The Carbon Market Institute welcomes the Climate Change Authority’s 2026 review of the Carbon Credits (Carbon Farming Initiative) Act and its finding that the Australian Carbon Credit Unit (ACCU) Scheme remains fundamentally sound, with no major redesign required.
CMI CEO Sasha Courville said the review provides an important vote of confidence in the foundations of Australia’s carbon market, while identifying targeted improvements that can strengthen integrity, transparency and investment.
“The CCA’s conclusion that the ACCU Scheme is fundamentally sound and does not require a major policy overhaul is significant. It demonstrates that the Scheme’s core architecture is working, while recognising that continuous improvement is essential to maintaining confidence and integrity.”
CMI particularly welcomes the Authority’s recognition that policy stability and predictability are critical to long-term investment. Carbon projects, like other investments in emissions reduction and land management, require capital to be committed over decades. Stable policy settings allow farmers, land managers, project developers, investors and businesses to make those decisions with greater confidence.
“Long-term investment requires long-term policy certainty. The CCA has recognised that policy stability is critical to unlocking ACCU Scheme project investment at the scale and pace required for Australia’s emissions reduction goals. This certainty is equally important for Safeguard Mechanism facilities and other liable entities, which need predictable policy settings and a credible ACCU market to plan and finance their decarbonisation pathways over the long term. The absence of a major overhaul provides an important signal that the ACCU Scheme can evolve through targeted, evidence-based improvements rather than repeated fundamental changes to its design.”
CMI supports all six recommendations in the Authority’s review and sees them as a practical program for strengthening the Scheme:
Taking a pragmatic approach to permanence and reversal risk
CMI supports the Authority’s recommendation to complete and publish its assessment of the risk-of-reversal buffer and permanence period discount and recognises the importance of appropriately managing reversal risk in carbon projects.
At the same time, CMI encourages a pragmatic and proportionate approach to permanence that recognises the particular characteristics of Australia’s predominantly land-sector ACCU projects. Carbon projects operate within living agricultural and ecological systems and, in many cases, alongside ongoing food and fibre production. Permanence settings therefore need to account for the realities of land tenure and ownership, land management and value intergenerational ownership and can impact succession planning, land value and financing.
CMI supports maintaining strong integrity and ensuring that permanence and reversal risks are appropriately managed but cautions against approaches that impose unnecessary rigidity or unintended barriers to participation.
“We need to get the balance right. The pursuit of perfect permanence settings should not become the enemy of good climate outcomes. A pragmatic approach can maintain high-integrity carbon outcomes while recognising that farmers and land managers need to make decisions about their land across generations.”
The review’s consideration of 25-year permanence projects is therefore particularly important. CMI supports further evidence-based consideration of how different permanence options can manage reversal risk while maintaining viable participation pathways for landholders and delivering genuine, durable climate outcomes.
Government purchasing should deliver public value
CMI strongly supports the Authority’s recommendation that credible public and First Nations benefits be prioritised in future Government purchasing. This directly aligns with CMI’s May 2026 submission on ACCU Scheme legislative reforms, which welcomed the shift from a “lowest cost abatement” mandate towards a “value for money” approach. CMI contended that Government purchasing should be used strategically as the ACCU market increasingly transitions towards private-sector demand under the Safeguard Mechanism. Rather than competing with private buyers for the least-cost ACCUs, Government purchasing can help support strategic investment priorities and projects delivering broader value.
CMI has recommended that Government establish a transparent assessment framework for “value for money”, including criteria such as abatement cost, durability, risk, scalability and environmental and social co-benefits. This could allow Government purchasing to help build markets for emerging methods, long-term removals and projects delivering credible nature, biodiversity, agricultural, regional and First Nations benefits.
CMI also supports ensuring that First Nations benefits are grounded in genuine participation, consent and benefit-sharing, consistent with the broader integrity reforms underway through the CFI Act.
