Australian Carbon Credit Units review final report, recommendations & key findings and next steps

CLIMATE CHANGE BRIEFING NOTE

On 9 January 2023, the Australian Government released the final report of the Independent Review of Australian Carbon Units (ACCUs). The Government has accepted in principle all 16 recommendations of the independent panel, led by former Chief Scientist Professor Ian Chubb AC to improve the ACCU scheme.

The Report can be found here.

Executive summary of recommendations and key findings can be found here.

What this means for our industries

• The ACCU review panel concluded that the ACCU scheme was fundamentally well-designed when introduced 11 years ago, but that it could be improved by:
  • Clarifying the intention of the scheme
  • Clearly identifying the separate key roles of integrity assurance, regulation and administration
  • Improve transparency and removing unnecessary restrictions on data sharing
  • Providing more support for regional communities and First Nations peoples to participate in and benefit from the scheme
  • Improve information and incentives, including in relation to non-carbon benefits and attributes
• The review panel made no mention of the Plantation Forestry Method in its final report or recommendations when accessing whether methods were meeting the offsets integrity standards.
• The lack of attention and concern about the Plantation Forestry Method by the review panel will provide confidence to the Government that it can oppose Senator Pocock’s disallowance which is seeking to disallow Schedules 3 and 4 of the Plantation Forestry Method – Note the Senator Pocock’s disallowance will be dealt with in the first Parliamentary sitting week commencing 6 February 2023.
• There will be various opportunities for forest industries to engage with the Government as they seek to implement the review panel’s recommendations which will have implications for a wide range of market participants and other stakeholders.
• The Government will consider funding arrangements for implementation of the recommendations through the 2023-24 Budget.
• Our industry has a lot to offer with regards to the key areas of improvement to the ACCU scheme. AFPA has commenced early engagement with the Government, broader members of Parliament, relevant departments, and agencies to ensure they properly consult with the industry as they implement recommendations and any associated legislative amendments.

Chubb Review Background

• In July 2022, Hon Chris Bowen, Minister for Climate Change and Energy announced the independent review of ACCUs.
• The review was in response to concerns raised about the integrity of key methods.
• Important to note that while Prof Andrew McIntosh raised concerns about the Plantation Forestry Method, the independent review panel did not review the method.
• The review called for views on the integrity of ACCUs, and the broader impacts of activities incentivised under the ACCU scheme framework.
• The independent review panel delivered its report to Government in December 2022.

Government reaction to the Report

• On 9 January 2023, the Minister for Climate Change and Energy addressed the ACCU report  with Prof Ian Chubb at a lengthy press conference  – transcript can be found here
  • The Minister made the following key points
    • As Australia drives toward net zero, it’s vital our carbon credits are fit for purpose, verifiable and additional.
    • The human induced regeneration and landfill gas methods definitions would be tightened – recommendation 8
    • No further ACCUs will be issued under the avoided deforestation method – effective immediately – recommendation 9
    • The Emission Reduction Assurance Committee (ERAC) will be abolished, and a new committee will be established, the Carbon Abatement Integrity Committee (CAIC) – recommendation 5
    • The Minister will no longer set method priorities and that there will be an independent process where proponents can put forward methods – recommendation 5.1
      • Key finding – A proponent-led method development model would promote innovation by giving proponents the flexibility to develop or adopt new approaches to carbon abatement
    • All carbon service providers to be accredited and regulated – recommendation 12
  • Prof Ian Chubb made the following key points          
    • The ACCU scheme is a young scheme, and the carbon market is relatively immature, but both have enormous responsibility
    • That science and technology might develop effective and scalable options to meet the twin challenges of greenhouse gas removal and capture, but it isn’t there yet
    • The only pathway known to science that has immediate capacity – to remove greenhouse gases, particularly CO2, from the atmosphere is photosynthesis.
    • To start CO2 removal at scale, well before 2050, as the IPCC urges, the land sector will have to carry much of the immediate load. 

 Summary

• The expert review panel determined that ACCU scheme could be improved to assist Australia to achieve net zero by 2050.
• Improvements and associated legislative amendments to the scheme will be made to ensure ACCUs are fit for purpose, verifiable and additional.
• A proponent-led method development model would promote innovation by giving proponents the flexibility to develop or adopt new approaches to carbon abatement.
• Photosynthesis is the only known pathway to science that has immediate capacity to remove greenhouse gases at scale.
• The land sector will have to carry much of the immediate load if Australia is to achieve net zero by 2050.
• AFPA has commenced early engagement with the Government, broader members of Parliament, relevant departments, and agencies to ensure they properly consult with the industry as they implement recommendations and any associated legislative amendments.

Briefing note created by Natasa Sikman – Climate Policy Manager

Please don’t hesitate to contact me on 0467 550 065 if you require further information regarding this matter.

Kind regards

Nataša Sikman

Australian Forest Products Association

Deputy CEO, People, Culture and Processes

Climate Policy Manager