Carbon Market - Greenhouse Gas Abatement Scheme (NSW Benchmark Scheme)

What is the New South Wales Benchmark Scheme?

The New South Wales Greenhouse Gas Abatement Scheme ("NSW Benchmark Scheme") commenced on 1 January 2003 and is legislated under the Electricity Supply Act 1995 (NSW). Under the NSW Benchmark Scheme, the New South Wales State Government imposes annual greenhouse gas emission targets on electricity retailers and other participants in the scheme (such as large users of electricity). The annual targets are currently set until the end of 2012.


How does the NSW Benchmark Scheme Work?

The NSW Benchmark Scheme allows the participants to meet their greenhouse gas emission targets by surrendering New South Wales Greenhouse Gas Abatement Certificates ("NGAC = carbon credit"), which are NSW Benchmark Scheme Carbon Credits. Companies (or individuals) which are accredited by the New South Wales State Government can create Carbon Credits by carrying out one of the following abatement activities:

  • The sequestration of carbon dioxide by replanting forests;
  • Low emission generation of electricity;
  • activities resulting in reduced consumption of electricity; and
  • Activities carried out by participants that reduce on-site greenhouse gas emissions not directly related to electricity consumption.

Once a NGAC is created, it is registered on a central register administered and maintained by the New South Wales State Government.

Each March quarter, participants in the NSW Benchmark Scheme must provide the New South Wales Government with a greenhouse gas emission statement for the previous calendar year. This statement must contain the number of tonnes of CO2 equivalent that the participant has emitted during the year, and the number of NGACs that the participant will surrender in order to meet its target for that calendar year.

If a participant does not have enough NGACs to meet its annual greenhouse gas emission target, a penalty is imposed.


What is CO2 Australia's Role in the NSW Benchmark Scheme?

CO2 Australia is accredited to create NGACs under the NSW Benchmark Scheme via the sequestration of carbon dioxide by planted forests. CO2 Australia then sells these NGACs to companies which have a liability under the NSW Benchmark Scheme.


Proposed Scheme Extension

Early in 2006, the NSW Government stated its commitment to extending the Greenhouse Gas Abatement Scheme until 2020 with automatic 15 year rollovers. The policy commitment includes setting more stringent targets with the aim to reduce 1990 emission levels by 60 per cent by 2050.