Asia-Pacific

Australian Carbon Credit Scheme “Essentially Sound”

Australia’s Climate Council said too many major emitters are buying ACCUs so they can “continue to pollute as usual”. 

An independent review of Australian Carbon Credit Units (ACCUs) has made 16 recommendations to enhance the carbon market. 

The review was initiated in July 2022 to ensure ACCUs and the carbon crediting framework maintain a strong and credible reputation supported by participants, purchasers and the broader community. 

The review panel examined governance arrangements and legislative requirements of the carbon crediting scheme, as well as the integrity of the key methods used, other scheme settings affecting the integrity of ACCUs, and the broader impacts of carbon projects. 

The panel concluded that the ACCU scheme arrangements are “essentially sound”, though recommending a number of changes to clarify governance, improve transparency, facilitate positive project outcomes and co-benefits, and enhance confidence in the integrity and effectiveness of the scheme. 

Among the recommendations, the panel suggested keeping the roles of scheme assurer, scheme regulator and related policy development separate to “enhance confidence and transparency”. 

It also recommended the re-establishment of the Emissions Reduction Assurance Committee as the Carbon Abatement Integrity Committee, with “major responsibility” for integrity. 

The panel also recommended the removal of “unnecessary restrictions on data sharing”, saying the restrictions undermine transparency, trust and confidence in the scheme. “The default should be that data be made public, including carbon estimation areas,” the panel said. 

Changes to the Clean Energy Regulator are also needed to clarify its role in the scheme and address potential conflicts of interest, the panel said. Currently, the regulator is responsible for co-designing carbon credit methods, registering and regulating projects, and buying units. 

The panel said the responsibility for buying credits should be shifted to another government department. 

The government said it accepts, in principle, all 16 recommendations. 

Australia’s Climate Council said the review “ignores the elephant in the room” – namely that too many major emitters are buying ACCUs so that they can “continue to pollute as usual”. 

“Carbon offsets are supposed to be used as a last resort, and only for the small share of emissions that cannot be avoided through process, technology and other operational changes. Instead, paying for ACCUs has become the first and only thing many businesses are doing about their harmful emissions.” 

Climate Council head of advocacy Dr Jennifer Rayner called for reforms, including to limit the amount of emissions that can be offset to ensure that major industrial polluters genuinely reduce emissions. 

“Cheap and easy offsets on paper do little to tackle the climate crisis, which is already harming Australians through worsening extreme weather, floods and fires. The only lasting solution is genuine and deep cuts in emissions,” Rayner said. 

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2023 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top
Newsletter SignupReceive all the latest stories from the ESG Investor editorial team

Subscribe to our free weekly newsletter below and never miss a story.

Share via
Copy link
Powered by Social Snap