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Australia advances ACCU integrity reforms bill

Created at 21 Aug · 12:05 PM1 source↑ Market-relevant
IN SHORT

Australia's government has introduced legislation to enhance the integrity and transparency of its Australian Carbon Credit Unit (ACCU) Scheme. The bill includes new powers to manage carbon crediting methods that pose integrity risks and reforms ACCU Scheme governance.

Who's Involved

Ian Chubb
Led the 2022 Chubb Review
Josh Wilson
Assistant minister for climate change and energy
Carbon Market Institute (CMI)
Industry group opposing integrity-risk mechanism
GreenCollar
Carbon developer opposing integrity-risk mechanism

↳ Why This Matters

The reforms aim to enhance trust and stability in Australia's carbon market, impacting investor confidence and the supply of carbon credits, while industry concerns about sovereign risk highlight potential challenges in implementation.

Key facts

  • Australia's government has advanced the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026.
  • The bill aims to strengthen integrity and transparency in the Australian Carbon Credit Unit (ACCU) Scheme.
  • New powers will allow the government to address carbon crediting methods deemed to pose integrity risks.
  • The legislation reforms ACCU Scheme governance, native title consent requirements, and the government's role in purchasing credits.
  • Industry groups broadly support the reforms but oppose the proposed Integrity Risk Method Declaration mechanism.

The Australian government has introduced legislation aimed at bolstering the integrity and transparency of its Australian Carbon Credit Unit (ACCU) Scheme. The Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026, presented to parliament on August 20, grants the government new powers to manage carbon crediting methods that are identified as posing integrity risks.

The bill largely aligns with proposals previously put forth for consultation, which were informed by the 2022 Chubb Review and the Climate Change Authority's 2023 review. A significant provision allows the government to prevent projects from earning ACCUs under methods that no longer meet integrity standards, following a transition period and the availability of an alternative method. This represents a shift from the current framework where projects under suspended or revoked methods can generally continue generating ACCUs.

Furthermore, the legislation formalizes the creation of the Carbon Abatement Integrity Committee (CAIC), which will replace the Emissions Reduction Assurance Committee (Erac) and expand its advisory functions. Government ACCU purchasing responsibility will move from the Clean Energy Regulator to the Department of Climate Change, Energy, the Environment and Water, adopting a broader value-for-money approach over the current least-cost-abatement principle. Assistant minister for climate change and energy Josh Wilson stated that "non-carbon benefits" may be considered in future ACCU purchases.

While industry groups such as the Carbon Market Institute, Australian Energy Producers, Origin Energy, AGL, GreenCollar, and Corporate Carbon generally welcomed the governance and transparency enhancements, they expressed unified opposition to the proposed Integrity Risk Method Declaration (IRMD) mechanism. They warned that the IRMD introduces significant sovereign risk, could diminish investor confidence, and restrict future carbon credit supply, arguing that retrospective intervention in approved methodologies creates commercial uncertainty for developers and buyers.

Frequently asked questions

The ACCU Scheme is Australia's national carbon offset scheme, allowing projects to generate ACCUs for emissions reductions or carbon sequestration that can be sold to meet compliance obligations or voluntary targets.

The IRMD is a proposed mechanism that would allow the climate change minister to intervene in approved carbon crediting methodologies if they are deemed to pose integrity risks, potentially preventing projects from earning ACCUs.

Industry groups argue that the IRMD introduces sovereign risk, creates commercial uncertainty for developers and buyers, and could restrict future carbon credit supply by allowing retrospective intervention in approved methodologies.

What Happens Next

01The bill will proceed through parliamentary debate and voting.
02The government will consider "non-carbon benefits" in future ACCU purchasing.

How It Developed

Australia's government advanced legislation to strengthen integrity and transparency in its ACCU Scheme.
The Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026 was introduced to parliament.
The bill includes new powers to address carbon crediting methods deemed to pose integrity risks.
It also reforms ACCU Scheme governance, native title consent requirements, and the government's role in buying credits.
The legislation reflects proposals from the Chubb Review and the Climate Change Authority's review.
A key measure allows the government to prevent projects from earning ACCUs under methods no longer meeting integrity standards.
The bill formalizes the Carbon Abatement Integrity Committee (CAIC) and shifts ACCU purchasing responsibility.
Industry groups broadly welcomed governance and transparency improvements but opposed the Integrity Risk Method Declaration mechanism.

Sources

T1
Australia advances ACCU integrity reforms billArgus Media

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