Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
Dr HAINES (Indi) (19:05): I rise to speak on the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026. Australia's carbon credit system provides a framework through which individuals, businesses and communities can undertake emissions reductions projects and be rewarded by earning Australian carbon credit units, or ACCUs, for every tonne of carbon-dioxide-equivalent emissions that is avoided or stored.
It plays an important role in our progress towards lowering emissions, and it presents unique opportunities for farmers and regional landholders to participate in and benefit from the energy transition. The debate has moved on from whether carbon markets should exist. The reality is that they do and they must.
The question is how to ensure they operate with the integrity, the transparency and the accountability that's required. Carbon markets have the potential to support regional economies, reward good land stewardship and provide additional income streams for local farmers and businesses. The landholders I speak to want to play their part in reducing emissions.
They're ready to harness these opportunities, but they can't get there alone. It's why I fought so hard for sustainable agricultural facilitators, and it's why I support measures to improve the integrity of the ACCU framework. Regional communities deserve a carbon market that they can rely on, that they can trust, that they can be proud of.
Much of this bill responds to recommendations arising from the Independent Review of Australian Carbon Credit Units, better known as the Chubb review, and reviews conducted by the Climate Change Authority. Those reviews identified a number of improvements to strengthen the integrity, transparency and administration of Australia's carbon credit scheme. Evidence based policymaking is not just about commissioning reviews and gathering information; it requires governments and parliaments to act in response to what's been learned.
In that sense, this bill is walking the walk. The bill makes a number of amendments to improve the transparency, integrity and effectiveness of the ACCU scheme. It renames and reforms the independent statutory committee, which will be known as the Carbon Abatement Integrity Committee, allowing it to advise on method development priorities, review methods before they expire, seek independent advice, undertake longer public consultation and publish more of its work.
The committee's governance and composition will also be improved through better conflict-of-interest requirements and greater clarity about the kinds of expertise its members should have. The bill facilitates investment in research and development by relaxing 'newness' requirements that have inadvertently penalised early operations and failed to accommodate the stop-start nature of iterative projects.
The bill also makes important changes to consent requirements for projects on native title land. It replaces the existing system of conditional registration—which the Chubb review found was at odds with the principles of free, prior and informed consent—with an upfront, two-stage consent process that requires proponents to engage with native title holders and claimants before projects are registered.
This allows for earlier, more genuine negotiations and gives all participants more certainty about what best practice actually looks like. In addition, the bill amends the National Greenhouse and Energy Reporting Scheme to allow additional information to be disclosed under the regulations. One of the key measures in this bill is the minister's ability to make method transition declarations, which prevent the ongoing issue of ACCUs if they are based on methodologies that don't stack up.
Now, this is important because the value of carbon markets depends entirely on the integrity of the carbon credits. When an ACCU is issued, it must represent genuine and additional reduction or abatement. To make a declaration, the minister must be satisfied that a method no longer complies with the offset integrity standards and that its continued use would pose a material risk to the integrity of the ACCU scheme.
The minister must seek advice from the independent committee on these matters, and the committee must consult publicly before providing that advice. Once the initial threshold is met, there are a number of other conditions that must be met, including the availability of suitable alternatives for all affected projects and various matters that the minister must have considered.
And the minister must undertake separate public consultation before deciding to make a declaration. Once the declaration is made, the relevant methodology becomes superseded and within a specified time frame cannot be used to earn any further ACCUs. Critics of these declarations say they reduce certainty for participants and investors—and they're right; it does create uncertainty if approved methods can be taken away again in the future.
I'm sympathetic to the argument that the time to assess the integrity of methods is when they are first approved. Ultimately, that's the system we're working towards. But the reality is that the science is still evolving, and it's appropriate to ensure that we have mechanisms to protect the integrity of the scheme when it becomes apparent that we need to.
The provisions of this bill include additional limitations and safeguards that were not in the exposure draft, which have been welcomed by proponents and other market participants. And the assistant minister has confirmed that declarations are intended to be used as a circuit breaker in exceptional circumstances and not as a tool for routine intervention. However, other stakeholders question whether the power is in fact too limited and conditional to serve its purpose.
For example, method transition declarations can be made only if the minister is satisfied that an alternative method exists for all affected projects. This protects projects that were commenced in good faith, but it does create a paradox whereby the most-problematic methods—the ones without any credible equivalent—might not be subject to a declaration, because they are such outliers.
I note that the member for Mackellar has put forward amendments that respond to this very issue and that make other changes to preserve the integrity of the declaration regime, and I'll support those amendments. I've put forward amendments myself to recognise the unique risks to agricultural productivity and domestic food security that are posed by substandard methods.
Many offset projects take place in high-rainfall, high-biomass areas that overlap with productive agricultural land. These areas in fact look a lot like parts of my own electorate, where reliable rainfall, productive soil and established natural assets provide ideal conditions for both primary production and carbon farming. The ability to earn ACCUs for offset projects obviously changes how landholders assess all their options.
Most of the time it's simply a matter of opting in to gain some extra productivity. Carbon sequestration and agricultural production coexist peacefully and are often mutually beneficial, improving production of the land. However, in some instances there's an unavoidable trade-off.
Where ACCU-earning projects displace agricultural production, it's especially important that the underlying methodologies are sound. There must be a real environmental return on the loss of agricultural capacity. Choosing to participate in carbon projects instead of farming is a significant decision.
Landholders need confidence that they're opting into a system with high standards, strong oversight and genuine return on investment. Low-integrity offset methods pose unique risks to Australia's agricultural productivity and domestic food security where they incentivise land use changes that aren't supported by credible evidence. This can lead to overconversion of land, avoidable path dependence and reputational damage, not just to the carbon economy but to landholders participating in good faith.
Most projects are long term, and land is finite, so these risks indeed compound over time. When deciding whether to make a method transition declaration, the minister should be required to consider the individual and cumulative risks to agricultural productivity and domestic food security as well as the effect that making the declaration would have on those risks.
I'd like to thank Farmers for Climate Action for their work on this issue and acknowledge their tireless advocacy on one of the most significant challenges facing Australian agriculture and regional communities: climate change. Farmers are committed stewards of the land. They have much to lose from unmitigated climate change, and they are critical to the success of the ACCU scheme.
The reforms before the House are not perfect, but they are largely a step in the right direction. Public trust requires ongoing scrutiny, regular review and a willingness to make improvements where they are needed. I support this bill and I'll support further refinements in future if they are warranted.