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The Australian Carbon Credit Unit (ACCU) Scheme supports landholders, communities and businesses to undertake projects that reduce greenhouse gas emissions and increase carbon storage. On 30 April 2026, the Australian Government released the Exposure Draft of the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill for public consultation. The Bill proposes a suite of amendments to both the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) and the National Greenhouse and Energy Reporting Act 2007 (NGER Act).
Overall Direction
The Bill is not a wholesale redesign of the ACCU Scheme. It is a governance, integrity, consent, compliance and administration reform package. The largest practical changes are: stronger native title consent requirements, replacement of ERAC with CAIC, new powers to force projects off integrity-risk methods, more flexible treatment of R&D/newness, changed government ACCU purchasing arrangements, expanded CER compliance tools, and several permanence/crediting-period flexibilities.
See Table below for full Summary of Changes and Impacts
Currently ACCUs would not meet ICVCM criteria… will this get them closer to being aligned with these key principles?
In some areas yes, several of the proposed reforms would likely move the ACCU Scheme closer to alignment with the Integrity Council for the Voluntary Carbon Market Core Carbon Principles (CCPs), particularly around governance, transparency, permanence, correction of over-crediting and method integrity oversight. Measures such as the new Integrity Risk Method Declaration power, stronger relinquishment pathways, expanded CAIC oversight, clearer permanence obligations, improved native title consent arrangements and greater transparency are broadly consistent with CCP themes relating to robust governance, sustainable development safeguards, tracking, transparency and credible quantification.
However, the reforms alone are unlikely to fully address all concerns relevant to CCP assessment. They do not directly resolve longstanding scrutiny surrounding additionality, baseline setting and permanence risk associated with certain legacy ACCU methods. Some proposed reforms could also introduce new integrity complexities, examples include;
- allowing multiple emissions avoidance and sequestration activities within a single project framework,
- enabling easier transfer between project types,
- permitting removal of land from sequestration projects,
- extending crediting periods ,
- allowing proponents to repeatedly vary crediting period start dates prior to commencement, and
- enabling projects to transition from 25-year to 100-year permanence periods after registration.
As the ICVCM assessment process is methodology-specific rather than scheme-wide, some ACCU methods may move closer to CCP eligibility while others may face continued or increased integrity scrutiny.
Main Areas of Interest
1. Development of integrated land-sector project frameworks
The Bill and consultation materials reinforce the government’s intention to move toward more integrated farm and land management approaches under the ACCU Scheme, which allows multiple emissions avoidance and sequestration activities to operate within a single project and accounting framework. This proposal is intended to simplifying participation in the ACCU Scheme for farmers. It is assumed the method could reduce administrative complexity and transaction costs by avoiding the need to register and manage separate projects for activities across the same farm system. Despite being positioned as a whole farm method, currently the proposed method is focused on incentivising carbon storage by planting and regenerating native vegetation and improving soils.
Integrity concerns will likely be centred around measurement uncertainty, permanence, additionality and interactions between vegetation and soil carbon accounting, particularly where multiple sequestration activities occur simultaneously across dynamic farm landscapes. Quantifying soil carbon and vegetation carbon stock changes across heterogeneous agricultural systems remains challenging due to variability in soils, climate, management practices and natural disturbance events. There may also be challenges in clearly attributing carbon gains to specific project activities, avoiding overlap between carbon pools, and ensuring that credited sequestration is genuinely additional to business-as-usual land management practices.
2. New Integrity Risk Method Declaration powers
The proposed Integrity Risk Method Declaration (IRMD) power is an amendment which allows the Minister to declare an existing ACCU Scheme method an “integrity risk method” where the method fails one or more Offsets Integrity Standards (OIS) and continued crediting is considered to pose a material integrity risk to the Scheme. The declaration can only occur where the Carbon Abatement Integrity Committee (CAIC) has provided supporting advice and public consultation on the preliminary decision has been undertaken. The consultation paper also states that an IRMD would only be made where projects are reasonably capable of transitioning to another available method. Once in effect, the declaration would prevent existing projects from generating new ACCUs unless they transfer to an alternative eligible method, subject to project-specific grace periods.
