Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
Mr JOSH WILSON (Fremantle—Assistant Minister for Climate Change and Energy and Assistant Minister for Emergency Management) (09:46): I move: That this bill be now read a second time. The Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026 amends the Carbon Credits (Carbon Farming Initiative) Act 2011, the National Greenhouse and Energy Reporting Act 2007 and the New Vehicle Efficiency Standard Act 2024 to strengthen the integrity, transparency and effectiveness of these schemes, including by implementing key recommendations from several independent reviews.
This bill marks a significant step in the continuous improvement of the Australian Carbon Credit Unit Scheme. We've heard from landholders, from industry and from the full range of carbon market participants just how important the timely delivery of these reforms is to their communities and businesses and to our nation's progress towards a more diverse and sustainable economy.
The Australian Carbon Credit Unit, or ACCU, Scheme is a world-leading carbon crediting scheme and it plays a critical role in supporting Australia's pathway to net zero emissions by 2050, while also manifesting a remarkable set of broader benefits. The scheme underpins a multibillion-dollar market that generates new abatement and supports a cost-effective economy-wide transition to net zero.
It incentivises new emissions reduction activities across the economy by rewarding landholders, including farmers and First Nations communities, as well as other organisations and businesses, for undertaking projects that avoid emissions or remove and store carbon from the atmosphere and store it permanently. Participating in ACCU Scheme projects can provide game-changing benefits to our regional communities by diversifying income streams, creating jobs, and improving productivity in farming and natural resource industries.
Land based projects are also restoring our precious native ecosystems, protecting biodiversity, building climate resilience, and supporting First Nations people to care for country as they have done for tens of thousands of years. It is crucial that the scheme provides flexible ways to help hard-to-abate industries decarbonise, with the ability for safeguard mechanism facilities to meet their compliance obligations at a viable cost while effective onsite abatement technologies are developed and implemented.
This flexibility supports the competitiveness of our local heavy industries, which provide Australia with sovereign capacity in an uncertain global environment, giving them the certainty required to make long-term investments to reduce onsite emissions over time. The 2022 independent review of the ACCU Scheme by Professor Ian Chubb and statutory reviews by the Climate Change Authority found that the scheme was sound and delivering genuine emissions reductions.
But they also made it clear that maintaining trust in the scheme depended on strong governance, rigorous integrity settings and continuous improvement over time. Informed by the recommendations of these reviews, the government has committed over $75 million since 2023 to deliver scheme reforms. This bill is a central pillar of that reform commitment.
It will reinforce confidence in the integrity of the scheme. It builds on a scheme that is already well designed and effectively administered, ensuring it remains fit for purpose and keeps pace with a dynamic and growing carbon market. It does so through a comprehensive package of reforms to strengthen integrity, improve transparency, increase fairness and streamline administration.
We consulted on these reforms in 2023, and on this bill in 2026, and we know they are critical to support the effort of scheme participants and for maintaining the stability of the carbon market. Having worked cooperatively and concertedly with carbon market stakeholders and participants these last two years, I am proud to present this package today. At its heart, this bill makes a key improvement to recognition of the rights and interests of First Nations peoples in the ACCU Scheme.
Rather than seeking consent for projects on land that is recognised or claimed as native title after those projects have already been registered, this bill requires consent to be sought upfront and in a sensibly structured way, improving the scheme's alignment with the principles of free, prior and informed consent while continuing a focus on streamlined administration.
This is a pragmatic approach which ensures native title holders are aware of projects before they are implemented. Partnerships can then be established to allow project planning to commence, while the final arrangements for consent with respect to exactly how the project will be implemented are worked out. The bill also takes the important step of recognising registered native title claimants as eligible interest holders, further strengthening consent requirements for ACCU projects on native title land.
The bill's second key shift is the establishment of the independent Carbon Abatement Integrity Committee to advise the government on the integrity of ACCU methods, replacing the existing Emissions Reduction Assurance Committee. The new committee will bring enhanced independence and expertise, broader functions, and stronger transparency obligations. These changes will better position the committee to carry out its essential role of ensuring all ACCU methods meet the legislated offsets integrity standards.
The committee will continue to provide the government with expert advice on priorities for the proponent-led method development process, recognising that effective prioritisation is essential to a forward supply of ACCUs and the ongoing refinement and integrity of methods. Importantly, the new committee will be required to include at least one Aboriginal or Torres Strait Islander member so that First Nations knowledge and perspectives are embedded in its work and enshrining what is the current approach of the ERAC.
The bill also transfers responsibility for any future government purchasing of ACCUs from the Clean Energy Regulator to the Secretary of the Department of Climate Change, Energy, the Environment and Water, to achieve the clear separation of the responsibility for decisions to purchase ACCUs from the responsibility to regulate projects and ACCU issuances within the scheme, implementing a Chubb review recommendation in a way that also provides more flexibility in how the government may purchase ACCUs in future.
