Carbon credits are critical in Australia’s net zero plan.
How ACCUs work
ACCU stands for Australian Carbon Credit Unit.
The Clean Energy Regulator issues ACCUs to projects that avoid releasing greenhouse gases, or store or remove carbon from the atmosphere (1 x ACCU = 1 x tonne of CO₂ equivalent).
ACCUs can be sold to private buyers who need to offset their own emissions elsewhere.
There’s no limit to the number of ACCUs companies can buy
The safeguard mechanism requires Australia’s biggest polluters to cut emissions by 4.9% a year. Even though the mechanism caps total emissions under the scheme, individual companies can hit their goals by buying carbon credits.
The logic goes: as baseline targets tighten, ACCU prices will go up. Eventually it will be cheaper for companies to reduce emissions through absolute cuts.
Chart below: Many carbon offsets are sourced from the land use sector, which accounts for most of Australia's emission reductions.
Carbon credit schemes are risky and complex
The issue is quality, not only quantity. (For more about carbon quality, we recommend the Carbon Integrity Explorer - an open access platform that provides information on Australian carbon offset projects.)
In February 2023, the Minister for Climate Change revoked approval for projects that ‘avoided deforestation’.
Plenty more ACCU projects have been revoked for reasons including changes in eligibility or providing false or misleading information. In some cases the ACCUs were relinquished also.
Low-quality carbon credits enable emissions from polluters without ensuring the necessary offsets.
Chart below: Carbon Credit projects revoked (% of all) (Note: shows projects, not ACCUs).
What we're watching
• ICYMI: Lucid explainer about the government’s safeguard mechanism policy from Casey Briggs on ABC's 7.30. Watch here.
• Five graphs that changed the world culminating in the striking warming stripes. With Adam Rutherford from The Royal Society. Watch here.
• While we're in the neighbourhood of classic data visualisations, here's NASA's climate spiral (1880-2022). Watch here.