This reform could increase the importance of methodology due diligence, long-term project design and exposure to evolving integrity expectations and voluntary carbon market standards. In theory, the IRMD framework provides a stronger integrity backstop by reducing the risk of legacy low-integrity credits continuing to enter the market. However, because declarations can only occur where projects are capable of transitioning to another method, the effectiveness of the mechanism may be constrained in sectors where no alternative methodology exists. The reform may also introduce transition and investment risks for existing projects, financiers and ACCU buyers, and could affect project valuations under older methods.
3. Changes to permanence, project transfers and land flexibility
The proposed reforms introduce greater flexibility around permanence obligations, project restructuring and land management within the ACCU Scheme. Key amendments include pathways for projects to transition from 25-year to 100-year permanence periods, provisions allowing land to be removed from sequestration projects in certain circumstances, and streamlined mechanisms for transferring projects between eligible methods or project types. The Bill also includes clarifications around permanence obligations for mixed sequestration and emissions avoidance projects, as well as provisions enabling proponents to vary crediting period commencement dates prior to project initiation. Collectively, these changes are intended to improve the practicality and long-term manageability of carbon projects across dynamic agricultural and forestry landscapes.
These reforms could improve the ability to integrate carbon projects with evolving farm operations and changing land-use priorities. Increased flexibility may also reduce barriers for proponents concerned about committing land to rigid long-term arrangements under changing commercial or environmental conditions. However, the reforms may also introduce additional integrity and accounting complexity, particularly where projects transition between permanence categories, alter project boundaries or restructure sequestration activities over time.
4. Stronger governance, transparency and compliance oversight
Proposed reforms including replacing the Emissions Reduction Assurance Committee (ERAC) with the Carbon Abatement Integrity Committee (CAIC), expanding relinquishment and enforcement powers available to the Clean Energy Regulator, increasing transparency provisions, and strengthening oversight of methods that may pose integrity risks are intended to establish a more rigorous governance, integrity and compliance framework for the ACCU Scheme. Additional measures include new infringement notice powers for lower-level compliance breaches, expanded fit and proper person considerations for designated agents, and broader powers to reverse decisions where false or misleading information has been provided. Collectively, these reforms are designed to strengthen confidence in ACCU integrity and improve the Scheme’s ability to respond to emerging integrity risks and methodological concerns.
These reforms increase the importance of robust MRV systems, defensible baselines, clear data governance and conservative quantification approaches. Carbon projects are likely to face increasing scrutiny from regulators, financiers and downstream buyers regarding the credibility of emissions reductions and sequestration claims, particularly where ACCUs may interact with voluntary carbon markets, Scope 3 claims or supply-chain decarbonisation strategies. While the reforms may improve long-term market confidence and alignment with emerging international integrity expectations, they may also increase compliance costs, administrative burden and technical documentation requirements for proponents.
5. Shift from “least cost abatement” to “value for money”
A proposed reform to replace the ACCU Scheme’s existing government purchasing principle of “least cost abatement” with a broader “value for money” approach. This change would allow government ACCU purchasing decisions to consider factors beyond purely the lowest-cost emissions reductions, aligning with the broader direction of carbon markets globally, where buyers are increasingly differentiating between lower-cost commodity credits and higher-value credits with stronger environmental integrity and co-benefits.
This change could improve opportunities for projects that deliver additional value beyond carbon sequestration alone, such as native vegetation regeneration, biodiversity enhancement, water quality improvements or supply-chain resilience outcomes. It may also support stronger demand for higher-integrity ACCUs from land-based projects, rather than purely lowest-price credits. However, the shift may introduce greater subjectivity into government purchasing decisions, particularly if criteria for assessing “value” are not clearly defined or consistently applied across different project types and sectors.
