The latest legislative and regulatory developments regarding Australian Carbon Credit Units (ACCUs) are quite substantial, focusing on enhancing the scheme’s integrity and efficacy.

A significant change is proposed through an Independent Review, which includes restructuring the emissions reduction methods and improving governance structures. The review suggests that new projects under certain methods like avoided deforestation will no longer be approved due to concerns over their additionality and impact. Moreover, projects related to landfill gas and carbon capture and storage (CCS) are suggested to undergo more rigorous baseline assessments.

There’s also a shift towards integrating these credits more closely with the Safeguard Mechanism, under which new abatement projects at Safeguard facilities will generate Safeguard Mechanism Credits instead of ACCUs. This reflects a strategic move to streamline and target carbon abatement initiatives more effectively.

Another key focus is on enhancing transparency and accountability within the ACCU framework. The introduction of new governance and method development guidelines is aimed at improving the overall trust and efficacy of the carbon credit system. This includes better project monitoring, public sharing of outcomes, and a more stringent consent process for projects on Native Title lands, which must now secure consent before registration.

These developments underscore a comprehensive effort by the Australian government to refine and improve the regulatory framework surrounding carbon credits, ensuring that it not only contributes to greenhouse gas reduction but also upholds high standards of integrity and public trust.

The development and implementation of the Australian Carbon Credit Unit (ACCU) scheme has evolved significantly since its inception. Here’s a general overview of its timeline and key developments:

1. Establishment and Early Years:

The ACCU scheme was introduced as part of Australia’s Carbon Farming Initiative (CFI) under the Carbon Credits (Carbon Farming Initiative) Act 2011. The scheme was designed to encourage voluntary actions to reduce greenhouse gas emissions by issuing ACCUs for each tonne of carbon dioxide equivalent (CO2-e) stored or avoided by approved carbon abatement projects.

2. Expansion and Integration:

Over the years, the scheme expanded to include more methods for generating ACCUs, including reforestation, savanna fire management, and methods reducing emissions from landfills and agriculture. The ACCUs could be used to meet obligations under the Carbon Pricing Mechanism (CPM), which was in effect from 2012 until its repeal in 2014.

3. Emissions Reduction Fund (ERF):

In 2014, the ACCU scheme was integrated into the newly established Emissions Reduction Fund (ERF), part of the Australian government’s broader climate policy. This fund aimed to purchase ACCUs through a competitive auction process, incentivising businesses and landowners to reduce emissions or enhance carbon storage.

4. Reforms and Reviews:

The scheme has undergone several reviews and reforms to ensure its effectiveness and integrity. Notably, the Independent Review of the ERF in 2017 led to changes aimed at improving the scheme’s operation and expanding eligible project types.

5. Linkages to Safeguard Mechanism:

The Safeguard Mechanism, introduced in 2016, requires large emitters to keep their emissions within baseline levels, which could be offset by purchasing ACCUs, thus linking the ERF and ACCU market more directly to industrial emissions reductions.

6. Recent Developments:

In recent years, the focus has shifted towards enhancing the transparency and reliability of the ACCU scheme. This includes refining methodologies, increasing the rigour of compliance and reporting requirements, and ensuring that the ACCUs represent genuine abatement activities. Recommendations from further independent reviews have suggested changes such as refining the human-induced regeneration (HIR) method and other technical improvements.