About aggregation
Aggregation is when you bring multiple sources of carbon abatement together. Aggregation can make smaller projects more financially viable, provide more flexibility and help manage performance risk.
It enables smaller activities to join and make a larger project, or multiple projects to be bundled under one carbon abatement contract. This brings together tradable amounts of Australian carbon credit units (ACCUs). There are 2 ways that aggregation can take place:
- Project aggregation - activities using the same method are grouped into a single project.
- Contract aggregation - projects are grouped or ‘bundled’ into a single carbon abatement contract. An aggregated contract can include projects using different methods.
Working with aggregators
Aggregators help develop and run emissions reduction projects. They are private businesses or organisations and can be agents, project developers, holding companies or carbon abatement contract holders.
Under an aggregation agreement, landowners or project proponents grant the aggregator a legal right to carry out a project. The agreement also sets out how the costs and benefits of the project are shared between the parties.
Benefits of working with aggregators include:
- savings in project development, implementation, monitoring and reporting costs by working on a larger scale
- streamlining processes to participate by simplifying negotiations, paperwork, and other administrative tasks
- minimising business expenses and operational costs by sharing resources and efforts among multiple projects
- managing project performance risk by using strategies to ensure projects meet emission reduction targets and comply with scheme requirements.
If you're a project proponent or landholder, you can assign your rights to an aggregator. Find out more about being a project proponent and working with carbon service providers.
How aggregation works
Use these examples to help understand how aggregation works. These examples are guides only.
A landholder owns multiple sites and runs projects at each of them.
Project proponent: site owner
Type of aggregation: project – activities at each site are bundled to form a project
Benefits:
- Sites with small volume are bundled to achieve sufficient volume to offset transaction costs.
- Site owner can decide which sites to include in the project based on the performance of each site.
The aggregator has agreements with site owners for consultation and installation of building upgrades.
Project proponent: aggregator
Type of aggregation: project – activities at each site are bundled to form a project
Benefits:
- Sites are bundled to achieve sufficient volume to offset transaction costs.
- Some of the benefit of the ACCUs may be shared with the site owners.
The aggregator is a business that has agreements with project developers to carry out activities across multiple sites. The project developers will approach site owners and run the activities. The aggregator will be responsible for the project and manage the carbon abatement contract.
Project proponent: aggregator
Type of aggregation: contract – projects are grouped or ‘bundled’ into a single carbon abatement contract.
Obligations:
- The aggregator is responsible for delivering abatement
- The aggregator bears the risk of underperformance on the carbon abatement contract.
The aggregator is an energy retailer who applies an energy efficiency treatment to a population of customers.
Project proponent: energy retailer
Type of aggregation: project – activities at each site are bundled to form a project
Benefits:
- ACCUs are earned based on energy consumption of the energy efficiency treatment population relative to an untreated control portion of the population.
- Sites (population of customers) are aggregated to achieve sufficient volume to participate.
The landholder is the project proponent and aggregator. They carry out the project and could bundle one or more projects using the same method across multiple sites, or register a separate project for each site and bundle some or all of them into a single carbon abatement contract.
Project proponent: aggregator
Type of aggregation: contract - projects are grouped or ‘bundled’ into a single carbon abatement contract
Benefits:
- Aggregating these sites into a single project may reduce the number of audits required for the project and reduce any transaction costs.
- Aggregating the projects into a single carbon abatement contract may provide financing and delivery flexibility.
Requirements and obligations for aggregators
An aggregator needs to meet the same eligibility, compliance and enforcement requirements as a project proponent. This includes:
- having the legal right to carry out the project activities
- having a lawful and exclusive right to be issued all ACCUs from the project
- undergoing a fit and proper person assessment.
If an aggregator's application to register a project covers existing and prospective sites, we will ask you for evidence of legal right at 2 stages:
- at the time of project registration
- at the ACCU issuance stage.
Aggregators must also follow the steps to register a project.