Chubb Review backs ‘sound’ carbon crediting framework with recommendations that can boost investor and community confidence
The Independent Chubb Review of Australian Carbon Credit Units (ACCUs) has backed a ‘sound’ carbon crediting framework, while outlining improvements that can boost Australian investor and community confidence and efforts to help achieve timely net zero and negative emissions, said the Carbon Market Institute (CMI) today.
The Review did not find abatement had been overstated and focused on steps to increase transparency to ensure abatement measures were accurate. The Review found the carbon crediting framework sound but recommended improvements, including:
- an enhanced and more independent Carbon Abatement Integrity Committee (CAIC) with a full-time Chair to replace the Emissions Reduction Assurance Committee (ERAC) as guardian of scheme integrity;
- separation of governance, ACCU purchasing and method development functions currently administered by the Clean Energy Regulator (CER), with legislative and administrative changes so the CER provides more project and scheme information;
- legislative changes to enhance transparency, data access and data sharing as well as support for a national platform for integration and sharing of environmental information;
- project proponent, rather than Minister-led development and modification of ACCU generation methods, reflecting international best practice, but with clear CAIC involvement;
- improved transparency of the the Human Induced Regeneration (HIR) method, which the Review otherwise found is solid, requiring project proponents to more clearly demonstrate links between changed land management and resulting abatement;
- on other methods examined, a new method was recommended for avoiding deforestation with an end to the previous permit-based method; baseline growth for landfill gas ACCU generation; and no changes to the Carbon Capture and Storage (CCS) method;
- removal of the option to conditionally register projects on Native Title lands and greater support for First Nations Australians’ participation;
- CER-led co-development of procedures to support transparency of different project characteristics and types of co-benefits associated with ACCUs;
- requirements that carbon service providers and market advisers be accredited and regulated, backed by a finding that Carbon Industry Code of Conduct (currently administered by CMI) contributes to ACCU integrity.
The Government has supported all recommendations in principle but committed to consult with stakeholders on an implementation plan.
CMI CEO John Connor said that the Independent Review was an important process to ensure Australia’s climate action and carbon crediting framework remains fit for purpose, attracts investment and responds to international developments under the Paris Agreement and global voluntary carbon markets.
“If Australia is to seriously contribute to limiting global warming to 1.5oC, it is crucial to align and escalate public and private investments in industrial decarbonisation and emission reductions across the economy. That can only happen when the carbon crediting framework has investor and community confidence, as well as being linked to a stronger Safeguard Mechanism and with better targeted public investment.”
“This is a scheme that has developed and evolved over more than a decade, and investors and the community should be encouraged by the Independent Review Panel’s findings that its framework is sound, and the proposed improvements can also now be embedded to ensure a more transparent, robust system that can be scaled up.”
“As the panel made clear, scheme improvements will require significant resourcing in the forthcoming May budget. CMI looks forward to consulting with our members on more detailed recommendations and working with the government on appropriate implementation.”
With the Nature Repair Market draft legislation released recently, and draft Safeguard Mechanism Rules as well as consultation on the Powering the Regions Fund imminent, Connor noted the importance that these align closely with the Chubb Review findings:
“The Nature Repair Market and enhanced Safeguard Mechanism are vital reforms and milestones in the evolution of Australia’s climate and biodiversity protection policy, and they must work together to collectively drive Australia’s climate ambition.”
“Hopefully we can overcome the divisions of recent months and years and urgently move on to deliver a policy framework that is not only credible, sustainable and investable, but also capable of achieving at least 50 per cent emission reductions by 2030 and negative emissions by 2050 – Australia’s fair share of the 1.5OC challenge,” concluded Connor.
Finally, CMI also welcomed recognition that the Carbon Industry Code of Conduct, currently administered by CMI, is an important contribution to the integrity of the ACCU scheme and which was also linked to the recommendation that carbon service providers and carbon market advisors, including agents, should be accredited and regulated.
About the Carbon Market Institute
The Carbon Market Institute (CMI) is a member-based institute accelerating the transition towards a negative emissions, nature positive world. It champions best practice in carbon markets and climate policy, and its nearly 150 members include primary producers, carbon project developers, Indigenous organisations, legal, technology and advisory services, insurers, banks, investors, corporate entities and emission intensive industries. The positions put forward constitute CMI’s independent view and do not purport to represent any CMI individual, member company, or industry sector. CMI’s latest Advocacy Policy Positions Statement can be viewed here.
For further information, contact Thomas Hann on 0408880536 or thomas.hann@carbonmarketinstitute.org
