Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
Mr FRENCH (Moore) (10:44): I rise to support the Carbon Credits and Other legislation Amendment (Integrity and Transparency) Bill 2026, and I accept from the outset that the title of this bill is not exactly going to pack out the pub on a Friday night. If you walked into your local and said, 'Who wants to chat about methodology determination, sequestration offset projects and the National Greenhouse and Energy Reporting Scheme?' I suspect you would suddenly find how quickly Australians can finish a drink.
But underneath all the acronyms, all the technical language and all the legislative machinery, this bill is about something very simple: if we are going to put a value on cutting carbon pollution, we have to be confident that the reduction is real. That is what integrity means. We need to know what has been done, we need to know who has done it and we need to know how it has been measured.
If someone receives a carbon credit for reducing emissions then that credit needs to actually represent a reduction in emissions. It sounds obvious. But, as anyone who's spent any time around regulation knows, sometimes parliament has to pass quite a lot of pages to achieve something that can genuinely be explained in one sentence.
So let us start at the beginning. The Australian carbon credit unit, or the ACCU, generally represents one tonne of carbon dioxide equivalent that has been avoided or removed from the atmosphere. Think of it as a little like a certificate.
A farmer might undertake a project that stores more carbon in the landscape. Another project might reduce methane. A landholder might regenerate vegetation.
Different projects work in different ways. But if they satisfy an approved method that can demonstrate genuine abatement, they can earn carbon credits. Those credits have value.
They can provide income for farmers, First Nations communities, landholders, businesses and other organisations undertaking emissions reduction projects. They can also be used by large industrial facilities under the safeguard mechanism while those facilities reduce their own emissions over time. The scheme does two jobs.
It creates an incentive to undertake emissions reduction projects. It gives hard-to-abate industries some flexibility while new technology is being developed or installed. That is why the quality of the credit matters so much, because a carbon credit is ultimately a claim.
It says that one tonne of emissions has been avoided or removed. If that claim is reliable, the credit has value. If that claim cannot be trusted then we have a problem.
You do not need a degree in climate science to understand that. I was an electrician before I came here. In the electrical industry, if someone signs a certificate saying that work complies with the rules, people rely on it.
The customer relies on it, the network relies on it, other trades rely on it and, most importantly, the next electrician who opens a switchboard relies on it. You cannot have a system where everybody just says, 'Near enough; probably complies.' That is frowned upon in electrical work—usually for fairly obvious reasons. The same principle applies here.
If Australia is going to have a carbon crediting scheme, the units issued under that scheme have to be credible, and that is what this bill strengthens. The ACCU scheme has now been operating for more than a decade. It has been examined through the independent Chubb review and through several reviews by the Climate Change Authority.
Those reviews found a scheme with sound foundations, but they also identified areas where governance, transparency and administration could be strengthened. The government listened. This bill makes those improvements, and one of the most important of them involves First Nations consent.
Under these reforms, registered native title claimants will be recognised as eligible interest holders. And for relevant projects on native title or claimed native title land, consent will be required at the beginning of the process, rather than leaving people to discover that a project involving their land has already progressed substantially. There will be a two-stage process: consent to the project being registered, then consent relating to how the project will actually be carried out.
This is a pretty straightforward proposition. If somebody intends to establish a carbon project on land over which Aboriginal and Torres Strait Islander people hold or claim native title rights and interests, those people should have a meaningful say before the project gets under way—not afterwards, not after the contracts have been signed, not after commercial expectations have been created but beforehand.
The bill also improves the body responsible for testing the integrity of the carbon crediting method. The Emissions Reduction Assurance Committee will become the Carbon Abatement Integrity Committee. I admit that, once again, Canberra has demonstrated a unique ability to make a rebrand of a committee name sound like an episode of Utopia!
But the change behind the name is important. The committee will have stronger governance arrangements, broader expertise, stronger transparency requirements and expanded functions. It will have an important independent role in assessing whether methods used to generate carbon credits meet Australia's integrity standards, because method matters.
If I claim to reduce 10 tonnes of emissions, the obvious questions are: How did you work that out? What assumptions did you use? What did you measure?
What would have happened without this project? How long will carbon remain stored? These are not side questions.
They are the entire basis for determining whether a credit is genuine. And sometimes knowledge changes. Evidence changes.
A method that appeared sound at one point may later develop a serious integrity problem. At present, there can be circumstances where an old method continues to be used by existing projects even after significant concerns emerge. This bill introduces what is called a method transmission declaration—again, a magnificent name.
The idea is simple: if a method develops such a serious integrity problem that continuing to issue credits under it could threaten confidence in the entire scheme, there needs to be a circuit breaker. Returning to the electrical example, if we discovered tomorrow that a particular testing method could not reliably tell us whether an installation was safe, nobody would seriously suggest, 'Well, we've been using it for a few years, so we might as well just keep issuing the certificates.' You fix the method, and that is what this mechanism allows.
Importantly, this is not an arbitrary power. It is designed for exceptional circumstances. There are legislated thresholds.
There must be independent advice. There must be public consultation. The minister must consider the impact on existing projects.
