Key Reforms - Carbon Market Institute

Following the change of Australian Government in May 2022, a suite of domestic climate policy reforms have been undertaken. Alongside a renewed NDC for 43% reduction on 2005 emissions by 2030, these include:

Safeguard Mechanism reform to drive industrial decarbonisation in line with the revitalised emissions reduction target;
An independent review into the Australian Carbon Credit Unit (ACCU) framework, to ensure that the market is fit-for-purpose and able to support high integrity carbon abatement;
Establishment of a Federal Environmental Protection Agency as part of a broader Nature Positive Plan
- Within the Nature Positive Plan there are provisions to established a Nature Repair Market, which would encourage private investment in biodiversity restoration and protection.

CMI has created knowledge hubs for each of these key developments (Nature Positive Plan forthcoming) to unpack the finer details, and provide market participants with accessible information.

Safeguard Mechanism Reform

The Federal Government is now implementing its climate policy reform agenda, outlined in Powering Australia. One of the policies set to facilitate this is the enhanced Safeguard Mechanism.

These reforms intend to lift the ambition of this policy and guide investment decisions in the industrial sector, in order to drive real and substantial emissions reductions. Our Safeguard Mechanism FAQs explore the key details of this vital policy reform.

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Independent Review into ACCUs

The Federal Government has accepted each of the recommendations delivered by its Independent Review into ACCUs, in principle. It will now engage with key stakeholders regarding best practice for implementation, before it begins these key domestic market reforms.

Once implemented, these recommendations will ensure that Australia’s domestic carbon market is fit-for-practice, functioning around a core of integrity. Constant review built into the market structure will further ensure that the market remains a key tool in the climate policy suite. We have published our market brief unpacking the Review’s key recommendations, and next steps.

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