Make ACCU information more transparent, accessible and useful
CMI strongly supports the Authority’s recommendation to provide buyers with clearer, more accessible information on ACCUs, projects and market activity. CMI has made detailed recommendations to the Clean Energy Regulator on improving project information, including accessible formats and guidance, regional NRM alignment, geospatial data, method information in the Contract Register, and clearer Carbon Estimation Area data. CMI has also consistently advocated for a National Data Platform bringing together ACCU, Safeguard Mechanism and broader climate and environmental market data. CMI reiterated this in its August 2026 Annual Progress Advice submission, recommending coverage of ACCU supply, projects, methods, method development, issuance and investment alongside Safeguard Mechanism compliance and onsite decarbonisation.
Providing a clear forward pipeline for methods
CMI strongly supports publishing a forward view of method development priorities and expected timelines. This directly reflects CMI’s CCA submission, which called for a systematic ACCU methods gap analysis and a clear pipeline of future priority methods. CMI argued that a proponent-led expression-of-interest process, while valuable for encouraging innovation, cannot on its own identify strategic gaps or ensure that methods needed to support Australia’s climate objectives are developed.
“A visible, clear, shared pipeline of priority methods would give investors and project developers something that has been missing from the Scheme: a clearer line of sight to where opportunities are emerging and where Government wants to see innovation and investment.” said CEO, Sasha Courville.
A forward pipeline should also support the development of methods that can work alongside agriculture, biodiversity and nature repair, as well as emerging carbon removal and industrial decarbonisation technologies.
Increasing efficiency, capacity and coordination in method development
CMI strongly supports the recommendation to improve the efficiency, capacity and coordination of method development. CMI’s December 2025 submission identified delays, resourcing constraints and unclear processes as barriers to investment confidence, calling for timely, well-resourced and transparent processes, including co-development across government, industry, Indigenous organisations, agriculture, conservation and technical experts. CMI has proposed options including a method-development sandbox, independent method development authority and EOI/co-development models. Its May 2026 legislative reform submission also welcomed the proponent-led process while calling for a stronger CAIC role in setting priorities and overseeing EOIs.
“Method development is ultimately an investment issue. If a credible method takes years to develop, project proponents and investors cannot plan with confidence. A faster, better-resourced and more transparent process will help bring forward high-integrity supply and support innovation.”
This will be increasingly important as ACCU demand grows from Safeguard Mechanism facilities and private-sector buyers.
Strengthen confidence through continuous improvement, not wholesale redesign
While the Authority’s six recommendations focus on specific areas, CMI sees them as part of a broader process of continuous improvement rather than a case for reopening the architecture of the ACCU Scheme.
CMI’s December 2025 submission described the ACCU Scheme as a robust, government-backed framework that has supported Australia’s transition for more than a decade, while emphasising that carbon market integrity is a continuous and iterative process. CMI supported targeted improvements to governance, transparency, participation and method development rather than fundamental disruption to the Scheme.
The Authority’s conclusion that no major redesign is needed is therefore important. It provides a degree of confidence that the Scheme’s core architecture is sound and that integrity can be strengthened through targeted, evidence-based improvements. This is particularly important for both sides of the market. Project proponents and investors need confidence that policy settings will remain sufficiently stable to support long-term projects and capital allocation. At the same time, Safeguard Mechanism facilities and other liable entities need predictable access to a credible ACCU market as they plan and finance their decarbonisation pathways.
The CCA’s decision to recommend targeted improvements rather than a major overhaul is therefore itself an important signal of Scheme maturity and integrity. It allows Australia to focus on making a fundamentally sound market better, more transparent and more effective, while preserving the policy stability needed to attract long-term investment.
Carbon farming is also an important part of this broader investment story.
Carbon farming is increasingly being integrated into broader farm and land-management strategies, improving land condition and resilience, and supporting regional economies.
“Carbon farming should not be viewed as agriculture versus carbon. For many Australian landholders, carbon projects are another tool in the farm management toolbox – helping diversify income, improve land condition and build resilience while continuing to produce food and fibre.”
A high-integrity ACCU Scheme is essential to realising these benefits. The CCA’s review reinforces that integrity and investment confidence are complementary: strong integrity is what gives markets the credibility and durability needed to attract long-term capital.
