Wastewater treatment

Closed 26 Mar 2015

Opened 26 Mar 2015

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The climate change function transferred to our department from the Department of the Environment and Energy on 1 February 2020.

Finalised method determination

The Carbon Credits (Carbon Farming Initiative—Domestic, Commercial and Industrial Wastewater) Methodology Determination 2015 was made on 26 March 2015.

About this method

The method determination supports ERF projects through incentivising projects which treat eligible domestic, commercial or industrial wastewater in an anaerobic digester. The resulting biogas is sent to a combustion device where a large proportion of the methane is destroyed.

Who could benefit?

This method could benefit operators of facilities which treat domestic, commercial or industrial wastewater using a deep open anaerobic lagoon, for example municipal sewerage plants, abattoirs and fruit and vegetable processing plants.

How does it work?

Organic matter in wastewater decomposes to release biogas, which comprises approximately 50-70 per cent methane, a potent greenhouse gas which contributes to climate change. Some wastewater treatment technologies, like deep open anaerobic lagoons, do not capture biogas and therefore release large amounts of methane to the atmosphere.

There are three main steps in this method:

  • replacing a deep open anaerobic lagoon with an anaerobic digester (either a covered lagoon or an engineered biodigester)
  • collecting the biogas from the anaerobic digester
  • combusting the collected biogas

The combustion process converts the methane component of the biogas to carbon dioxide, which is a much less potent greenhouse gas than methane.

Combusting biogas can be used as a way to heat boilers and to generate renewable electricity. This electricity could be used on site or sold back into the electricity grid.

These sorts of renewable energy projects may also be able to generate renewable energy certificates under the Renewable Energy Target.


Wastewater projects must meet the following requirements.

The open anaerobic lagoon being replaced must:

  • have been treating domestic, commercial or industrial wastewater since before 24 April 2014
  • treat only domestic, commercial or industrial wastewater
  • be deeper than two metres
  • a minimum of one year's data on the sources of wastewater treated in the lagoon must be available

The devices used to combust the collected biogas must be a flare, boiler, internal combustion engine or another device designed to have a minimum 98 per cent destruction efficiency. The operation of the device must be regulated by a monitoring and control system. All combustion device types must be operated in accordance with the manufacturer's specifications and meet certain monitoring requirements detailed in the method.

Monitoring, reporting and auditing

Participants are required to monitor a number of items which feed into the net abatement calculations, including fuel and electricity use.

It's important to keep project records because participants will be required to submit regular reports on their projects, including reporting on emissions reductions.

Projects must be audited by a registered greenhouse and energy (NGER) auditor. A list of registered auditors is available on the Clean Energy Regulator website.

Development of this method

Emissions Reduction Assurance Committee (ERAC) advice

The ERAC's advice to the Minister regarding the suitability of the Determination to be made is published here, in accordance with Section 106(11) (C) of the Carbon Credits (Carbon Farming Initiative) Act 2011.

Draft determination and explanatory statement

A draft method determination for wastewater treatment was released for public comment on 15 October to 12 November 2014.

Note: A draft method determination that is open for public comment should not be relied upon for planning an ERF project. Draft method determinations may be modified following public consultation and are not final until made by the Minister for the Environment.


  • Emissions Reduction Fund


  • Climate Change
  • Emissions Reduction Fund
  • Emissions Reduction Fund methods