A panel appointed to review the integrity of the Australian Carbon Credit Unit (ACCU) scheme has concluded that the system is sound but recommends changes to improve it.
The Australian government in July 2022 appointed an independent panel to review the integrity of ACCUs, which are issued through the Emissions Reduction Fund (ERF), following claims that the system did little to reduce greenhouse gas (GHG) emissions. The panel, led by the country's former chief scientist Ian Chubb, has completed its review and released a report on 9 January stating that it does not agree with the criticisms.
The scheme is sound and "was fundamentally well designed when introduced," the report said, but added that after 11 years of operation, tweaks are necessary. The report sets out 16 recommendations to improve the governance, structure and transparency of the scheme.
One of the major recommendations suggested is that the Emission Reduction Assurance Committee (Erac) should be re-established as the Carbon Abatement Integrity Committee with adjusted terms of membership and functions. There is a necessity for a new body with a diverse selection of members, including at least one First Nations Australian with relevant expertise, to assure method integrity, the report stated.
The other recommendations call for the removal of restrictions on data sharing, improving the release of information to increase accessibility, providing more support for regional communities and First Nations peoples to participate and benefit from the scheme and streamlining methods to make them more broadly applicable to encourage emissions reductions.
The federal Albanese government has accepted in principle all 16 recommendations, said Australian climate change and energy minister Chris Bowen on 9 January. The changes "will help ensure Australia's carbon crediting scheme has the highest integrity and contributes to achieving Australia's emission targets," Bowen said.
Australia's ERF is mainly constituted of three types of projects — avoided deforestation in western New South Wales, human-induced regeneration of native forests and the combustion of methane from landfills — which account for approximately 75pc of ACCUs issued.
But all these methods have serious integrity issues, said the former head of the Erac Andrew Macintosh. "People are getting ACCUs for not clearing forests that were never going to be cleared. They are getting credits for growing trees that are already there, they are getting credits for growing forests in places that will never sustain permanent forests and they are getting credits for operating electricity generators at large landfills that would have [been] operated anyway," Macintosh said.
Indirect review
But the review has not directly addressed all these issues. It has also not addressed the fact that "too many major emitters are buying ACCUs so they can continue to pollute as usual," said Australian independent climate change organisation the Climate Council.
"Big polluting corporations, including coal and gas companies buy carbon offsets to avoid and delay actually reducing or removing harmful greenhouse gas emissions in their own operations," said Greenpeace Australia Pacific's head of advocacy and strategy Glenn Walker. "With the impeding release of the safeguard mechanism, it is imperative that the federal government constrain the use of ACCUs for big polluting companies," he added.
The Australian government in December 2022 introduced the Safeguard Mechanism (Crediting) Amendment Bill on planned reforms to the system that allows large industrial facilities to earn carbon credits when reducing GHG emissions below baselines.
The proposed plan requires safeguarded facilities to reduce GHG emissions by an average of 4.9pc/yr to 2030, as part of the government's plan to cut GHG emissions by 43pc of 2005 levels by 2030. The mechanism is scheduled to take effect on 1 July 2023.
