Carbon Credits (Carbon Farming Initiative) Amendment Bill 2026

Ms PENFOLD (Lyne) (10:03): I move: That this bill be now read a second time. The Carbon Credits (Carbon Farming Initiative) Act 2011 underpins the Australian Carbon Credit Unit Scheme, which allows land managers to earn credits for reducing greenhouse gas emissions or storing carbon. I rise today because I seek to protect the integrity of that scheme.

The Act provides a framework for the methodology approvals, project eligibility and issuance of ACCUs. The Emissions Reduction Assurance Committee, or ERAC, assesses proposed methods against the requirements of the Act. Under the ACCU scheme, farmers, landholders, businesses and Indigenous communities undertake projects that reduce emissions or remove and store carbon from the atmosphere.

The scheme works only if Australians have confidence that ACCUs represent genuine and additional carbon abatement. That confidence is now being tested. I'm bringing this bill forward because the Labor Minns government has proposed an improved native forest management method, or INFM method, for selected multiple-use public native forests.

The proposal is currently being considered by ERAC. This methodology is intended to provide a funding mechanism for the Minns Labor government's proposed Great Koala National Park. The final creation of Labor's flagship environmental commitment is dependent on the successful registration of this methodology.

There are serious concerns as to whether this proposal satisfies the principles upon which the ACCU scheme was established. The Carbon Market Institute's taskforce reviewed the draft methodology and concluded that, as drafted, the method could present material risks to the integrity of the ACCU scheme, be too narrow in scope to achieve geographically broad impact and miss important opportunities to deliver broader forest health and community benefit outcomes.

We believe the method requires substantial revision to address fundamental gaps in its approach. Likewise, the Australian Forest Products Association has urged the federal government to withdraw support for the proposal. These are organisations with direct expertise in forestry, carbon accounting and environmental markets.

Their concerns go directly to the integrity of the ACCU scheme because, at its core, the methodology proposal is built on simply ceasing an existing activity within one land tenure category and seeking to generate carbon credits from that cessation. That was never the purpose of the ACCU scheme. There is an even more fundamental concern.

It is known as additionality. Additionality is one of the central principles underpinning the ACCU scheme. Carbon credits should only be awarded where the carbon benefit would not otherwise have occurred.

The ACCU scheme is not intended to pay governments, businesses or individuals for doing something that they had already decided to do. The carbon benefit must be additional. Without additionality, the scheme ceases to encourage genuine new abatement and instead becomes a funding mechanism for decisions already made.

This is where the proposed methodology encounters a serious problem. The Great Koala National Park was a political commitment long before this methodology emerged. It was an election commitment, one the communities are counting on.

The policy decision came first; the carbon methodology came later. That sequence matters because, if the government had already decided to create the Great Koala National Park and cease timber harvesting in these forests, then a very obvious question arises: what exactly is the ACCU scheme paying for? If the outcome was always going to occur regardless of the carbon project, where is the additionality?

Where is the additional carbon abatement that would not otherwise have occurred? Why should taxpayers and carbon market participants effectively fund a decision that had already been made? The Minns government appears to recognise this problem.

That is why it now says the park is contingent upon approval of the carbon project, but that creates a contradiction: if the park is genuinely contingent upon approval of the carbon methodology, then Labor announced one of the largest conservation projects in New South Wales history before securing a credible funding model. If the park was always going to proceed regardless, then the additionality argument becomes extraordinarily difficult to sustain.

Either way, serious questions arise. Either the government promised something before it knew how it would pay for it, or it is seeking carbon credits for an outcome that was already intended to occur. Neither proposition should give confidence to those responsible for protecting the integrity of the ACCU scheme.

If governments can simply change land use policy and claim carbon credits as a reward, we risk turning the ACCU scheme into a funding mechanism for political decisions rather than genuine carbon outcomes. There are many people across the North Coast who genuinely support the creation of the Great Koala National Park, but supporters of the park should also be asking some serious questions of the Minns Labor government.

If the environmental case is compelling, why was the funding not secured before the commitment was made? Supporters of the park should not have their aspirations tied to a methodology that leading experts say contains fundamental flaws. Likewise, forestry workers and their families should not have their livelihoods placed in limbo while the Labor government in New South Wales waits to see whether a speculative carbon revenue stream materialises.

The Minns Labor government has created uncertainty for everybody—conservationists, forestry workers and regional communities. That is not good environmental or economic policy, and it's certainly not good government. Forestry remains one of the most important industries across the North Coast and in my electorate of Lyne.

The industry directly employs more than 5,500 people and contributes approximately $2.9 billion annually, with a further $1 billion in value-added activity. These are families, apprentices, truck drivers, machine operators, harvest crews, meal workers and small-business operators. Yet, despite the proposed carbon methodology remaining under assessment and despite the government admitting the park is contingent upon that methodology, Labor has already acted.

An immediate harvesting moratorium was imposed in September last year across approximately 176,000 hectares of state forest earmarked for the park. Labor has already begun shutting down the industry before the park is funded. Workers have already lost jobs, and mills are already on their knees.

The people who work in forestry understand forests better than most. They understand regeneration, biodiversity, habitat protection and fuel management. ABARES reports that only around 0.05 per cent of Australia's native forests are harvested in any given year.

Australia will continue to need timber. The question is whether that timber will be produced here under world-leading environmental standards or imported from overseas under standards we cannot control. Closing down our sustainable forest industry does not eliminate demand.

It simply exports production, jobs and economic opportunity. None of this is to suggest that koalas are unimportant—quite the opposite. Koalas are one of Australia's most iconic species and deserve serious conservation efforts grounded in science and evidence.

But science must drive policy, not politics. The major threats to koalas are urbanisation, vehicle strikes, dog attacks, disease and catastrophic bushfires. The 2025 CSIRO analysis found koala numbers to be significantly higher than previous estimates suggested.

Further, the New South Wales government survey work found approximately 10,000 to 14,000 koalas living within state forest areas subject to timber harvesting, with populations comparable to nearby national park areas where harvesting does not occur. That finding is important. It suggests that, after decades of timber production, koalas continue to exist in substantial numbers within actively managed forests.

It challenges the notion that forestry and koalas are inherently incompatible. It suggests that active forest management, biodiversity conservation and timber production can co-exist. Labor is cruelling a sustainable regional industry for political purposes.

It's as simple as that. In conclusion, this bill seeks to strengthen transparency, reinforce integrity and ensure that ACCUs are awarded only where they represent genuine and additional carbon abatement. The park does not meet this threshold and the methodology must not be approved, with my bill or not.

I dedicate this bill to every forestry worker and timber mill worker, every person who has lost their job and every worker still fighting to keep one. I also dedicate it to the timber mills and supporting businesses in my electorate, those in Karuah, Booral, Bulahdelah, Pampoolah, Wingham, Kendall, Herons Creek and my friends north from Gum Scrub. You have been treated appallingly by the Minns Labor government.

I will always stand with you. I commend this bill to the House. The SPEAKER: Is the motion seconded?

Mr Conaghan: I second the bill and reserve my right to speak. The SPEAKER: The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.