If the relevant advice and reasons must be published, the explanatory material describes significant safeguards around this power, including advice from the independent committee and public consultation before it can be used, and that balance is important. We need to protect investors from arbitrary rule changes, but investor confidence also depends on the market itself being credible.
There is not much comfort in saying your credits were issued under stable rules if nobody trusts the credits. Integrity is not the enemy of investment. Integrity is what makes long-term investment possible.
The bill separates two jobs that should sensibly be separated. At present, the Clean Energy Regulator has responsibilities connected with both regulating the scheme and government purchasing of ACCUs. This bill transfers government purchasing responsibility to the secretary of the department—in other words, we separate the buyer from the regulator.
That is just sensible governance. You do not generally want the umpire running the TAB at half-time. The bill also changes the purchasing principle from simply seeking least-cost abatement to seeking value for money, and that distinction matters.
Cheapest is not always best value. Every household understands that, every small business understands that, and every government procurement officer certainly understands that—usually through a document approximately the size of what we formerly knew as a telephone directory. But value for money allows government to consider not only the price of carbon abatement but potentially other benefits associated with a project, and that might include benefits for biodiversity.
It might include regional economic benefits. It might include benefits for First Nations communities. The carbon reduction still has to stack up, but government does not have to pretend that the price is the only thing that exists.
The bill also strengthens compliance. The fit-and-proper person test will extend more broadly, including to agents acting for project proponents. The regulator will have improved enforcement tools.
There will be infringement notices for lower level breaches, and there will be stronger mechanisms for requiring ACCUs to be relinquished where too many credits have been issued. Again, strip away the jargon and this is easy to understand. If someone was credited 10 tonnes of abatement but updated information establishes that only eight tonnes were actually achieved, we cannot just shrug and leave 10 credits circulating.
Two need to come back. Carbon credits are not frequent flyer points, where an administrative error becomes a permanent bonus. If the abatement did not happen, the credit should not remain in the system.
At the same time, the bill allows proponents to voluntarily correct genuine mistakes. That is good regulation. There must be consequences for wrongdoing, but a well-designed scheme should also make it easy for people acting honestly to identify an error, correct it and move on.
The bill also encourages research and development. That is particularly important because climate technology is moving quickly. We want people experimenting with better ways to reduce emissions.
We do not want the rules inadvertently punishing them for doing research necessary to develop a new method, so this bill adjusts the so-called newness requirements to better accommodate legitimate research and development. It also creates more flexibility for projects to combine different kinds of emissions reduction activities. For example, a future project could potentially combine storing carbon through regenerating native forests with reducing methane emissions from livestock.
That would mean greater flexibility for landholders and more room for innovation. Then we come to the National Greenhouse and Energy Reporting Scheme, the NGER. This is Australia's national framework for reporting information about greenhouse gas emissions, energy production and energy use.
This bill provides for greater transparency by allowing regulations to require publication of more information submitted through that scheme. That matters because good climate policy depends on good information. You cannot manage what you cannot properly measure.
If significant emissions data can appropriately be made public, there is a strong argument that greater transparency improves accountability and confidence. This bill also tidies up some compliance and administrative gaps. Finally, we come to the new vehicle efficiency standard.
Now, I know merely mentioning vehicle efficiency in this chamber can occasionally cause some people to behave as though Canberra has arrived at their driveway at midnight to confiscate their ute, so it is still worth being very clear about what this bill does. It does not change the headline emissions limits. It does not change which vehicles are covered.
It adjusts some dates. That is it. There is a timing alignment in the legislation affecting when vehicle suppliers calculate and reconcile their obligations.
Industry asked for certainty. Industry was consulted. The dates have been fixed so the scheme operates as originally intended.
The proposed changes move several reconciliation and unit expiry milestones without altering the underlying standards. Not every measure on climate legislation needs to become a culture war. Sometimes a date is simply a date.
This whole package has been extensively consulted on. The exposure draft was released in April. The department received 73 individual submissions and consulted project proponents, carbon service providers, First Nations organisations, governments, industry bodies, NGOs, investors and academics.
The changes were made as a result, and that is exactly how legislation should develop. Consult, listen, identify practical problems, amend the proposal, bring the improved version to parliament. There will always be people who approach carbon credits from opposite ideological positions.
There are some who hear the words 'carbon market' and reject the word 'carbon'. There will be others who hear the words 'carbon market' and object to the word 'market'. The rest of us have to deal with the system that actually exists, and we have to make sure it works.
If carbon credits are going to be issued, they should represent genuine emissions reduction. If companies are going to rely on them, they should be able to trust them. If farmers and landholders are going to invest in projects, they deserve stable and credible rules.
If projects affect native title rights and interests, First Nations people should be involved properly and early. If public data can be reasonably made more transparent, it should be. If a rule is discovered to be defective, government must have a careful, transparent and reviewable way of fixing it.
That is not radical climate policy; it is competent administration. Australia's carbon market will only ever be as strong as the confidence people place in it. A credit must mean something.
The methodology behind it must stand up. The regulator must have the tools to enforce the rules. The public should be able to see enough of the system to have confidence that it is doing what we claim it is doing.
That is what integrity and transparency look like in practice. It might not make carbon accounting the hottest conversation at the local pub, but it does make Australia's carbon market stronger, fairer and more credible. For this reason, I commend the bill to the House.