Summary of Changes and Impacts
Area | Change from current ACCU Scheme | Likely impact |
Native title consent | Bill introduces an up-front consent requirement relating to native title holders and claimants, now projects on native title or claimed native title land would require staged consent: Stage 1 consent to apply, Stage 2 consent to how the project is carried out. | Stronger Free, Prior and Informed Consent (FPIC) alignment, but could lengthen project-development timelines and potentially add more up-front engagement/documentation costs. |
Re-establishment of the ERAC as the CAIC | The Carbon Abatement Integrity Committee (CAIC) to replace the Emissions Reduction Assurance Committee (ERAC). New requirements for expertise of the Chair, 1 committee member must be Aboriginal and/or a Torres Strait Islander, expansion to requirements to prohibit a member from engaging in any form of paid work that conflicts, or that may conflict, with the proper performance of the member’s duties. Expanded role of CAIC in advisory method prioritisation and reviewing expiring methods, providing the CAIC with broader access to external expertise, and publication of additional advice given by AIC to Minister in relation to public consultation. | In theory, more robust method governance, potentially more scrutiny of methods and greater visibility method review which could improve public trust. |
Method Consultation | Public consultation on methods can increase from up to 28 days to up to 45 days, with a minimum of 14 days retained. | Could allow better opportunity for technical submissions, but could also lead to potentially slower method development timelines. |
Method suspension | Maximum suspension of new project applications under a method increases from 12 to 18 months. | Gives CAIC more time to investigate integrity issues, but creates longer uncertainty for proponents relying on suspended methods. |
Integrity Risk Method Declarations | Currently the ERAC (now CAIC) can suspend a method if there is evidence the method no longer meets the Offsets Integrity Standards (OIS) to prevent new projects from being registered, and the Minister may vary a method to include new requirements to address integrity issues or revoke a method if it ceases to meet the OIS. Now, a new Ministerial power has been issued. The Minister can declare an existing method as an “integrity risk method” where it fails one or more OIS, and continued crediting of ACCUs poses material integrity risk to the Scheme providing the CAIC has provided aligning advice and a public consultation on preliminary decision has been undertaken. *BUT it says an Integrity Risk Method Declaration (IRMD) would “be made if projects are reasonably capable of transitioning to another available method.” Once in effect, the declaration would prevent existing projects from earning ACCUs unless they transferred to another method, under the following project-specific grace periods:
| Integrity backstop to reduce risk of legacy low-integrity credits. However, as the declaration can only be made if a project can transition to another available method, it may impact the effectiveness of the framework. Introduces transition risk for existing projects, financiers and buyers. Could affect project valuations under older methods. |
R&D additionally requirements | Currently one of the additionality tests that must be meet for registration is that the “the project must not have begun to be implemented”. To prevent R&D from being excluded the following amendments have been proposed:
This is to ensure there is a genuine link between the R&D and the development of an ACCU method, and creates requirements to demonstrate additionality that are tailored to the circumstances of projects that have participated in R&D. | Positive impact for technology trials and proponent-led method development. Reduces risk that early pilots make future ACCU projects ineligible. Unsure if this causes an integrity concern for commercial operations leveraging the R&D exemption pathway existing activities registered. |
Government purchasing of ACCUs | ACCU purchasing moves from CER to the Secretary of the department (aka the Prime Minister) – purchasing powers may be delegated to Senior Executive officials in the department or other Commonwealth agency. | Could reduce actual/perceived conflict of interest between CER as regulator and purchaser (recommendation from Chubb Review). |
Government purchasing principle changed from “least cost abatement” to “value for money”. | When review in tandem with delegation of purchasing powers – “The ability for the Secretary to delegate purchasing functions would create flexibility and efficiency, by allowing different areas of government to carry out purchasing processes that are tailored to their goals and aligned with internal processes”. Could support higher-value credits with co-benefits, e.g., biodiversity or strategic supply, and may move government demand away from purely lowest-price ACCUs. | |
New relinquishment provision | Incorrect Information Currently, if ACCUs are issued based on incorrect information, even inadvertently, the only available mechanism for the CER is compulsory relinquishment for false or misleading information. The amendment introduces a voluntary relinquishment pathway for cases where incorrect information was provided unintentionally and without recklessness or negligence, addressing stakeholder concerns about the reputational implications of formal relinquishment actions. Applications may be initiated by either the proponent or the CER once the incorrect information is identified. The CER may issue a voluntary relinquishment notice if satisfied the information was false or misleading and not knowingly provided. The notice will specify the number of ACCUs attributable to the incorrect information that should be relinquished. If the ACCUs are not relinquished within 90 days, the CER may issue a compulsory relinquishment notice. | Maintains integrity while reducing reputational damage for honest errors, but could creates risk that proponents frame negligent behaviour as “inadvertent” to avoid reputational consequences. |
