2023 Review of the ACCU Scheme
The Climate Change Authority has released its fourth review of the Carbon Credits (Carbon Farming Initiative) Act 2011(Opens in a new tab/window) (CFI Act) which enables the Australian Carbon Credit Unit (ACCU) Scheme.
The authority’s review of the ACCU Scheme is required by law to be delivered by the end of 2023, as is the authority’s review of the National Greenhouse and Energy Reporting Act.
The authority took a broad look at the policy and its operation in the 2023 context: the Safeguard Mechanism will drive increasing private demand for ACCUs; Australia now has a net zero target and a strong 2030 target; international and voluntary carbon markets are evolving; and the Paris Agreement is well underway.
The ACCU Scheme was recently reviewed through the 2022 Independent Review of Australian Carbon Credit Units chaired by Professor Ian Chubb (the Chubb Review). The authority has built on this review, noting the government is still implementing many of the review’s recommendations.
The authority’s review puts forward 15 recommendations for the government to consider, relating to:
- While ambitious and urgent cuts to emissions are the priority, the Australian Carbon Credit Unit (ACCU) Scheme can help smooth the transition to net zero emissions.
- The ACCU Scheme is fundamentally well designed and the time is right to make some changes to ensure it remains fit-for-purpose.
- Greater transparency and more regular reviews of methods for calculating abatement will bolster integrity and instil more confidence in the scheme.
- There’s more the ACCU Scheme can do to support First Nations, rural, regional and remote communities.
- It is in Australia’s national interest to keep up with global carbon market developments.
- Australia is well-positioned to be a leader in the global effort to remove carbon from the atmosphere and store it long-term.
ACCU Scheme Review report
Recommendation 7 of the Chubb Review stated that the authority should provide advice to the Minister on the merits of a mechanism at the scheme level to provide further assurance of additionality and conservativeness in a transparent manner. To help analyse recommendation 7, the authority commissioned SJT Consulting and subcontractor RepuTex to undertake modelling of the effects a potential new buffer could have on the ACCU Scheme and price dynamics to 2035.
The market analysis was limited by the assumptions and simplifications made as detailed in Appendices A and B of the report.
SJT Consulting & RepuTex – Carbon Market Analysis
The authority undertook broad consultation to inform its review of the ACCU Scheme, as outlined here:
The authority would like to thank the many individuals and organisations who contributed their time and expertise to support its analysis.
The authority has sought to conduct the review in an open and transparent manner, including in relation to public consultation and probity matters.
The authority manages conflict of interest issues in accordance with the Authority Charter, which implements governance frameworks in the Climate Change Authority Act 2011, Public Governance, Performance and Accountability Act 2013, and Public Governance, Performance and Accountability Rule 2014.
For this review, Chair Grant King and member Mark Lewis declared material personal interests relating to the subject matter. The remaining members decided that due to those interests Mr King and Mr Lewis should not participate in the authority’s work on the review. Given that the Chair was not to be present for those parts of authority meetings at which the review was considered, remaining members appointed one of their number to preside on those occasions.
If you have any questions about the review, please contact the authority via email@example.com
Other resources of relevance: