Review of Australian Carbon Credit Units Released
10th January 2023
An independent expert panel reviewing Australia’s carbon crediting mechanism has found the scheme to be “…essentially sound” but has made recommendations on governance, transparency, and facilitating positive project outcomes and community co-benefit. Under the Emissions Reduction Fund (ERF), landholders and businesses can earn Australian Carbon Credit Units (ACCUs) for every tonne of carbon dioxide stored or avoided by the project, thereby generating project revenue. The scheme is central to the Australian Government’s plans of achieving net-zero by 2050 and associated interim targets.
In 2022 the independent panel, led by former Chief Scientist, Professor Ian Chubb, was appointed to review the integrity of ACCUs under the Emissions Reduction Fund, amid concerns and claims that the scheme was fundamentally flawed and that a large proportion of credits issued under the methods (for nature-based offsets) did not represent genuine emissions abatement. The panel closely examined governance arrangements and legislative requirements of the scheme to ensure confidence in the integrity of ACCUs. The panel scrutinised several methods in particular, including CCS.
The panel made 16 recommendations, including that the Emissions Reduction Assurance Committee (ERAC) be re-established as the Carbon Abatement Integrity Committee. The panel also recommended separating ERAC’s functions as scheme assurer and regulator to avoid any perception of conflict and boost confidence.
With regard to CCS, the panel found that “while there has been relatively limited deployment of carbon capture and storage (CCS) nationally or globally, it is considered to have an important potential contribution to limiting the pace and extent of climate change.” Notably, the panel made no recommendations with regard to the CCS method.
The findings of the panel are important for the credibility of CCS and will ensure that ACCUs are available to proponents seeking to develop projects under the ERF.
The final report from the review is now publicly available here.