Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
Ms STEGGALL (Warringah) (18:39): I rise to speak on the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026. This legislation goes to a fundamental question: can Australians trust that the emissions reductions being claimed by the government through this legislation are actually happening? Remember that, many times, these claimed reductions through carbon credits and other schemes are what have been used to justify the continued approval of coal and gas projects—in particular, new ones.
Whilst members in this place have listed the achievements and commitments that the government has made, they certainly do not continually also list the over 37 projects that have been approved under the Albanese government's watch. That takes us to why it is important that the carbon credits system be robust and work. Every carbon credit used to offset climate pollution carries a promise that somewhere an equivalent amount of greenhouse gas has been avoided or removed from the atmosphere to counter the other effect.
If that promise is not kept, the pollution continues and climate risks escalate and grow. Communities and households concerned about insurance costs, businesses investing in decarbonisation and farmers doing the hard work of restoring their land all deserve a scheme whose environmental claims stand up to scrutiny. For a business deciding whether to invest in cleaner equipment or buy credits, the rules shape where its money goes.
Investors, businesses and landowners need confidence that the credits being traded represent real value and real decarbonisation. If confidence in the market is undermined, legitimate projects and responsible participants will suffer. During the debate on the safeguard mechanism in 2023, I argued that emissions from our biggest polluters must come down and called for much stronger methane monitoring and reporting.
Three years on, that has still not been actioned by the Albanese government, but those principles remain essential. Our largest emitters must invest in reducing their own pollution, using credits to address residual emissions that are difficult or impossible to eliminate. Carbon credits must not become an excuse to postpone that investment or expand fossil fuel production while claiming progress towards net zero.
Nevertheless, there are worthwhile reforms in this bill. I welcome stronger consent requirements for native title holders and registered claimants and the requirement for Aboriginal or Torres Strait Islander representation on the integrity committee. That stronger consent really must represent informed consent, to make sure that there is proper disclosure of information to all Aboriginal and Torres Strait Islander peoples impacted by projects.
Strong consent processes are essential, but consultation alone is not enough. Carbon projects should deliver benefits for country, biodiversity and local communities alongside carbon outcomes. First Nations people should be partners in the design, governance and delivery of projects that affect their land and waters.
Transferring responsibility for future government carbon credit purchasing away from the Clean Energy Regulator is also sensible. It helps separate purchasing decisions from regulation. Stronger powers to correct overcrediting and publish emissions information are welcome.
The changes to the new vehicle efficiency standard also address a timing problem in its compliance arrangements. These improvements deserve support, but the government must also confront the scheme's harder integrity problems. The first is the strength and independence of the proposed Carbon Abatement Integrity Committee, or CAIC.
Renaming the existing committee and broadening its functions will achieve very little unless it has the resources and authority to challenge the assumptions behind the credits being issued. At its core, integrity means that a carbon credit represents a real climate benefit: a lowering of climate pollution. That requires projects to be additional, meaning that the activity would not have happened anyway.
It requires permanence so emissions reductions are not later reversed—it must be permanent climate pollution reduction. It requires safeguards against leakage where emissions are simply shifted elsewhere. And it requires accurate crediting so one tonne of claimed abatement genuinely reflects one tonne of climate pollution benefit.
Under proponent-led method development, commercial participants help design methods from which they may benefit financially. Their expertise is valuable, but their incentives make independent scrutiny essential. Climate Integrity's submission identifies practical reforms that the government should adopt.
The committee needs its own scientific capacity to test those proposals, examine the underlying evidence and commission independent assessments. It must be able to recommend rejecting a method where the evidence shows it could award more credits than the emissions reductions would, in fact, justify. Where evidence is uncertain, we should take a cautious approach to awarding credits.
Australians should be able to understand why a method has been approved and what would trigger a review. Stronger safeguards against conflicts of interest are also needed. I support a five-year restriction on former committee members taking paid roles in carbon credit trading, project development and related advisory work.
Conflicts should be publicly disclosed. The evidence behind crediting decisions should be available for scrutiny, with clear limits on claims of commercial confidentiality. The committee should report annually to parliament on integrity concerns and any ministerial decisions that depart from its advice.
That would help ensure emerging problems are addressed promptly. The second issue I want to raise is how projects move away from methods with serious integrity problems. The bill introduces a method transition declaration to help move affected projects onto another method.
That is sensible in principle, but the protection must be clear. The change must improve integrity. If a project has received credits for carbon savings it cannot demonstrate, if it can't show a reduction in climate pollution0, moving it into a different method does not make that problem disappear.
This is critical, particularly for projects intended to regenerate native forests through changes to land management. Research has raised serious questions about whether some projects are, in fact, delivering the additional forest growth claimed. Those findings are contested, and the regulator defends its checks.