Abatement not achieved Directed at methods using carbon abatement models, when there is a discrepancy between the amount of ACCUs already issued to the project, and the updated estimate of abatement, and the discrepancy is identified too late in the crediting period and can’t be recovered in subsequent reporting periods. The CER now has the power to require relinquishment of ACCUs where updated modelled abatement is lower than previously credited and over-crediting cannot otherwise be corrected. Not intended to be used for reversal of sequestration due to natural disturbance where no mitigation occurs, “as a mechanism already exists for those cases”. The CER must issue a relinquishment notice with a default compliance period of 90 days and an administrative penalty if the relinquishment is not met. | Important for model-based methods nearing crediting-period end, but could increases project risk under these methods. | |
Project revocation relinquishment timing Currently proponents can voluntarily revoke their project, to remove obligations to maintain sequestration, and have to relinquish the ACCUs before submitting their application to revoke. Proponents no longer need to relinquish ACCUs before applying to revoke a sequestration project, and relinquishment occurs only if revocation proceeds and no alternative proponent takes over. | More practical exit/transfer process and lower risk of unnecessary relinquishment. | |
Deemed relinquishment Currently the Act prevents a person from being issued a certificate of entitlement if they are subject to such a relinquishment requirement, and proponents are required to purchase ACCUs from elsewhere if they don’t hold the number required to relinquish. Amendment removes ban on issuing ACCUs if a relinquishment requirement is in place and allow the compliance deadline for relinquishment requirements to be extended to account for the time it takes the CER to decide on the certificate of entitlement application. | Reduces liquidity stress where proponents have already sold/cancelled ACCUs, while still ensuring relinquishment obligations are met. | |
Clarification of ‘net total number’ for sequestration | Current definition of the term ‘net total number’ determines the number of ACCUs issued and relinquished for an eligible offsets project that are attributed to sequestration. Amendment clarifies that ACCUs from emissions avoidance should not be included in the sequestration “net total number” requiring relinquishment on permanence-related exit/reversal. | Avoids over-relinquishment for mixed avoidance/sequestration projects. |
False or misleading information | Explicit that CER decision-makers can review and reverse decisions where the original information relied upon is found to be false or misleading. | Aims to improve the integrity of the Scheme – could strengthen enforcement. May increase due diligence expectations for applications. |
Designated Agents | Currently to register a project and be issued ACCUs, a proponent must pass the fit and proper person test. The amendment extends this test to designated agents who wholly or partially prepare relevant applications or offsets reports for a project. | More oversight of carbon service providers, aggregators and consultants. Could potentially led to a raise compliance standards across the project-development market? |
Insolvency | Insolvency becomes a consideration rather than an automatic failure of the fit and proper person test. | May avoid blocking ACCU issuance where issuance could restore solvency. |
Infringement notices | Currently the CER must work through the courts, even for minor lack of compliance. Amendments allows CER to issue infringement notices for lower-level infringements (record-keeping, project reporting and notification requirements), rather than seeking remedies in the courts. Allows recipients to pay without admitting to any liability. Maximum amount is 60 penalty units for a corporate body, and 12 penalty units for an individual. CER are allows to publish certain information about the issuance and payment of infringement notices to promote market transparency on the use of infringement notices. | Faster, more proportionate compliance enforcement. Could decrease incidences of lower-level infringements long term. |
Permanence | Sequestration offsets projects in the Scheme must be registered with a 25-year or 100-year permanence period. Amendment allows project’s permanence period to be changed after registration (from 25-year to 100-year), providing the CER agree. No reverse allowed from 100 to 25 years. | Encourages longer-duration carbon storage projects. |
Amendment allows new method to require 100-year permanence if needed to satisfy integrity standards. | Higher integrity for some future methods, but may reduce landholder participation where long-term land-use constraints are unattractive. | |
Clarification that permanence obligations apply to sequestration projects that both store carbon and avoid emissions, such as savanna sequestration projects and blue carbon projects. | Clarification could improve integrity of project types, unsure if will impact long-term liability, monitoring complexity or reversal risk management requirements for proponents. | |
Crediting period | Amendment to allow minister to extend crediting periods based on latest CAIC advice, even if earlier ERAC advice was negative. | Allows methods to adapt as evidence improves. |
