The Carbon Market Institute (CMI) launched the Carbon Industry Code of Conduct in 2018. The Code’s vision is to achieve a well-functioning emissions reduction and carbon sequestration industry in Australia at the scale required to significantly contribute to Australia’s greenhouse gas reduction commitments under the Paris Agreement.
The Code’s role in the carbon market is significant in that it:
- defines industry best practice for market participants including project developers, agents, aggregators and advisers in Australia’s carbon industry;
- promotes consumer protection and appropriate and open interaction with clients;
- provides guidance to scheme participants;
- promotes market integrity, transparency, and accountability; and
- displays international leadership in Australia’s carbon market.
The Code was designed to operate in two stages:
- Foundational Stage: Commencing in a reduced capacity in the initial two-year Foundation Stage, allowing for early-stage creation of the Administrator, onboarding of Foundation and other Signatories, and testing of its functions for adoption in Australia’s carbon market.
- Operational Stage: The Code stipulates that a transition from the Foundation Stage to the Operational Stage must take place on 1 July 2020. This secondary stage would see the fully functioning implementation of the Code, following an Independent Review (the Review) for the appropriate consideration and implementation of the necessary requirements to effect an appropriate transition from foundation to operation.
The successful launch on 1 July 2018, and completion of the Code’s first compliance year (FY19) was a critical milestone in the development of Australia’s domestic carbon industry and maturation of the sector as a whole. In its first year the Code accepted 14 Signatories, representing the vast majority of carbon project developers in the Australian market.
The Code Administrator’s inaugural Annual Report of the Code of Conduct 2019 observed 100% compliance with the requirements of the Code of Conduct from Signatories, demonstrating the commitment that practitioners within this industry have to improving and operating at best practice.
From October 2019 to March 2020, an independent review (the Review) of the Code was conducted by Independent Expert Reviewer Virginia Malley. The Review included consultations with the Code Administrator, Signatories, industry and government stakeholders, and a range of community stakeholders, including Indigenous, landholder and farming representatives. This review resulted in a final report that included recommendations to support the Code’s full implementation in the Operational Stage.
The Operational Stage began on 1 July 2020, and the Administrator took the first twelve months as a ‘transitional year’. This allowed the Adminstrator to:
- implement the Independent Review recommendations;
- scale up the Administrator’s functions and capabilities to incorporate complaints handling and investigation,
- develop Signatory audit and reporting mechanisms, and
- establish a Code Review Panel to oversee these and other compliance functions.
These above functions have now come into effect as of 1 July 2021.