Climate Integrity is an initiative working to close the corporate climate integrity gap in Australia, by championing science, transparency and accountability in efforts to limit warming to 1.5°C. Climate Integrity convenes stakeholders and experts from a range of disciplines to drive the collaborations needed to raise ambition, increase integrity in the transition, and accelerate business climate action in line with science.
We thank the Committee for the opportunity to make a submission on the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026 (‘the Bill’) and we broadly welcome measures to improve the integrity and transparency of Australian Carbon Credit Units (ACCUs) and the markets within which they are traded.
However, we have several concerns about the proposed amendments, particularly those related to the Carbon Credits (Carbon Farming Initiative) Act 2011 (‘CFI Act’). These concerns primarily relate to the design and operation of the Method Transition Declarations.
We note the intention of these amendments, as articulated in the explanatory memorandum accompanying the Bill, is to enable the Minister to ‘address integrity risks that may be encountered in the future concerning methods being used by existing projects.’ However, as currently drafted, the proposed amendments may prevent the Minister from making a Method Transition Declaration even where very serious integrity issues have been identified.
The proposed amendments may create a regime whereby projects using methods that suffer from the worst integrity concerns could continue to receive ACCUs — safe from both the revocation of ACCU methods (due to the continuation provisions currently provided by the Act), and from any Method Transition Declarations, because severe integrity issues preclude the projects from transitioning to any alternative methodology.
We expand upon these specific concerns throughout our submission.
Our recommendations:
1. We recommend the Committee seek submissions from First Nations stakeholders with experience and expertise in matters of Free, Prior and Informed Consent.
2. The proposed amendments relating to Method Transition Declarations should be replaced with amendments that expand the provisions relating to the revocation of method declarations, such that all ACCU issuance under the revoked method (including for current projects) ceases immediately.
a. The most straightforward way for the Minister to cease all issuance of ACCUs under a revoked method, or method with serious integrity concerns, would be to repeal the provision (s 127(2)(a) of the CFI Act) that enables the continued eligibility of existing projects to receive ACCUs under a revoked method.
Alternatively:
b. We recommend that non-compliance with the Offsets Integrity Standards serve as the only ‘method transition threshold criteria’, and that the proposed ss 132A(2)(b) and 132A(3) are removed from the Bill.
c. Provisions requiring the existence of an ‘alternative method’, and that projects affected by a Method Transition Declaration be reasonably capable of transitioning to the alternative method, could render the Method Transition Declaration unworkable. We recommend the proposed ss 132A(4)(d)(ii) and 132A(4)(e) are removed from the Bill.
d. Where projects do transition between methods, provision should be made to ensure that there can be no backsliding on integrity requirements between the two.
3. We recommend a strengthening of the conflict of interest provisions that amend s 263(2) of the CFI Act to include a post-appointment exclusion period of five years, preventing former members of the Carbon Abatement Integrity Committee (CAIC) from undertaking paid engagements in ACCU trading, project development, and environmental market advisory.
4. We recommend that the CAIC be required to provide the Minister with an annual integrity report, that must be tabled in parliament.
