestration right 130C Before subsection 43(1) Insert: Eligible interest (1A) For the purposes of this Act, if a person holds the applicable carbon sequestration right in relation to a project area of a sequestration offsets project, the applicable carbon sequestration right is an eligible interest held by the person in the project area. 130D Subsection 43(7) Omit "this Act", substitute "the application of this Act to a sequestration offsets project". 130E Before paragraph 43(7)(a) Insert: (aa) an area of land is a project area for the project; and 130F Paragraph 43(7)(a) Omit "an", substitute "the". 131 Subsection 43(7) Before "carbon sequestration right", insert "applicable". 131AA Subsection 43(7) Omit "the land", substitute "the project area". 131A Division 9 of Part 3 (heading) Repeal the heading. 132 Subsection 46(1) Omit "an offsets project", substitute "an area‑based offsets project". 133 Paragraph 46(1)(f) Omit "project; and", substitute "project.". 134 Paragraph 46(1)(g) Repeal the paragraph. 135 Subsection 46(1) (note) Repeal the note. 136 Subsection 46(2) Omit "an offsets project", substitute "an area‑based offsets project". 137 Paragraph 46(2)(g) Omit "project; and", substitute "project.". 138 Paragraph 46(2)(h) Repeal the paragraph. 139 Subsection 46(2) (note) Repeal the note. 140 Paragraph 47(1)(a) Omit "an offsets project", substitute "an area‑based offsets project". 141 At the end of subsection 50(1) Add ", so long as the project is an area‑based offsets project". 142 Paragraph 52(1)(a) Omit "an offsets project", substitute "an area‑based offsets project". 143 Paragraphs 53(1)(c) and (d) Repeal the paragraphs, substitute: (c) any other project to avoid emissions of greenhouse gases. 144 Subsection 53(2) Repeal the subsection, substitute: (2) Paragraphs (1)(a) and (b) do not limit paragraph (1)(c). 145 After section 53 Insert: 53A Area‑based emissions avoidance projects (1) For the purposes of this Act, an emissions avoidance offsets project is an area‑based emissions avoidance project if it is a project of a kind specified in the legislative rules. (2) Subsection (1) does not, by implication, affect the application of subsection 13(3) of the Legislative Instruments Act 2003 to another instrument under this Act. 146 Section 55 Repeal the section. 146A Paragraph 56(2)(e) Omit "production;", substitute "production.". 146B Subsection 56(2) Omit "in, or in the vicinity of, the project area, or any of the project areas, for that kind of project.". 147 Paragraph 57(1)(a) Repeal the paragraph, substitute: (a) as the result of the variation or revocation of a section 27 declaration, an area of land (the relevant area) ceases to be, or ceases to be part of, the project area, or any of the project areas, for an eligible offsets project that is a sequestration offsets project; and 148 Paragraph 57(1)(b) Repeal the paragraph, substitute: (b) as a result of the making or variation of another section 27 declaration, the relevant area becomes, or becomes part of, the project area, or any of the project areas, for another eligible offsets project that is a sequestration offsets project; 149A Subsection 57(8) After "purposes", insert "of". 150 Section 58 Repeal the section. 151 Part 4 Repeal the Part, substitute: Part 4—Fit and proper person test 59 Simplified outline of this Part • A person passes the fit and proper person test if: (a) the person is a fit and proper person; and (b) the person is not an insolvent under administration; and (c) the person is not an externally‑administered body corporate. 60 Fit and proper person test Individual (1) For the purposes of this Act, an individual passes the fit and proper person test if: (a) the individual is a fit and proper person, having regard to: (i) whether any of the events specified in the legislative rules have happened in relation to the individual; and (ii) such other matters (if any) as are specified in the legislative rules; and (b) the individual is not an insolvent under administration. Body corporate (2) For the purposes of this Act, a body corporate passes the fit and proper person test if: (a) the body corporate is a fit and proper person, having regard to: (i) whether any of the events specified in the legislative rules have happened in relation to the body corporate; and (ii) whether any of the events specified in the legislative rules have happened in relation to an executive officer of the body corporate; and (iii) such other matters (if any) as are specified in the legislative rules; and (b) the body corporate is not an externally‑administered body corporate. Spent convictions (3) Legislative rules made for the purposes of subparagraph (1)(a)(i) or (ii) or (2)(a)(i), (ii) or (iii) must not affect the operation of Part VIIC of the Crimes Act 1914. Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them. 152 Part 5 Repeal the Part, substitute: Part 5—Crediting period 68 Simplified outline of this Part • Generally, the crediting period for an eligible offsets project is: (a) 25 years for a sequestration offsets project; or (b) 7 years for an emissions avoidance offsets project. • However, the applicable methodology determination for the project may specify a different crediting period. • An eligible offsets project cannot have more than one crediting period. • However, transitional rules apply if a project was an eligible offsets project immediately before the commencement of this Part. Note: Under section 15, the general rule is that the Regulator may only issue a certificate of entitlement to Australian carbon credit units in relation to a reporting period for an eligible offsets project if the reporting period is included in a crediting period for the project. 69 Crediting period—basic rule Scope (1) This section applies to an eligible offsets project if the project became an eligible offsets project after the commencement of this Part. Sequestration offsets project or designated savanna project (2) If the project is a sequestration offsets project or a designated savanna project, then, for the purposes of this Act, the crediting period for the project is: (a) the period of 25 years; or (b) if another period is specified in the applicable methodology determination for the project—that other period; that began at the start time worked out under subsection (4). Emissions avoidance offsets project (3) If the project is an emissions avoidance offsets project (other than a designated savanna project), then, for the purposes of this Act, the crediting period for the project is: (a) the period of 7 years; or (b) if another period is specified in the applicable methodology determination for the project—that other period; that began at the start time worked out under subsection (4). Start time (4) For the