Amendment to address anomaly where a crediting period may be longer than the permanence period applicable to the project. | Closes integrity gap for projects, primarily for savanna sequestration projects. | |
Currently there are default crediting periods for offsets projects, unless a method specifies a different crediting period. Amendment to facilitate emissions avoidance projects moving onto a new or varied method after its crediting period or any extended accounting period has expired, where requirements are met. It also allows emissions avoidance projects to switch to become a sequestration project. | Supports continued crediting. Aims to increase participation in projects such as savanna fire management. | |
Amendments to allow proponents to vary the start time of their project’s crediting period as many times as they wish, so long as the crediting period commences no later than the relevant deferral limit to provide flexibility for new projects to enter the Scheme. | Increases flexibility for proponents, it may create integrity risks if proponents strategically delay commencement to optimise baselines, market conditions or additionality timing. | |
Record keeping and Reporting | Offset reports due within 9 months of reporting period end instead of 6 months | More time for audit and reporting, could reduce delivery pressure but also may slightly delay issuance. |
Clarification given that participants are not required to report or monitor projects after both their permanence and crediting periods have expired | Reduces administrative burden for completed projects. | |
Amendment to make it clear that the newness requirement only requires that the project have not begun to be implemented at the time of the application for declaration of the project. Other additionality requirements (regulatory additionality and government program requirement) will continue to be assessed at the time of the decision rather than the date of application. | Provides flexibility to proponents to progress carbon abatement activities after they have made their project application. | |
Additional power, methods can require additional information/documents up-front in project registration applications. | More complete applications, could lead to fewer CER information requests, but higher front-loaded documentation burden for proponents. | |
Removal of parts of sequestration projects | Currently project area for sequestration offsets projects which have already been issued ACCUs can’t be removed unless it is becoming another project (or part of). Amendment to allow removal of parts of sequestration project providing appropriate ACCUs conditions are met. | Greater land-use flexibility. But could cause integrity risks if proponents can selectively remove underperforming or reversal-prone areas while retaining higher-performing carbon areas, potentially distorting project performance and credited abatement outcomes. |
Transfers between avoidance and sequestration projects | Easier transfer between emissions avoidance and sequestration project types through existing method-transfer processes for a project shifting from the savanna fire management emissions avoidance method to the savanna fire management sequestration and emissions avoidance method. | May increase uptake of methods crediting both avoidance and sequestration. |
Carbon Maintenance Obligations | Carbon maintenance obligations (CMOs) can be imposed on land if a person fails to meet, or is likely to fail to meet, ACCU relinquishment requirements that have been, or are likely to be, issued. Changes issued to CMOs to protect native title holders from CMOs where they did not consent and were not proponents. | Reduces consent risk and improves fairness for native title holders. |
Area-based emissions avoidance consent | Area-based emissions avoidance projects currently require consent from all eligible interest holders. For area-based emissions avoidance projects, consent retained for Crown lands Ministers and native title bodies/claimants, but removed for other eligible interest holders such as banks. | Reduces consent burden for savanna-style emissions avoidance projects. |
CCA review frequency | CCA reviews move from every 3 years to every 5 years after the 2026 review. | More regulatory stability, but less frequent formal independent review. |
Nature Repair information sharing | Projects may participate in both the Nature Repair Market Scheme and ACCU Scheme, which are both regulated by the CER. This amendment will allow CER to use information provided under the Nature Repair Act for ACCU Scheme purposes. | Reduces duplication for projects participating in both schemes. |
Mixed sequestration and avoidance methods | Government is considering changes to allow single methods to include both emissions avoidance and sequestration activities from different activities. Legislation changes are required and no draft amendments are within Bill. Currently both sequestration and emissions avoidance project activities can occur on the same land as separate offsets projects under different methods. | Potentially important for Integrated Farm and Land Management, but legislative complexity remains. Near-term impact is uncertain. |
NGER transparency | New regulation-making power to publish more NGER information, potentially facility-level, method-level or time-series data, applying from 2025–26 data onward. | Greater transparency for investors, analysts and Safeguard stakeholders, but possible confidentiality/commercial sensitivity concerns. |
NGER administration | CER can deregister certain corporations (in liquidation, under administration, has become a Chapter 5 body corporate etc) on its own initiative. Amendment to require delayed registrants to report for intervening years between trigger year and registration. | In theory cleaner NGER dataset and fewer administrative gaps. |
The Integrity Risk Method Declaration process diagram