What's more, the bill replaces the current requirement for government purchasing of ACCUs to secure least-cost-abatement with a new requirement to make 'value for money' purchases. This principle ensures the government can consider other factors alongside abatement when making ACCU purchases, including the very considerable non-carbon benefits that arise from the scheme.
Together, these changes will mean that any future purchasing of ACCUs by the government can be done in a way that supports its strategic priorities as they evolve over time. The bill also strengthens the compliance and regulatory framework that underpins the scheme. It introduces a new integrity safeguard: the Method Transition Declaration.
In the very rare circumstances where this may be necessary, this mechanism will prevent ongoing crediting of ACCUs to projects using methods found to lack sufficient integrity. Let me be clear; this is not a tool for routine intervention. It is a circuit-breaker designed to respond to exceptional circumstances where a serious issue in relation to an ACCU method presents a material risk to the integrity of the scheme as a whole.
Appropriate criteria, conditions, and controls are built into the design of this mechanism to make sure it is used only where an exceptional intervention is warranted, while requiring due consultation on, and consideration of, the impact on projects. The bill also amends ACCU relinquishment provisions to complement existing mechanisms in the scheme that ensure the crediting of ACCUs is conservative.
It provides a new voluntary pathway for project proponents to initiate relinquishment of ACCUs where they may have inadvertently provided incorrect information to the regulator, allowing proponents to voluntarily correct any ACCU issuance that has occurred by an administrative error. And it provides the regulator new powers to require relinquishment of ACCUs if new or updated information from proponents affects project abatement estimates and identifies over-crediting.
The bill also enhances the regulator's compliance powers by clarifying their ability to review decisions later found to have been based on false or misleading information, and introduces a power for infringement notices to be issued for lower-level breaches. These provisions close identified gaps in scheme administration and demonstrate the government's commitment to continuous improvement over time.
Maintaining a high-integrity scheme must go hand in hand with encouraging forward-looking participation and innovation. Carbon farming is a unique industry. It depends on a combination of land stewardship, science, and long-term investment, supported by clear and predictable rules.
The bill recognises this by incorporating measures to simplify and streamline administration and reduce unnecessary regulatory burden. The bill also aims to encourage more investment and participation in research and development on new emissions reduction technologies, by removing existing barriers to new and varied methods that might otherwise make an effective contribution to the objectives of the scheme.
This addresses concerns we have heard from industry that current 'newness' requirements could lead to projects being excluded from the scheme due to previous participation in legitimate and valuable R&D. For that reason, this bill creates tailored newness requirements to ensure projects aren't excluded from the scheme due to earlier participation in R&D that has contributed to method development.
In addition, the bill makes targeted amendments so that future methods could allow a single project to include both sequestration activities and separate emissions-avoidance activities, where that can occur consistent with the offsets integrity standards. This change will enable landholders to have more flexibility and choice in future on the range of activities they may wish to undertake.
The integrated farm and land management method is a great example. Currently under development, this method would also be the first to provide a framework for additional activities to be added over time. These amendments will mean those activities can include emissions-avoidance activities, such as methane emissions reduction from livestock, alongside sequestration activities, such as regenerating native forest.
These measures will support new projects and a broader range of participants coming into the scheme, while maintaining the scheme's bedrock of integrity. This bill also supports the transparency and administration of the National Greenhouse and Energy Reporting scheme, and implements the government's response to the Climate Change Authority's 2023 review of the scheme and its legislation.
The NGER scheme is Australia's national system for reporting greenhouse gas emissions, energy consumption, and energy production by Australian businesses. It is a key data source supporting Australia's international and domestic reporting obligations, underpinning the Safeguard Mechanism, and informing our domestic climate and energy policies. This bill delivers greater transparency by introducing new flexible powers to require publication of more information submitted under the NGER scheme.
It also closes gaps in the compliance framework by requiring continued reporting obligations in the case of delayed registration. And it improves scheme administration by allowing the regulator to deregister a corporation on its own initiative where the corporation is in liquidation and unlikely to further participate in the scheme. Finally, this bill amends the New Vehicle Efficiency Standard Act 2024 to adjust the timing and alignment of key milestone dates.
By changing the dates for the calculation of interim emissions values, final emissions values, and the date to extinguish a liability, the bill provides certainty to industry by ensuring that legislative timelines allow them to adjust their vehicle mix to meet the NVES and therefore drive emissions reductions. By updating and strengthening the ACCU Scheme, this bill represents the next stage in the ongoing improvement and evolution of Australia's carbon market.
Enacting these reforms will reinforce the fundamentally sound foundations of integrity that our market is built upon, and at the same time provide the certainty it needs to drive more investment in emissions reductions across the nation. As Australia moves towards net-zero emissions, demand for high-integrity ACCUs is expected to grow, and this bill makes sure the scheme can continue to meet that demand on a diversified basis with confidence and integrity.
Debate adjourned.