purposes of this section, the start time is: (a) if: (i) the application for the declaration of the project under section 27 included a statement to the effect that the crediting period for the project should begin at a specified time; and (ii) the specified time occurs after the declaration takes effect; and (iii) the specified time complies with subsection (5); and (iv) the specified time was not varied under paragraph (b); the specified time; or (b) if: (i) the application for the declaration of the project under section 27 included a statement to the effect that the crediting period for the project should begin at a specified time; and (ii) after the project became an eligible offsets project, the project proponent, by written notice given to the Regulator, varied the specified time; and (iii) the varied time complies with subsection (5); and (iv) the project proponent has not previously varied the specified time; and (v) the notice was given at or before the time when the offsets report for the project was given under subsection 76(1); the varied time; or (c) otherwise—the time when the declaration of the project under section 27 took effect. Limit on deferral of start of crediting period (5) A time complies with this subsection if: (a) the time is not later than 18 months after the declaration of the project under section 27 took effect; or (b) if: (i) another number of months is specified in the legislative rules in relation to a particular kind of project; and (ii) the project is of that kind; the time is not later than that other number of months after the declaration of the project under section 27 took effect. No subsequent crediting periods (6) The project cannot have more than one crediting period. Other matters (7) A notice under subparagraph (4)(b)(ii) may be included in the offsets report for the project given under subsection 76(1). (8) Paragraph (5)(b) does not, by implication, affect the application of subsection 13(3) of the Legislative Instruments Act 2003 to another instrument under this Act. 70 Crediting period—general transitional rule Scope (1) This section applies to an eligible offsets project if: (a) the project was an eligible offsets project immediately before the commencement of this Part; and (b) the project is not covered by the Carbon Credits (Carbon Farming Initiative) (Avoided Deforestation) Methodology Determination 2013. Project has 2 crediting periods (2) If the project is a sequestration offsets project, then, for the purposes of this Act, the project has 2 crediting periods, as follows: (a) the first crediting period for the project is the period: (i) beginning when the declaration of the project under section 27 took effect; and (ii) ending immediately before the commencement of this Part; (b) the second crediting period for the project is: (i) the period of 25 years; or (ii) if another period is specified in the applicable methodology determination for the project—that other period; that began at the commencement of this Part. (3) If: (a) the project is an emissions avoidance offsets project; and (b) the project is not a designated savanna project; then, for the purposes of this Act, the project has 2 crediting periods, as follows: (c) the first crediting period for the project is the period: (i) beginning when the declaration of the project under section 27 took effect; and (ii) ending immediately before the commencement of this Part; (d) the second crediting period for the project is: (i) the period of 7 years; or (ii) if another period is specified in the applicable methodology determination for the project—that other period; that began at the commencement of this Part. (4) If: (a) the project is an emissions avoidance offsets project; and (b) the project is a designated savanna project; then, for the purposes of this Act, the project has 2 crediting periods, as follows: (c) the first crediting period for the project is the period: (i) beginning when the declaration of the project under section 27 took effect; and (ii) ending immediately before 1 January next following the commencement of this Part; (d) the second crediting period for the project is: (i) the period of 25 years; or (ii) if another period is specified in the applicable methodology determination for the project—that other period; that began at the start of 1 January next following the commencement of this Part. No subsequent crediting periods (5) The project cannot have more than 2 crediting periods. 71 Crediting period—transitional rule for avoided deforestation projects Scope (1) This section applies to an eligible offsets project if: (a) either: (i) the project was an eligible offsets project immediately before the commencement of this Part; or (ii) the project became an eligible offsets project after the commencement of this Part as the result of an ERF transitional application (within the meaning of Division 2 of Part 2 of Schedule 1 to the Carbon Farming Initiative Amendment Act 2014); and (b) the project is covered by the Carbon Credits (Carbon Farming Initiative) (Avoided Deforestation) Methodology Determination 2013. Crediting period (2) Despite any other provision of this Part, the crediting period for the project is: (a) the first crediting period for the project worked out under section 69 as it stood immediately before the commencement of this Part; or (b) if another period is specified in the applicable methodology determination for the project—that other period that began when the declaration of the project under section 27 took effect. No subsequent crediting periods (3) The project cannot have more than one crediting period. 153 Section 75 Omit: • The first reporting period must begin when the declaration of the project under section 27 took effect. • Each subsequent reporting period must begin immediately after the end of the previous reporting period. • A reporting period must not be: (a) shorter than 12 months; or (b) longer than 5 years. substitute: • The first reporting period must begin at the start of the crediting period for the project. • Each subsequent reporting period must begin immediately after the end of the previous reporting period. • A reporting period for a sequestration offsets project must not be: (a) shorter than 6 months (or such lesser number of months as is specified in the legislative rules); or (b) longer than 5 years. • A reporting period for an emissions avoidance offsets project must not be: (a) shorter than 6 months (or such lesser number of months as is specified in the legislative rules); or (b) longer than 2 years. 154 Paragraphs 76(1)(b), (c) and (d) Repeal the paragraphs, substitute: (b) begins: (i) if the project has a single crediting period—at the start of that crediting period; or (ii) if the project has