The Australian government has advanced legislation to strengthen integrity and transparency in its Australian Carbon Credit Unit (ACCU) Scheme, including new powers to address carbon crediting methods deemed to pose integrity risks.
The Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026, introduced to parliament on 20 August, will also reform ACCU Scheme governance, native title consent requirements and the government's role in buying credits.
The legislation largely reflects the proposals put out for consultation in May, which follow recommendations from the 2022 Chubb Review led by Australia's former chief scientist Ian Chubb and the Climate Change Authority's (CCA) 2023 review.
A key measure retained from the May draft would give the government new powers to manage ACCU methods that are found to present significant integrity concerns. Under the bill, projects could eventually be prevented from earning ACCUs under methods deemed to no longer meet integrity standards, after a transition period and where an alternative method is available.
The proposal goes beyond the current framework, under which projects registered under a suspended or revoked method can generally continue generating ACCUs throughout their remaining crediting period.
The bill would also formalise the creation of the Carbon Abatement Integrity Committee (CAIC), replacing the Emissions Reduction Assurance Committee (Erac) and expanding its role in advising on method development and scheme integrity.
It would also shift government ACCU purchasing responsibility from the Clean Energy Regulator (CER) to the Department of Climate Change, Energy, the Environment and Water (DCCEEW) and replace the current least-cost-abatement principle with a broader value-for-money approach.
This means that the government may consider "non-carbon benefits" in any future purchasing of ACCUs, assistant minister for climate change and energy Josh Wilson said on 20 August.
Industry backs most reforms, opposes integrity-risk mechanism
Industry groups and stakeholders — including the Carbon Market Institute (CMI), Australian Energy Producers (AEP), Origin Energy, AGL, and major carbon developers like GreenCollar and Corporate Carbon — broadly welcomed the governance and transparency improvements aligned with the Chubb and CCA reviews in their submissions to the May consultation.
But they formed a unified front of resistance against the proposed Integrity Risk Method Declaration (IRMD) mechanism.
The IRMD represents a significant sovereign risk that could severely dampen investor confidence and restrict future carbon credit supply, they warned.
Allowing the climate change minister to retrospectively intervene in approved methodologies introduces severe commercial uncertainty for developers and ACCU buyers, CMI and GreenCollar argued. This would shift a disproportionate level of risk into project developers, who make long-term land-management decisions based on approved methods, they noted.
Industry participants also stressed that the ACCU Scheme already contained a robust integrity framework and urged the government to rely on existing review and oversight processes instead of creating an additional intervention power.
