Overview

What is the Reef Credit Scheme?

The Reef Credit Scheme is an innovative, market-based solution offering a new way to improve the quality of water entering the Great Barrier Reef.

The Reef Credit Scheme was conceived in response to the emerging consensus that a market-mechanism to incentivise water quality improvements across catchments of the Great Barrier Reef was urgently needed.

The Reef Credit Scheme will enable land managers to undertake projects that improve water quality through changes in land management to generate a tradeable unit of pollutant reduction or ‘Reef Credit’. A Reef Credit represents a quantifiable volume of nutrient, pesticide or sediment prevented from entering the Great Barrier Reef catchment.

The relative value of pollutant reduction from nutrient, sediment or pesticide is set using the reef wide pollution reduction targets described in the Reef 2050 Water Quality Improvement Plan (2018). These values will be periodically amended by the Reef Credit Secretariat to reflect changes to the pollution reduction targets.  A Reef Credit can then be sold to those seeking to invest in water quality improvements, such as government, private industry and philanthropists.

Natural resource management organisations, Terrain NRM and NQ Dry Tropics, have teamed up with environmental markets investor, GreenCollar, to develop the Reef Credit Scheme. The Scheme has been developed in collaboration with industry groups, research organisations and regional communities.

With financial support from the Queensland Government, the partnership is focused on setting up a framework to support the Reef Credit Scheme. This framework includes independent governance arrangements that will ensure that the Reef Credit Scheme is founded on delivering the highest standards of environmental and financial integrity. Integrity is further strengthened through a number of safeguards, including the requirement that Reef Credit projects are audited against robust methodologies to verify reductions in sediment, nutrients or pesticides into the Reef.

Benefits of the Reef Credit Scheme
  • Clear and robust rules to ensure water quality improvements credited are real, additional and permanent.
  • Farmers and land managers earn diversified and regular income over 10- 25 year time frames.
  • Research and knowledge linked to on-ground practice through peer reviewed methods designed to suit local conditions.
  • Attracts investment from government, corporate and philanthropic sources.
  • Investors buy verified water quality outcomes when they are delivered and audited.
  • A single administrative platform with independent, transparent and accountable governance oversight to achieve water quality improvement.
  • Delivers consistent measurement and monitoring tools to track progress toward water quality targets across the entire Reef.
  • Funds Projects designed to suit local conditions, agribusiness requirements and land manager’s plans.
  • Complements other key services such as extension, agribusiness, catchment management and other ecosystem services.
History

In early 2017, work began on designing the Reef Credit Scheme by foundation partners Terrain NRM, NQ Dry Tropics and GreenCollar as part of two reef water quality Major Integrated Projects (MIPs) funded by the Queensland Government. The initial concept and early consultations on mechanisms underlying the Reef Credit Scheme were first held in the in Wet Tropics and later introduced to the Burdekin Dry Tropics.

An initial feasibility study was conducted as part of a consultation phase of the Major Integrated Projects. The study demonstrated the viability of the Reef Credit Scheme.

In mid 2017, the Queensland Government committed support to the development of the Reef Credit Scheme, funding the establishment of a Reef Credit Secretariat for the start-up phase. Work then commenced on establishing the Secretariat and drafting of the Reef Credit Standard, Program Guide and foundation Reef Credit Methodologies. In late 2017, a Reef Credit Interim Steering Committee, comprising the CEOs of Terrain NRM, NQ Dry Tropics and Green Collar, was established to guide the development of the Reef Credit Scheme.

In February 2018 the Reef Credit Interim Steering Committee sought expressions of interest to develop an Options Paper for the Reef Credit Scheme. In particular, the Interim Steering Committee sought advice on how best to design, establish and operate a crediting system aimed at reducing pollutant loads to the Great Barrier Reef.

US based Winrock International was subsequently engaged to develop the Options Paper. Winrock International is a global leader in environmental markets and international development, providing solutions to some of the world’s most complex social, agricultural and environmental challenges.

