Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
Mr TEHAN (Wannon—Manager of Opposition Business) (18:09): The Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026 is significant, complex and cannot be supported. On its face, it purports to make a series of technical changes to the operation of Australia's $50 billion carbon credits market, but, like every piece of legislation that this Albanese Labor government puts in place, it's got an ideological underpinning to it which is going to do harm.
And, as I will explain, this piece of legislation is no different to all the other pieces of legislation which the Albanese Labor government has put in place when it comes to their ideologically driven net zero agenda. With some exceptions, these changes are mostly uncontroversial. They include a new incentive structure for the role of R&D in carbon abatement, the establishment of a new oversight body, shifting certain powers from the Clean Energy Regulator to the Department of Climate Change, Energy, the Environment and Water.
But, as I have said, this bill is a wolf in sheep's clothing. I'll be very clear at the outset. The coalition will oppose this fundamentally flawed and regressive net zero bill.
Had the bill been limited to the changes that I mentioned earlier, then it would have stood a better chance of attracting support from the coalition. After all, the coalition does support an effective and robust carbon credit market that helps Australian companies reduce their emissions responsibly and competitively, but this bill goes way beyond making a few administrative-in-nature changes.
The bill greatly expands Australia's native title regime, removes the least-cost financial test and hands the minister sweeping new carbon credit powers. As I will explain in detail, these are deeply consequential amendments that the coalition cannot support. Australia's carbon credits market, formally the Australian Carbon Credit Unit Scheme, has been operating in Australia since 2011.
It has operated under successive governments, albeit under extremely different rules, policy objectives and names. At its core, however, its intent has remained the same: (a) to support companies to reduce their emissions from industrial processes and (b) to back emissions sequestration, that is, storing carbon in vegetation or soil. As it currently operates, companies can use the scheme to implement eligible emissions reduction projects using approved methods and earn one Australian carbon credit unit for each tonne of carbon dioxide equivalent emissions that the project avoids or stores.
Participants can then sell ACCUs to the Australian government by entering into a carbon abatement contract or to private entities who need to surrender ACCUs to meet compliance obligations under the safeguard mechanism. Labor changed the safeguard mechanism in mid-2023. Under this change, baselines for emissions reductions were adjusted so that they sharply decline.
Consequentially, a company which exceeds its baselines must purchase carbon credits to offset their emissions. I remind members, again, that the coalition does not support Labor's punitive safeguard mechanism, which is a carbon tax. We want to abolish it.
One of the principal concerns that the coalition has with this bill is the changes to the native title arrangements. Currently, the Carbon Credits (Carbon Farming Initiative) Act 2011 provides for the conditional registration of eligible offset projects on native title land before the consent of eligible interest holders has been obtained. In practice, this means that any project may be established for up to five years—the first reporting period—before it is required to provide evidence to the Clean Energy Regulator that eligible interest holders' consent has been obtained to undertake that project.
The bill, in sections 27 and 28, dramatically upends this process. The bill establishes that a mere claim to native title would become an eligible interest. Accordingly, this would require someone wanting to establish a carbon abatement project to deal with a claim to native title, regardless as to whether the title actually exists or exists at law.
That is a monumental change and, as a precedent, would have monumental consequences. This new approval process is part of a more cumbersome two-stage consent process for setting up a carbon abatement project. Among other things, the Clean Energy Regulator, at section 32, would be allowed to unilaterally revoke a proponent's project declaration at any time prior to the first reporting period, if there is no reasonable prospect that consent will be obtained between proponents and eligible interest holders.
Talk about putting in place more and more regulation—more and more red tape! The government just does not know any bounds when it comes to putting regulation in place. The coalition acknowledges that native title laws have been in place for over 30 years in Australia, although their exact composition has always been the subject of complex and at times emotional debate and protracted legal proceedings.
There has always tended to be some recognition by lawmakers that there are practical limitations to their application. But, quite simply, this bill we have before us goes too far. It is the definition of mission creep, and mission creep, as I've said, as a precedent will set, I think, a new regulatory burden on this country that no-one should be supporting.
The first issue at hand is: what is the proposed change actually fixing? Under the current carbon credit regime, native title holders enjoy absolute, rock-solid legal protections. These include that a project proponent must obtain the consent of the native title holder, and there is a built-in right to negotiate.
Secondly, this change goes beyond what the government's own report recommended. So, once again, I do question why the government is doing this when its own report didn't recommend it. In introducing this bill, the assistant minister asserted that the changes this bill is trying to make arise from the 2022 Chubb review.
