Aggregate projects or contracts

Aggregation is a process that brings together a number of sources of carbon abatement, enabling smaller activities to join together to form larger projects. It has the potential to make smaller projects more financially viable, provide more flexibility and help manage performance risk. This brings together tradable amounts of BidCarbon removal units (BRUs).

About aggregation

Aggregators play an important role in developing and running emissions reduction projects. They are private businesses or organisations that can take on various roles, including that of agents, project developers, holding companies or carbon removal contract holders.

In the context of an aggregation agreement, landowners or project proponents may choose to 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.

We believe that there are a number of benefits to be gained from working with aggregators. These include the potential for savings in project development, implementation, monitoring and reporting costs by working on a larger scale. Another advantage is that processes can be streamlined to allow participation by simplifying negotiations, paperwork and other administrative tasks. Furthermore, there is the opportunity to minimise business expenses and operational costs by sharing resources and efforts among multiple projects. Finally, we feel that aggregators can help to manage project performance risk by using strategies to ensure projects meet emission reduction targets and comply with scheme requirements.

If you are a project proponent or landholder, you may wish to consider assigning your rights to an aggregator. Further information about the role of a project proponent and working with carbon service providers can be found here.

Working with aggregators

How aggregation works

Use these examples to help understand how aggregation works. These examples are guides only.

Example 1: participant owns or controls multiple sites

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.

Example 2: participant is a project developer

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.

Example 3: participant engages multiple project developers on multiple sites

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 removal contract.

Project proponent: aggregator

Type of aggregation: contract – projects are grouped or ‘bundled’ into a single carbon removal contract.

Obligations:

● The aggregator is responsible for delivering abatement

● The aggregator bears the risk of underperformance on the carbon removal contract.

Example 4: participant is the landholder (sequestration)

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 removal contract.

Project proponent: aggregator

Type of aggregation: contract - projects are grouped or ‘bundled’ into a single carbon removal 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 removal contract may provide financing and delivery flexibility.

Requirements and obligations for aggregator

In order to qualify as an aggregator, an entity must meet the same eligibility, compliance and enforcement requirements as a project proponent. These include:

● The legal right to carry out the project activities must be established. 

● Furthermore, the right to be issued all BRUs from the project must be demonstrated to be lawful and exclusive. 

● Finally, a fit and proper person assessment must be undertaken.

In the event that an aggregator's application to register a project encompasses both existing and prospective sites, we would kindly request evidence of legal right at two distinct stages:

● at the time of project registration

● at the BRU issuance stage.

Aggregators are also kindly requested to follow the steps to register a project.

In addition, aggregators must complete the registration process for their projects.