The Carbon Market Institute (CMI) has welcomed the Australian Government’s announcement of two new Savanna Fire Management (SFM) methods under the Australian Carbon Credit Unit (ACCU) Scheme, describing the reforms as a significant step toward scaling Indigenous-led climate action, supporting regional economies, and strengthening Australia’s carbon market.
Assistant Minister for Climate Change and Energy, Josh Wilson, and Minister for Indigenous Australians, Malarndirri McCarthy, today announced the finalisation of two new methods: an updated emissions avoidance method and a new sequestration-plus-emissions-avoidance method. Together, these methods could unlock an estimated $7.7 billion in economic value across northern Australia while supporting long-term employment and investment in First Nations communities.
Building on a successful model
Savanna fire management projects apply traditional early dry season “cool burning” practices to reduce the risk of high-intensity late dry season fires, lowering emissions while improving ecosystem health and biodiversity. They have been undertaken in Northern Australia for up to 15 years as emissions avoidance ACCU Scheme projects and the new methods now recognise the related increases in woody biomass and incentivises permanent sequestration to transferring projects.
Janet Hallows, Director, Climate Programs & Nature-Based Climate Solutions, CMI, said the announcement reflects the growing recognition that Indigenous land stewardship and carbon markets can work together to deliver meaningful climate, environmental and community outcomes.
“Savanna fire management projects are among the most successful examples of carbon markets delivering real climate action while supporting jobs, cultural outcomes and economic development in regional and remote communities.”
Across northern Australia, savanna fire projects already manage almost 35 million hectares of land, with around 70 per cent of projects operated by Indigenous enterprises, generating income and employment while reducing emissions.
Unlocking new carbon opportunities
The new sequestration method, alongside avoided emissions from fire management, better reflects the full climate benefits and may allow projects to generate additional ACCUs by recognising carbon stored in trees and other vegetation.
CMI said this innovation highlights how the ACCU Scheme continues to evolve to incorporate new science and strengthen the role of land-based climate solutions.
“These reforms demonstrate how the ACCU Scheme can continue to innovate—supporting Indigenous-led projects, improving environmental outcomes, and attracting investment into nature-based climate solutions.”
Managing market impacts
CMI noted that the new methods have the potential to significantly increase the supply of ACCUs, highlighting the importance of careful market design.
Noting the potential to disrupt the carbon market – and assure permanence, CMI welcomed DCCEEW’s decision to manage issuance by employing a smoothed issuance mechanism over the 25-year crediting period.
Ensuring demand certainty
CMI also highlighted the importance of ensuring long-term demand certainty for savanna fire management credits. A significant share of these credits are currently purchased through the voluntary carbon market, particularly by companies participating in the Australian Government’s Climate Active program.
With the future design and direction of Climate Active under consideration, CMI said maintaining credible demand signals for high-integrity Australian carbon credits will be critical to sustaining investment in projects across northern Australia.
“Savanna fire management projects have built strong support in the voluntary carbon market, particularly through Climate Active,” said Hallows.
“Providing clarity on the future of voluntary demand frameworks will help ensure these projects continue delivering climate abatement, Indigenous employment and regional economic benefits.”