This simply isn't the case. I don't know what's happening to this government, but I fear, under the Prime Minister's leadership, that they're learning to just make things up and think, if they just say it, it's true. Well, there are actual facts that matter.
And the Prime Minister mightn't like that. He mightn't like the fact it seems he's given Rhys Muldoon a reference. But, if he has, it's a fact.
And you've got to be honest and upfront, and that's what I think the government has got to start learning, because under the stewardship of the Prime Minister—well, the Australian people have seen it. They saw him fall off the stage, and then he said he didn't fall off the stage. But then comes the real bite.
Then he says he's not going to introduce this range of taxes, and he does so. It's like this here—and it's another example—with the Chubb review. Recommendation 11 of the Chubb review was the only recommendation which went to issues around native title.
Recommendation 11 only proposed that project proponents be prevented from conditionally registering projects prior to obtaining the consent of eligible interest holders. The review did not recommend an expansion of eligible interest to cover mere claims to native title. In fact, the review only went so far as to state: Proponents, in keeping with current industry best practice, should consider the need for, and the benefit of, consent from not only Native Title holders but also Native Title claimants.
The legal realities of expanding the native title regime are unclear at best. As a matter of fact, I think you're going to make things so much worse it's not funny. It's funny, when we had the departmental briefing and we asked questions about this, no-one could see that this would do anything else but make the regime more complex.
According to the Indigenous Carbon Industry Network, who support this bill and have met personally with the assistant minister, 11 per cent of Australia's landmass is currently under a native title claim, awaiting a decision to be made by the Federal Court as to the area's native title status. Thirdly, these changes throw up a range of complicated logistical questions for project proponents.
In their submission to the prior consultation process on this bill, the National Farmers' Federation recommended the government replace the regime proposed in this bill and instead opt for a right-to-negotiate-style process similar to that applied under the future acts regime. The NFF's evidence is particularly compelling. They found that negotiations underway under the current regime are already too difficult, too protracted and not conducted in good faith.
For example, they point to reports of landholders having to pay money upfront simply for an initial sit-down meeting with an eligible interest holder. Worryingly, the NFF states that such events are not isolated but rather reflect a pattern of behaviour experienced by the sector nationwide. The NFF's position that the ACCU scheme should not convert a prospective claim that has not yet been formally determined into an indefinite consent right is strongly made and strongly backed by the coalition.
The NFF is not alone in raising concerns about the proposed expansion of native title. AgForce Queensland, which represents 6,000 farmers who manage a combined 55 million hectares of land, argue that the proposed changes 'risk creating substantial uncertainty' which 'significantly increase project establishment costs, transaction complexity and delays for agricultural producers'.
The energy industry has also raised concerns about the practical application of these changes. Woodside Energy has similarly raised concerns with the government's proposal, stating that the change may cause investment uncertainty which may reduce and delay ACCU supply. While expressing in-principle support for generally strengthening Australia's native title regime, AGL Energy have advised the government of issues around implementation.
AGL have sought advice on how overlapping or competing claims to native titles would be resolved. Importantly, AGL have sought additional advice from the government as to how this native title expansion would support sufficient consent processes while at the same time maintaining timely project delivery. Mr Hamilton interjecting— Mr TEHAN: Thank you, Member for Groom.
Finally, the Business Council of Australia has also raised concerns around the proposed native title expansion. The BCA have warned of unintended consequences with the proposed changes, stating that the bill ought to include 'specific guidelines for clear evidence requirements, standard forms of service level timeframes to minimise registration delays and uncertainty in the consent process'.
The opposition is concerned that expanding native title in this way would unleash more recalcitrant activists and lawyers to sabotage good faith negotiations and delay the delivery of carbon abatement projects. This would unleash a new wave of lawfare in Australia. This would cost a fortune, pit Australians against Australians and not deliver the environmental outcomes the government purports to want to achieve through this bill.
This element of the bill alone requires much deeper industry engagement and public ventilation. It should go to a Senate committee where senators can hear further from farmers, legal experts, industry and other interested groups. I'm now going to turn to the lease cost tests.
The bill contains a 'blink and you'll miss it' change: the removal of the least-cost test. But I can tell you I think the Minister for Climate Change and Energy had his eye on this from the word go. Under the current act, the government can purchase carbon credits with regard to whether that purchase is being conducted at least cost to achieve carbon abatement.
