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

Mr GREGG (Deakin) (13:09): A carbon credit is basically a promise. It's a promise that a project has cut greenhouse gas emissions—the release of gases such as carbon dioxide—or taken carbon out of the air and stored it. If the project meets the scheme's rules, it can earn Australian carbon credit units, usually referred to as 'ACCUs'.

Each credit represents one tonne of carbon dioxide equivalent—a way of measuring different greenhouse gases using the same scale. Those credits can then be sold to businesses or to the government. That gives farmers, First Nations communities and other businesses a way to earn money from work that helps reduce emissions.

But the whole system depends on what sits behind the credit. Was the benefit real? Was it extra to what would have happened anyway?

Does the amount claim match what the evidence supports? Selling a credit does not by itself reduce emissions. The work behind it must do that.

Someone buying a credit needs to be able to trust what they are buying. That is the starting point for this bill. It strengthens the rules behind the promise, it improves how the scheme is checked and it addresses practical gaps that have become clear through independent reviews and more than a decade of experience.

If I were still teaching law students how to read legislation, I would start with the question: what is the mischief? That's an old legal expression. It means the problem the law is meant to fix.

Then I would ask a second question: how do these words fix it? Those are useful questions for parliament too, because a law can sound impressive while doing very little. It can also create a lawyers' picnic—more questions, more arguments and more time spent working out what parliament meant.

The better approach is to identify the problem and give people a clear way to deal with it. This bill goes across several parts of our emissions-reduction laws. It strengthens consent, the agreement required from people whose rights are affected.

It improves independent oversight. It separates government buying from the work of policing the scheme. And it provides a carefully limited response where an existing carbon method develops a serious problem.

A carbon method is the rulebook for a type of project. It sets out how the carbon benefit is worked out and what must be measured and checked. Those rulebooks are central to whether the scheme can be trusted.

One of the clearest problems addressed by this bill concerns existing projects. Under the current framework, a method can be changed, withdrawn or allowed to expire, but existing projects can continue using their original method unless they choose to move on to another one. There is some sense behind that idea.

There is investment that goes into projects. People have taken a particular approach in good faith. But what do you do if there's a serious problem identified with that method?

This is where this law has an off-ramp. It provides an opportunity for a sensible, well-considered transition to a more reliable method rather than doubling down on silly or completely eroding good-faith investment. It gets the balance right.

It provides a way to address it. The minister can make what is called a method transition declaration, a formal decision requiring affected projects to move to a suitable alternative method if they're to keep earning carbon credits. This is an important power.

It deserves careful limits, and this bill provides them. First, the method must fail one or more of the scheme's integrity standards, the rules intended to make carbon credits trustworthy. Second, continuing to issue credits must pose a material risk to the scheme. 'Material' means significant enough to matter.

The power is directed at serious problems, not small errors with little or no real effect. The independent committee must advise that those tests are met. The minister must also be satisfied after considering the advice and public submissions, people's written views, from across sectors.

The decision must substantially reduce the risk. That matters. There is little point disrupting projects if the disruption does not properly address the problem.

There must also be a suitable alternative for every affected project. The projects must meet the relevant requirements under that alternative or be reasonably capable of being changed to meet them. The minister must consider likely harm to the environment, the economy and the community.

There is public consultation giving people a chance to examine and comment on the proposal. The committee's advice and the minister's reasons must be published. The declaration is also subject to parliamentary disallowance, meaning this parliament can overturn it.

Those are real safeguards. The power is not simply a minister saying, 'I no longer like this method.' There is a problem to establish, evidence to consider, people to hear from and conditions to meet. Some people will reasonably ask what this means for investment.

People developing projects want stable rules. That is understandable, but stability cannot mean that a serious fault must be left untouched. Imagine being a farmer doing the work properly.

You follow the rules. You measure carefully. You claim only what the evidence supports.

Then a serious weakness elsewhere in the scheme damages confidence in everybody's credits. That affects you too. Protecting trust in the scheme protects the value of sound work.

The answer is to provide a clear process for addressing serious faults while considering the people affected. That is what this bill seeks to do. It supports environmental work by protecting the link between the credits sold and the benefit delivered.

The bill also strengthens the rights of First Nations peoples in projects on native title land and land subject to registered native title claims. Native title means rights to land and waters recognised under Australian law because of First Nations peoples' traditional laws and customs. A registered claimant is someone whose claim has passed the legal steps needed for registration, even though the final decision on the claim is still ahead.

