Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026

Mr FARLEY (Farrer) (11:13): I second the motion. I'd like to start with a question because I think it cuts through everything else we're about to debate: if you found out that up to 70 per cent—or more—of the Australian Carbon Credit Units under the three dominant methods backing Australia's climate strategy might not represent a single, genuine tonne of avoided carbon, would you fix the paperwork or would you fix the problem?

That's exactly what's in front of us today. The amendment chooses the paperwork. They've called it the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026—the integrity transparency bill.

I want you to sit with that for a second. It is, frankly, one of the most audacious pieces of branding I believe this parliament has seen. It is a bill named for two things that its own record shows the scheme has never reliably had.

Let's be honest about how we got here. This isn't a routine tidy-up of a functioning market. It's damage control.

It exists because the man who ran the government's own integrity committee for 6½ years, Professor Andrew Macintosh, turned around and told the country that what we'd been overseeing, in his words, was a fraud on the environment. Macintosh is not a critic on the sidelines; he's the inside man, the whistleblower of the Australian carbon policy, standing up and saying, 'I watched this happen and it isn't real.' What did the evidence show?

People were being paid for not clearing forests that were never going to be cleared, landfill operators were collecting credits for running generators they would have run anyway, and the human induced regeneration, the single largest category of credits this scheme has ever issued—42 million hectares, receiving 45 million ACCUs—was investigated by the ANU researchers in 2024.

They found that most of the sampled projects didn't even comply with their own basic regulatory requirements and showed negligible real increases in tree cover for all that money and for all those credits. So the entity responsible for issuing the credits investigated itself, commissioned a review and found itself blameless. Meanwhile, new projects were banned in October 2023, but existing projects kept generating credits.

This is not a hypothetical risk we're being asked to legislate against; this is what's already happened, and at scale. It has public money and other countries' trust in our national commitment riding on it. So what does this bill do about that record?

Let's go through it point by point. The details matter more than the 'integrity and transparency' title. It does not touch a single credit already issued.

Every dubious ACCU sitting in the account right now—the ones tied to forests that grow nowhere and the ones tied to generators that run anywhere—remains exactly where it is: fully valid and fully tradable. The bill has no memory. It starts today and forgets everything that came before it.

When it finally does catch up with a bad method, it lets it keep running. Under the bill's new integrity risk method declaration, a method the government itself has just found doesn't meet its own integrity stands, and it keeps issuing credits for up to two more years if it's an avoidance project and up to five more years if it's a sequestration project—five years!

We will have identified the problem and then licensed it to continue. Even getting to that point is deliberately difficult. The system is so designed that, before the minister can act, they need committee advice, a full public consultation process and proof that the alternative method already exists and is workable.

Every one of those steps sounds reasonable in isolation, but, if you stack them together, they're a machine built to produce inaction. This is not a safeguard; it's a mechanism of last resort by the government's own description, which is a polite way of saying it's a lever that never gets pulled. And who checks the checker?

The new Carbon Abatement Integrity Committee is advisory only. The minister keeps the final say. There is no clear process for outside groups to take the flawed decision to court.

They are the same groups who caught the problem in the first place, and we're being asked to trust the very apparatus whose failures created this crisis, with no independent avenue for anyone to knock on if it fails again. They've given the public three weeks to respond to it—three weeks to scrutinise the first rewrite of a law in over a decade, a law with sweeping consequences for native title holders, for safeguard mechanisms compliance and for every polluting facility in this country using these credits to claim they've hit their targets.

This is not a consultation; it is a formality with a deadline attached. Native title protections don't even apply to what's already in the pipeline. Every project already registered or in train continues under the old weak consent rules.

The stronger protections only bite on applications lodged after this bill passes, which means the very projects most likely to have proceeded without proper consent are precisely the ones that this bill leaves untouched. Quietly buried in the purchasing provisions, they've swapped least-cost abatement for value for money. That sounds harmless until you realise what it does.

It removes the one plain, measurable yardstick the public had for judging whether government carbon spending was efficient and replaces it with a phrase flexible enough to justify almost any purchasing decision on almost any ground, and with far less scrutiny. Colleagues, put all that together and here's what you get: better minutes, better committees and better paperwork.

There's not one structural change that answers the actual scientific complaint that has been sitting on the table since 2022: that these credits, in large numbers, may simply not represent real additional emissions reductions. I'll say the quiet part plainly. This bill treats a credibility crisis as an administrative one.

It polishes the brass on a ship that critics—including the man who used to captain its integrity committee—say is taking water below the line. Here is why that should frighten every one of us, regardless of which side of this chamber we sit on. The markets don't collapse gradually and then suddenly.

They collapse suddenly, full stop, when confidence breaks. Enron didn't lose 10 per cent of its value a year over a decade. It went from a market darling to worthless in a matter of weeks, because, the moment the people stopped believing the numbers were real, there was no floor underneath them.

Carbon credits, by their very nature, are priced on a story about what would have happened, and that is a soft number. Soft numbers don't fail quietly. When a court or a regulator, or another peer-reviewed study, puts hard figures on how much of this scheme was never real, we will not get a gentle correction.

We'll get a stampede. The buyers will flee, the prices will crater and every company, every facility and every government contract that leaned on these credits to claim compliance will be exposed all at once. This bill—the amendment—does not prevent that day.

It just delays the reckoning and dresses it up as a reform. So I say to this chamber: don't vote for the title; vote on what is actually in the text. And what's actually in the text is a bill that protects every credit already issued, gives newly condemned methods years to keep operating and buries its own enforcement power under so many preconditions that it may never be used—and it hands the public three weeks to catch any of that.

That's not integrity. That's not transparency. That is a scheme protecting itself from the people it's supposed to answer to.

Vote it down, send it back and tell the drafters, 'Fix the science before you touch the paperwork.' I second the amendment as circulated.