In effect, the act requires the government to purchase carbon credits without having an undue financial impact. That is entirely appropriate and prudent. But Labor wants to remove the least-cost test of paragraph 20G and replace it entirely with an opaque value-for-money test instead.
Minister Bowen has been called 'Minister Blowout Bowen', and what we can see here again is that this is going to blow the budget. But I don't think there is a care in the world for value for money in the Minister for Climate Change and Energy's DNA. I really don't.
He is happy to throw taxpayers' money at everything and anything, waste taxpayers' money on everything and anything, and this bill is no different. That's why he's going away to this very opaque definition of taking the least cost, which compels the government—and the government shouldn't be doing this in the first place—to pursue least cost for a value for money.
We've seen the Minister for Climate Change and Energy think there's value for money in spending taxpayers' money, $150 million, to go on a holiday to Fiji and Tuvalu where no-one's going to turn up. That's what he thinks is value for money. We have to stick with least cost.
Instead, the bill's accompanying explanatory memorandum states that the two factors the government would have to have regard to when purchasing carbon credits—and as I've said, they shouldn't be doing it full stop—are (a) whole-of-government emissions reduction and net zero strategies and (b) environmental, social, economic and First Nations cultural benefits.
This is deeply unacceptable. Let's be clear: the only consideration the government should have in its mind when buying carbon credits is what impact it will have on the budget. Let's be even clearer: the government shouldn't be doing it in the first place.
Establishing exactly what the value for money is would be very difficult to prove, especially when it comes to the Minister for Climate Change and Energy. The government's famed avoidance of transparency does not make this a positive change. We don't know what the cost of the Capacity Investment Scheme is.
The Rewiring the Nation fund is a mess, with at least a $1 billion blowout and more happening right before our eyes. As a matter of fact, the blowout is getting so big that even Premier Carroll in Victoria had to pull the Western Renewables Link because even he—under, I must say, a fair amount of political pressure—realises this scheme is just ballooning. The Cheaper Home Batteries Program has gone from $2.2 billion to $8.5 billion.
Three regional hydrogen hubs have collapsed with taxpayers out of pocket and, well, here it is: $150 million set aside for COP, $6 million alone set aside for hotels in Fiji, and no-one's attending. As I understand, the Turkish government are now looking and saying, 'We want everyone coming to our leaders meeting.' Minister Bowen, all your advocacy for leaders to attend yours—and guess what the Turkish government have also said?
In the end, who has the final say? Who has the final say? They've got the pen, and they're going to have the final signature.
And guess what's happening to Minister Bowen? He's just been pushed to the sidelines. Mr Hamilton: El Presidente!
Mr TEHAN: El Presidente is getting pushed to the sidelines! We could have so much fun with that. We would be here all night.
Mr Hamilton: We'll have a whine later on! Mr TEHAN: Yes, we'll have a wine later on! The bill would enable the incredible espouser of taxpayer money, the Minister for Climate Change and Energy, to get his hands into the lolly jar to advance his net zero obsession.
That's not a positive thing in any way. The Business Council of Australia have stated: The concept should not be used (or perceived to be used) to differentiate between the abatement integrity of some ACCUs versus other ACCUs in the market … The concept of "lease cost" should remain as the foundation upon which "value for money" is applied … And that should be applied across the board when it comes to this government, but, sadly, it's not.
The Chamber of Minerals and Energy WA have stated: However, 'value for money' is not defined in the legislation … This could lead to unnecessary market uncertainty, which could be resolved by a clear statement of the parameters that will and will not be considered in determining value for money. Australian Energy Producers have stated: As currently drafted, the proposal lacks sufficient definition and guidance, creating uncertainty for ACCU market participants.
The proposal also departs from the core principle of lowest-cost abatement and should therefore clearly outline its policy intent and the extent to which departures from lowest-cost abatement are envisaged. Origin Energy have stated, 'We do not consider it appropriate or reasonable to introduce undefined and unlimited powers to purchase ACCUs for subjective "value-for-money" opportunities to support undefined policies.' To pre-empt an argument from the government that this change was recommended in the Chubb review, again, it simply was not.
The Chubb review only stated that the attribution of co-benefits required more integration within the ACCU scheme—for example, how a carbon abatement project might create additional jobs. The review was silent on how this ought to occur. In fact, the review only discussed the integration of co-benefits, one being driven by project proponents, not government.