That makes independent assessment and access to the evidence all the more important. I call on the government to put a clear protection against backsliding in the legislation. Any transition should face independent scrutiny, with excess credits identified and corrected and being required to be returned where appropriate.
Another side where the system is failing in integrity is around methane pollution that is not properly counted. Accuracy in measuring the pollution that companies are responsible for has to be the starting point for this to have any credibility. We know methane escaping from coal, oil and gas operations is a particularly powerful driver of warming in the near term, in the first 20 years.
Gaps in its measurement and independent verification risk understating the pollution entering our atmosphere. Remember, every time a question is put to the government as to justification for approving a new fossil fuel project or gas project, we get the answer that that is taken care of through the safeguard mechanism, which then relies on the offsetting through ACCUs.
None of that stacks up with any credibility if we are not properly measuring the actual emissions that these projects represent. I've previously called for fossil fuel companies to properly measure their methane emissions and make that information public. Australians are entitled to independently checked figures that they can trust.
Underreported emissions not only means deceiving the public for the emissions but also that the government is deceiving the international community as to the current and true state of emissions. Overstating carbon savings and understating pollution both allow polluters to avoid responsibility and the government to fool and, I think, defraud the rest of the world.
Australia's climate policies must address both. Proper investment in monitoring infrastructure, combining satellite observations with measurements on the ground—when those measurements tell a different story from a company's report, the discrepancy in methane emissions must be investigated and resolved. Verified emissions data must inform what companies are required to do under the safeguard mechanism.
Underreporting must be corrected, and the rules must be enforced. Accurate measurements also help identify where pollution can, in fact, be cut. Because that's the good news in all of this; there is plenty of technology and opportunity to cut methane pollution.
It is actually one of the lowest hanging fruits available to us. It beggars belief that the Albanese government has already sat on this for three years without doing anything about it, because this will drive action. Companies will fix leaks.
They will reduce emissions at their source. They will adopt the technologies that already exist and are available. The failure, of course, has consequences for people well beyond the carbon market.
Climate damage from pollution reaches into every household budget through insurance premiums, repair bills and the cost of rebuilding after disasters. It damages public infrastructure and puts our health and safety at risk. We need to start to talk about climate related inflation because, at the moment, that is a huge driver of the cost-of-living crisis that we have, yet no-one is actually acknowledging that part.
In Warringah we've seen the rapid rise of insurance costs due to increasing climate risk. In fact, over about the last five years, I believe, insurance premiums have increased by 50 per cent. It is one of the fastest growing inflationary measures of a household budget, whether it is home-and-contents insurance or full house insurance.
I've repeatedly called for greater investment in adaptation and resilience, with major polluters contributing to the cost. It is time polluters pay. The responsibility cannot keep falling on communities and taxpayers.
What happens when infrastructure fails is that local governments are left to pick up the bill, and that means they pass on that cost to local citizens and our communities. They have to pay for it through levies and greater rates. This week, I've launched a climate resilience green paper calling for a climate pollution levy on coal, oil and gas corporations to help fund climate resilience and preparedness.
Companies have profited from activities that drive climate harm. They should contribute fairly to protecting communities and helping them recover. It is time for polluters to pay.
That contribution would support practical action: safer homes, better urban infrastructure, nature based solutions that can help communities withstand the conditions ahead. But preparation alone is not sufficient. Efforts must be accompanied by faster cuts to climate pollution.
We need to reduce the harm while preparing for the risks already upon us. What's amazing is there is no other industry that we just allow to continue to pollute with impunity. We've dealt with that in so many ways, yet fossil fuel companies still enjoy a system where we allow them to pollute with impunity, with subpar processes of accountability.
For the people of Warringah, climate action and integrity have always gone together. This bill is an opportunity to strengthen both, but that requires independent oversight, carbon credits backed by evidence, and honest reporting of the pollution those credits are used to offset. So I urge the government to ensure major polluters take responsibility for their emissions and contribute fairly to the costs they impose on our communities.
Australians are entitled to expect that a bill promising integrity and transparency actually delivers that in practice. Finally, I think we have to be honest. There's a trust gap between what the Albanese government does here at home and what it says and commits to and the announcements it makes internationally.
Having attended pre-COP in Fiji and seen the commitment from the Prime Minister and the minister to our Pacific neighbours around caring for the dire straits they find themselves in—we have to have that accountability at home when it comes to the approval of more coal and gas and those extensions, because the reality is that we are putting fuel on the fire, we are making the situation worse, every time we approve another project.
You cannot just justify those decisions on the basis of the carbon offset scheme and the safeguard mechanism if that system does not have the integrity to genuinely show that there is real climate pollution abatement occurring through those offsets. So I urge the government to match their actions at home with the announcements and commitments they make to our Pacific neighbours.