Australian chemicals and fertilizer producer Incitec Pivot (IPL) has earned 63,529 Safeguard Mechanism Credits (SMCs) with its Moranbah ammonia facility in Queensland for the 2023-24 compliance year that ended in June, which it plans to hold for future surrender requirements from another facility.
The SMC figure was formally disclosed by the Clean Energy Regulator (CER) in the Moranbah facility's safeguard position statement early this month, following IPL's National Greenhouse and Energy Reporting (NGER) data submission, the company told Argus on 18 November.
This is as Moranbah reported scope 1 greenhouse gas (GHG) emissions below its baseline, the company said. "The site is therefore eligible to apply for SMCs to be issued in February," it told Argus.
IPL's Phosphate Hill facility, on the other hand, exceeded its baseline by 40,841t of CO2 equivalent (CO2e). But it will apply for a Trade Exposed Baseline Adjustment, which, if successful, will reduce that excess, the company said in its 2024 climate change report released on 18 November.
"It is planned that SMCs earned at Moranbah will be surrendered to settle the Phosphate Hill liability when it becomes due in the 2025 IPL financial year" to 30 September 2025, the company added.
The safeguard mechanism applies to facilities that emit more than 100,000t of CO2e in a fiscal year. Emissions must be reported by 31 October, and facilities must manage any excess emissions by the compliance deadline of 31 March 2025 by surrendering Australian Carbon Credit Units (ACCUs) or SMCs — which the CER will start to issue for the first time in early 2025.
IPL's Moranbah surrendered 15,482 ACCUs in the July 2022 to June 2023 fiscal year. It was one of 44 facilities that surrendered carbon credit units out of the total 219 covered under the mechanism that year. Phosphate Hill's reported emissions in 2022-23, at 509,491t of CO2e, were just below its baseline of 512,235t of CO2e.
The shift in the 2023-24 compliance period comes as IPL finished installing tertiary nitrous oxide (N2O) abatement at Moranbah in March this year.
"Since its installation, the unit has been performing well and is abating up to 99pc of N2O process emissions, which are created during nitric acid manufacture," it said in its climate change report.
The abatement unit is expected to have a lifespan of 20 years and will abate around 200,000 t/yr of CO2e, reducing emissions to a level below the facility's baseline in the near term. But as the baseline will decline under the safeguard mechanism, "this benefit will reduce," the company added.