The bill recognises those claimants in the consent process. That matters because a claim can take significant time to be resolved. The people concerned should not miss their chance to have a say simply because that process is unfinished.

The bill establishes two stages of consent. Agreement to the application is required before the project can be registered. Agreement to how the project will be carried out is required before credits can be issued.

That distinction is practical. Agreeing to a proposal to enter the scheme is not necessarily agreeing to every detail of how it will operate on the ground. This brings the discussion forward.

Before expectations harden, before important choices are treated as settled and before credits begin to flow, early agreement provides a stronger basis for working together. It helps people understand the proposal, negotiate its terms and build partnerships. That is fairer.

It is also better project planning. The bill reforms the expert committee responsible for checking carbon methods. It becomes the Carbon Abatement Integrity Committee. 'Abatement' simply means reducing emissions or removing carbon.

That change goes beyond the name though. The bill strengthens rules about conflicts of interest where a person's other interests could affect their judgement. It sets out relevant fields of expertise and requires ongoing First Nations representation.

It expands the committee's work and strengthens its ability to obtain independent advice and information. It also provides more advice and related documents to be published with appropriate protections. The practical purpose is clear: give the experts the tools to do their job, make their role clear and let the public see more of the reasoning behind important decisions.

People do not need to agree with every decision to benefit from understanding how it was reached. There is another sound change: responsibility for government purchases of ACCUs would move from the Clean Energy Regulator to the department. The regulator is the body that checks and enforces the scheme's rules.

Government purchasing serves a different purpose. Separating those functions reduces the risk of an actual or perceived conflict. People should be able to see that decisions about whether credits meet the rules are distinct from decisions about which credits the government wants to buy.

The bill also replaces lease costs with value for money as a purchasing principle. The cheapest price matters, but price alone does not tell us everything about value. A project may provide other benefits for the environment, local communities or First Nations peoples.

This change allows those benefits to be considered as well. It does not mean accepting weak carbon claims because the project has other attractions. The carbon benefit still needs to stand up.

It means that when choosing what to buy government can consider more than the price on the page. The bill also improves the tools for dealing with credits issued on incorrect information. It provides new clear pathways to require credits to be relinquished—that is, returned—where too many have been issued.

There is also a voluntary path for people to address information they've got wrong. That is sensible. A scheme needs ways to deal with that wrongdoing.

It also needs ways to correct mistakes. The regulator gains further tools for lower level breaches, including infringement notices—formal notices that allow alleged breaches to be dealt with through a financial penalty. At the same time, the bill supports new work.

It makes room for genuine research and testing without automatically shutting the door to future participation in the scheme. That matters because we want people to improve methods, test new ideas, gather evidence and learn what works. We should not create rules that punish the very research needed to develop better projects.

The bill also allows methods to support both carbon storage and separate emissions reduction activities within a single project. That can better reflect how a farm or property actually operates. The law should be able to accommodate sound new approaches as they develop.

The bill also changes the National Greenhouse and Energy Reporting Scheme. That is the system through which companies report emissions, energy production and energy use. It creates powers to require more reported information to be published.

The detailed publication rules would be set through regulations—the rules made under the act. That means the bill does not itself publish every company's information tomorrow; it provides a framework for greater public access with the details to be worked through. The bill also closes a reporting gap where a company is late in applying to register.

Being late to register should not leave a hole in the information the scheme is meant to collect. Good policy needs sound data, and public trust is helped when people can examine more of that data themselves. Finally, the bill makes practical changes to dates under the New Vehicle Efficiency Standard.

That standard concerns emissions from new vehicles supplied to the Australian market. Suppliers have a period in which to address an emissions shortfall by earning or obtaining units under the scheme. The present sequence of dates does not work as effectively as intended.

The bill adjusts the timing so the processors can operate properly. It does not change the main emissions limits or which vehicles are covered. It fixes the timetable.

Sometimes good lawmaking is exactly that practical—identify the part that does not line up, correct it and give the people following the rules a process that works. That is a clear theme through this bill. Credits should reflect real work, people whose rights are affected should have a meaningful say, experts should have the tools to check the evidence, and government should be able to address serious problems through fair and clearly limited process.

These reforms strengthen trust while making room for sound projects, better research and more effective administration. The promise behind carbon credits matters to the person earning it, to the person buying it and to the country relying on it. This bill strengthens that promise.

I commend this bill to the House.