The Australian Government is delivering on its election commitment to strengthen carbon trading in Australia by appointing an independent panel to review the integrity of Australian Carbon Credit Units (ACCUs).
The panel, to be led by former Chief Scientist Professor Ian Chubb, will include four experts with the experience and expertise to advise the Government on how best Australia can realise the full potential of the ACCU system.
Concerns have been raised recently about several aspects of Australia’s carbon crediting system, including the integrity of its key methods and the Australian carbon credit units issued under it.
The Government wants to make sure it remains a strong and credible scheme supported by participants, purchasers and the broader community. The review will achieve that goal.
The Review Panel will consider these concerns by examining the governance arrangements and legislative requirements, the integrity of the key methods used and the broader scheme settings that affect the integrity of ACCUs.
Other matters to be examined by the panel include:
- how far carbon projects are supporting positive environmental, social and economic outcomes for agriculture, biodiversity and the participation of First Nations people
- what opportunities are there to maximise non-carbon benefits of projects, and
- requirements for the use of ACCUs under Climate Active.
The review will be informed by public consultation across a wide range of groups with a stake or expertise in carbon crediting market operations through written submissions and meetings.
Views will be sought from carbon project proponents and aggregators; experts and academics; First Nations groups; business, industry and consumer groups; Commonwealth and state and territory agencies; and the broader Australian community.
Review of the carbon crediting framework will take six months to complete, with the panel expected to provide its report, along with recommendations, to the government by 31 December 2022.
Carbon markets have enormous potential to support Australia’s ambition to cut emissions by 43% below 2005 levels by 2030, achieve net zero emissions by 2050 and boost the economy.
A strong carbon crediting system will encourage more organisations to take steps to reduce their emissions, help Australia meet its emissions reduction targets and better support our regional economies.
The terms of reference for the review are below:
Independent Review of Australian Carbon Credit Units
Terms of reference
The Government supports reductions in Australia’s greenhouse gas emissions by crediting Australian carbon credit units (ACCUs) issued under the Carbon Credits (Carbon Farming Initiative) Act 2011, and purchasing ACCUs through the Emissions Reduction Fund (ERF). These reductions help meet Australia’s emissions reductions targets. The Government will continue to invest in ACCUs to support voluntary action on emissions reduction. Maintaining the integrity of this carbon crediting system will also ensure a reliable supply of high quality domestic offsets is available to support the reduction of Safeguard Mechanism baselines over time.
In addition to helping meet Australia’s climate change goals, many carbon projects have benefits for agricultural productivity, Indigenous communities and the environment. Managed well, the framework for carbon crediting will continue to make a significant and enhanced contribution to the broader community, particularly in regional Australia where many of the projects take place.
The purpose of this review is to ensure that ACCUs and the carbon crediting framework maintain a strong and credible reputation supported by participants, purchasers and the broader community. To achieve this, the independent, expert panel will provide advice to the Minister for Climate Change and Energy about the framework for ACCU generation and trade to ensure its integrity, consistency with agricultural and other objectives, and contribution to environmental, economic and other benefits like biodiversity.
The independent panel will evaluate and advise on:
1. The integrity of ACCUs issued under the Carbon Credits (Carbon Farming Initiative) Act 2011, with specific reference to:
a. Whether scheme governance is appropriate, including:
i. whether the scheme’s governance structure is fit for purpose including the allocation and operation of roles and responsibilities between and within relevant agencies, including management of conflicts of interest
ii. whether the scheme’s settings and legislative requirements are appropriate to ensure good governance and confidence in scheme integrity
iii. whether the scheme has appropriate transparency including whether and how reporting and publication of data could be improved.
b. Whether the methods by which ACCUs are generated meet the offsets integrity standards, including:
i. consideration of recent claims raised about the Human Induced Regeneration, Carbon Capture and Storage, Avoided Deforestation, and Landfill Waste Gas methods
ii. whether method development and review processes are appropriate and effective.
c. Any other matters the panel considers relevant to the integrity of ACCUs.
2. The broader impacts of activities incentivised under Australia’s carbon crediting framework including:
a. whether the current processes and requirements are appropriate to manage negative social, economic and environmental impacts, including on agricultural productivity and regional communities
b. the extent to which carbon projects are currently supporting positive environmental, social and economic outcomes including for biodiversity and the participation of First Nations people
c. opportunities to maximise non-carbon benefits of projects
d. requirements for the use of ACCUs under Climate Active.
The review will include public consultation seeking written submissions as well as meetings including with relevant academics and experts, First Nations groups, project proponents, aggregators, industry and consumer groups, business, the community, and relevant Commonwealth and State and Territory government agencies.
A final report with findings and recommendations to address any identified issues will be delivered within 6 months of commencement.