Thus, the review states on page 29: To facilitate these outcomes, clear, consistent and easily accessible information on project characteristics is required. Proponents who claim a co-benefit should provide evidence and verification of co-benefits to the CER before they can be published. It is a clear perversion of the Chubb review to take from it the idea of an entirely new spending regime which would be under the control of the Minister for Climate Change and Energy to splash cash on carbon credits, with the only criteria being it has to marry up with Labor's net zero policies.
What could go wrong for the taxpayer given all this? So much that it's not funny. I ask the Albanese Labor government to remember: you have driven us to $1 trillion in debt.
Now, I'll turn to the new carbon methodology powers. Any law change which gives the Minister for Climate Change and Energy more unilateral powers to advance his net zero agenda will always be treated with the deepest suspicion by the opposition. And this is no different.
In the new division 2A, the minister would be allowed to make a method transition declaration in relation to a particular method where the method transition threshold criteria are met. Those criteria include whether the method presents a material risk to the ACCU scheme. Before making this declaration, various other criteria must be met or considered by the minister.
In simpler terms, the Minister for Climate Change and Energy would effectively be able to shut down any carbon abatement project he wants. It's unclear why the minister wants or needs these powers, and it was not established in the assistant minister's second reading speech. Because of what was used in that speech in terms of the Chubb review, given the leadership of the Prime Minister and his propensity to not be up-front and not be clear and to tell porkies, tell untruths and not be straight with the Australian people, my worry is, here, that we'll be told that it was the Chubb review that directly said that this was needed.
The National Farmers' Federation said the powers should 'be limited to genuinely exceptional circumstances'. Well, they shouldn't be given even that. The Carbon Market Institute warned that they 'undermine confidence and certainty for investors'.
It goes on and on. In recent developments concerning carbon credits, this bill was introduced prior to the proceedings on Thursday 10 September 2026. On that day, both the Senate and the House voted against the coalition's motions to disallow a carbon credit methodology—a native forest management method—that is hitting forestry jobs and communities very hard.
We all remember that, basically, the Minister for Climate Change and Energy was asked to specifically address all the forestry jobs that were going as a result of that, and he would not mention one single job. He wouldn't even mention what was happening. That is why this bill is being opposed.
I just want to quickly touch on our plan for affordable energy. We want to make sure that the government's Safeguard Mechanism goes. We want to make sure all of the government's carbon taxes go.
We want to make sure the government's agenda of shutting down the industrial capacity of this country goes. That is why the Safeguard Mechanism will go. For the reasons I've outlined—so many reasons why, and I've tried to outline as many as I possibly can—the opposition will be opposing this bill.
We do support the bill going to a Senate inquiry as we want to see the Minister for Climate Change and Energy explain why he's doing all this, because none of it makes any sense. I will be ensuring, if we can get it to a Senate inquiry, that there is an intense interrogation of why the minister wants to do this. I'll be formalising the concerns I've raised in my remarks by moving a second reading amendment to the question.
Accordingly, I move the amendment as circulated in my name: That all words after "That" be omitted with a view to substituting the following words: "the House declines to give the bill a second reading as it is of the view that: (1) the bill: (a) progresses the Government's failing net zero agenda; (b) increases lawfare, undermines responsible emissions reduction, and raises costs on industry; (c) repeals the 'least cost' test in favour of an opaque 'value for money' regime; and (d) hands the Minister for Climate Change and Energy new, unilateral powers on an unfounded basis; (2) the Government's deal in the Senate on Thursday, 10 September 2026, undermines the integrity of the Australian Carbon Credit Units Scheme; and (3) the Government must scrap its punitive carbon tax, the Safeguard Mechanism".
Something is always afoot when the coalition and the Greens hold nearly identical positions on bills. It is very rare, and it means that the government is doing something absolutely nuts, like we saw with the cap and the $750 million tax grab from our veterans, and like we saw in the Senate where the crossbench, the Greens and the coalition all voted to say, 'Don't do this.' But the government continues to blunder on.
I just make the point that that is what is happening here again, because, in so many ways, this bill is wrong. It will cause the taxpayer of Australia more pain. It takes the climate and energy minister's net zero green ideological approach even further.
It enables a precedent for new native title claims in this country. It means that the minister can interfere with projects that have already been put in place by landholders, to be able to access ACCUs. So, once again, I just sit here and think, 'Who dreamt this up?' It could only be someone with sheer incompetence, as the Minister for Climate Change and Energy has, who could bring a bill like this before us.
The DEPUTY SPEAKER ( Mr Boyce ): Is the amendment seconded?