A final Options Paper was completed in September 2018. This document has provided the basis for development of the Reef Credit Scheme. In mid-2018, the Interim Steering Committee also engaged with a number of operating water quality market programs, participants and founders, and standard development organisations in North America. These, together with discussions with key Australian stakeholders, have further shaped the design of the Reef Credit Scheme.

Throughout 2018 a number of project sites have been identified across the catchments of the Reef to test application of the foundation Reef Credit Methodologies. At these sites, management activities will be undertaken to generate Reef Credits including agricultural and grazing practice change, wetland restoration and gully restoration.

Current Consultation

Proposed methodology for accounting reduction in nutrient run-off through managed fertilizer application

This proposed methodology is open for public comment until 4 July 2019.

The review process will be undertaken according to the Reef Credit Methodology Approval Procedures and the process will be assured by the Reef Credit Technical Advisory Committee (TAC). Details of the TAC Membership and Terms of Reference are on the website.

All comments should be submitted to the Secretariat at feedback@reefcredit.org using the Public Consultation Feedback Form.

All submissions are public documents and will be published on the website at the conclusion of the public consultation and peer review process. Submissions will also be provided to methodology developer and peer reviewers. Contact details will not be published or otherwise disclosed.

Summary description of proposed methodology
This methodology quantifies the reduction in Dissolved Inorganic Nitrogen (DIN) lost from agricultural land through improved soil and nutrient management practices within the catchments of the Great Barrier Reef World Heritage Area (GBRWHA).

The scope of this methodology includes reducing DIN loss through more efficient soil and nutrient management practices from agricultural enterprises including (but not limited to) sugarcane, bananas, grains and fodder. The methodology allows for a range of practice changes, including land use change, that lead to a reduction in DIN loss across the project area.

There are a number of ways a farmer may reduce DIN loss within the project area. For example:
• Matching nitrogen application rate to expected crop yields at farm or paddock scale;
• Reduce nitrogen fertiliser application rate;
• Increase areas under fallow;
• Improve fertiliser delivery practices; or
• Conversion to land use with a lower or zero nitrogen surplus

This methodology is not limited to the above management practices, but the project must provide a Land Management Plan that describes the proposed land management activities for the project duration.

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Scheme Timeline

The following outlines the proposed timetable for the development and establishment of the Reef Credit Scheme

Date Milestone
30th October 2018 Presentation of draft Reef Credit Standard and Guide to key stakeholders
12th November 2018 Public Consultation on draft Reef Credit Standard and Guide commences
Throughout November 2018 Targeted stakeholder briefings on draft Reef Credit Standard and Guide

12th December 2018

January-February 2019

Public Consultation on draft Reef Credit Standard and Guide concludes

Consideration and response to Public Consultation on draft Reef Credit Standard and Guide

March 2019 Presentation of finalised Reef Credit Standard and Guide
April 2019 Development of Methodology Approval Procedures
May 2019 Establishment of Technical Advisory Committee
June 2019 Peer review of first Methodology
July 2019 Establishment of formal governance arrangements

August 2019

September 2019

Registration of first Reef Credit Projects

Issuance of first Reef Credits

Next steps

Peer Review of the First Proposed Methodology
Peer reviewers will be appointed by the Secretariat as subject matter experts to ensure methodologies are theoretically rigorous, scientifically robust and practically workable. It is anticipated that the peer review process for the first proposed methodology titled ‘Method for Accounting Reduction in Nutrient Run-off through Managed Fertilizer Application’ will commence in June and will be completed by July. The process for peer review of methodologies is set out in the Reef Credit Standard, Schedule 5.

The peer review process will include broader public consultation on the proposed methodology. The Reef Credit Secretariat will be seeking this public comment on the proposed methodology in June. The public consultation period will run for 30 days in parallel with the subject matter expert review.

Establishment of Governing Body
An independent skills based Board of Directors will be established to provide oversight to the Reef Credit Scheme. It is anticipated that the Board will be established by July at which time the first Reef Credit Projects may be submitted for approval.

All components of the Reef Credit Scheme, including the governance arrangements, will be reviewed at the end of 2019 when the beta phase concludes. The revised arrangements will then be formally ratified by the Board.