ACCU scheme reforms: what is being proposed
The Clean Energy Regulator is seeking feedback on proposed changes to the ACCU scheme. On the surface, stronger integrity settings may be partly offset by greater uncertainty around how future project cash flows are priced and underwritten.
Summary of highest-impact changes proposed include
The power to stop existing projects from earning ACCUs if a methodology no longer meets Offsets Integrity Standards
The ability to relinquish issued credits if modelled abatement was not actually achieved (the measure vs model debate)
Requirements for up-front Native Title Consent
The Emissions Reduction Assurance Committee (ERAC) is being replaced by the Carbon Abatement Integrity Committee (CAIC) with stronger conflict of interest guardrails
More flexibility and decentralisation of government ACCU purchases
For submissions to the regulator see Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill Consultation - submissions close 22nd May 2026
Projects may stop earning ACCUs if method fail integrity standards
One of the most significant proposed changes is the introduction of a mechanism preventing projects from continuing to earn ACCUs after a specified transition period if the underlying method is found to no longer comply with the Offsets Integrity Standards. Historically, projects approved under a valid method could generally continue generating ACCUs under that method. The proposal introduces the possibility that future credit issuance could be impacted by later integrity concerns, increasing regulatory oversight but also creating additional long term policy risk for project developers, investors and financiers.
Ability to relinquish issued credits if modelled abatement wasn’t achieved
The Bill proposes powers to require the relinquishment of ACCUs that have already been issued where subsequent information demonstrates that credited abatement was not actually achieved. This is particularly relevant for methods that rely heavily on modelling rather than direct measurement. The proposal reflects a broader policy focus on ensuring that credited emissions reductions closely match real world outcomes, although it may increase uncertainty around the permanence of issued credits and future project liabilities.
Requirements for up front Native Title consent
The draft legislation would strengthen requirements relating to Native Title by introducing a stricter two-stage consent process. Proponents will now be required to obtain upfront consent from Native Title holders or claimants just to make the project application (Stage 1). While agreement on exactly how the project will be carried out (Stage 2) can still be conditionally resolved later in the project lifecycle, it must be finalised before the end of the first reporting period. Furthermore, the Bill explicitly expands the definition of eligible interest holders to include registered Native Title claimants. These changes are intended to provide greater certainty that Native Title rights and interests, including any pending claims, have been properly considered from the outset, reducing the risk of disputes emerging after project registration
ERAC is being replaced by Carbon Abatement Integrity Committee
The Bill would replace the existing Emissions Reduction Assurance Committee (ERAC) with a new Carbon Abatement Integrity Committee (CAIC). The proposed committee would retain responsibility for advising on method development and integrity matters, while operating under strengthened governance arrangements. The consultation materials place particular emphasis on managing actual, potential and perceived conflicts of interest to support greater confidence in the method assessment process and integrity framework.
More flexibility and decentralisation of government ACCU purchases
The proposed reforms would provide the Commonwealth with greater flexibility in how ACCUs are purchased and managed, moving beyond some of the existing structures associated with centralised purchasing through government contracts. The intention is to allow a broader range of purchasing approaches and improve the government's ability to participate in the ACCU market. While this could increase market flexibility, the practical implications for demand, pricing and procurement processes will depend on how the powers are ultimately implemented.
Market implications
Taken together, the reforms are largely aimed at strengthening integrity, transparency and confidence in ACCUs. However, several of the proposed measures also introduce new forms of regulatory and project level uncertainty. For project developers, investors, lenders and offtakers, the key question will be how these integrity enhancements are reflected in project valuation, risk assessment and the pricing of future ACCU cash flows.
References
Want to know more?
Check out A visualisation of the growth of Australia’s carbon project landscape: a time lapse video from 2012 to today charts the growth of Australia's ACCU scheme.
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