May was a massive month with movements in the Budget, ACCU method development, CMI events and more. However, the Australian Greenhouse Inventory update for December 2023, released late last week, showed relatively incremental improvements, highlighting the need to build on current momentum with additional clear and reinforcing policies.
Budget 24
The Budget projected significant public investment of over $20 billion in hydrogen, critical minerals, low emissions agriculture, and regulatory frameworks to facilitate geological carbon storage, as part of the ‘Future Made in Australia’ plan. This is welcome, but there is a risk of dissonance in signals for private investment between this plan, the Safeguard Mechanism, and the Future Gas Strategy also released last month. It is important for the task of turbo-boosting private investment that the forthcoming Net Zero Plan, and its sectoral and carbon market strategies, send unequivocal signals for large-scale investment in decarbonisation and climate solutions.
The Budget also provided a significant allocation to continue progress in the renovation of carbon market integrity processes and architecture. However, the Budget left key investment details still to be clarified, in particular, around the ongoing use of funds from fixed carbon abatement contract (CAC) exit payments and the future role of the Commonwealth as an investor in the ACCU scheme through the Powering the Regions Fund (PRF). It is essential that carbon market participants be provided with clarity on these matters.
ACCU Method Development
More important momentum came from the opening of an Expression of Interest process for new ACCU methods, which will be evaluated by ERAC for integrity, complexity, scale and co-benefits. This is important in addition to continuing progress on integrated farming, savanna and landfill gas methods that are already priorities. All these changes need to meet key integrity tests and undergo a public consultation process. CMI has been providing assistance on IFLM, landfill and Savanna method development, and will support on the new method development process.
CMI Carbon Farming Forum, and forthcoming Safeguard Symposium
The 8th Carbon Farming Industry Forum was a great event with plenty of positivity and resolve for climate, nature and history repair, and providing important reminders of the key role that the land sector must play in Australia’s net zero journey. It’s an exciting challenge to build scale in this industry to assist in reversing deforestation, restoring ecosystems, and driving carbon removals at scale.
It is vital that we build investment in these solutions and ensure we appropriately integrate local community and Indigenous considerations. A similar challenge is well underway in the energy sector. The work of the Net Zero Economy Authority, starting with coal fired power workers and communities, will be similarly important in supporting a durable transition to net zero and negative emissions.
CMI’s next event is a symposium on the first anniversary of the enhanced Safeguard Mechanism in Parliament House. This will be an important opportunity to track progress, and to explore the potential for deepening and broadening the Mechanism while aligning it with other policy initiatives.
John Connor
CEO
Carbon Market Institute
