Helping you to understand the ACCU Scheme audit process
Audits are a key component of ensuring integrity and accuracy in carbon projects, but despite their importance, they are one of the more misunderstood aspects of carbon farming. In this article, we’ll work through all the audit information you need to know before going ahead with a project.
What is an audit?
In the ACCU (Australian Carbon Credit Units) Scheme, an audit involves an examination of project information by an independent third-party. This is designed to provide assurance that the information presented by the project proponent (the person starting the project) is accurate.
Who can conduct an audit?
Audits must be conducted by an auditor that is:
- Third-party – i.e. not the Clean Energy Regulator (CER) or the proponent
- Independent – has no financial relationship or conflict of interest to the project
- Qualified – be a registered category 2 greenhouse and energy auditor. A list of qualified auditors under the ACCU Scheme is available at the bottom of this article
When do audits take place?
Projects will generally be required to undertake a minimum of three audits across their crediting period. The timing of these will be outlined in the project Audit Schedule – a document issued as part of project approval by the CER. Audit Schedules may differ, but a general outline is as follows:
- Your first offset report will need to be audited. The corresponding audit report must be submitted to the CER alongside the offset report
- A second audit is required for the first offset report you complete after the 8th year of the project. As an example, if you plan to report every three years of your project, this means the third project report (year 9) is audited
- A third audit is required for the first offset report you complete after the 16th year of the project. Using the three-year example above means the sixth project report (year 18) is audited
Is three the maximum number of audits I will have to do?
In some circumstances, you may be required to have additional audits.
- Threshold audits are required when a single project report seeks to claim greater than or equal to 100,000 tonnes of carbon dioxide equivalent (tCO2e). Given the substantial volume of ACCUs that will be issued for a report of this size, the CER seeks additional assurance that the claim is legitimate by mandating an audit of the report; this may coincide with a scheduled audit
- Variance audits may be required where the reported abatement is outside the ‘variance audit threshold’ – meaning it is substantially different for the abatement that was expected for that reporting period
- Compliance audits may be required where the CER believes that the proponent or project has, is, or will breach the ACCU Scheme legislative requirements
Our experience is that these additional audit types are unlikely to occur. However, this relies upon ensuring best practice project implementation and record keeping. The CFF can support proponents to ensure that they and their project do not necessarily cause a variance or compliance audit to be required.
Do audits require a site visit?
In most cases, the initial offset report must involve a site visit by the appointed auditor. This serves to ‘ground-truth’ the project activity and ensure it has been conducted as outlined in the offsets report.
The initial offsets report is the foundation on which future reports build upon. Subsequent audits will generally not require a site visit and instead will consist solely of a desktop audit.
How much does an audit cost?
The cost of an audit can be influenced by a number of factors, including project size, extent, location and complexity. As they require both a site visit and an assessment of the initial establishment detail, the first offsets report will likely be more expensive than subsequent audits.
From our experience, initial audits will generally range in cost from $25,000 to $40,000, and subsequent audits from $15,000 to $30,000 – however we encourage you to gather quotes based on your specific project circumstance.
Key takeaways
- Audits must be conducted by independent third-party auditors
- Most projects will require three audits
- Your first offset report must be accompanied by an audit. Two future offset reports must also be audited, in accordance with your project’s audit schedule
- Your first offset report will require a site visit
- You should ensure audit costs are factored into your project budget
To learn more about the reporting and auditing process you can read our article about preparing your first offsets report or delve in deeper with our offsets report 101 article.
Ready to have a discussion with us? You can speak to our friendly experts here.
Click here to see the list of qualified auditors under the ACCU Scheme.
