As governments and businesses around the world pledge to decrease greenhouse gas (GHG) emissions, carbon credit markets are emerging to help meet these goals. Here’s what you need to know about Australian carbon credits.

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Climate projects

Certified climate action projects purpose is the removal or avoidance of one tonne of carbon dioxide (or its equivalent in other greenhouse gases) being in the atmosphere.

Carbon dioxide and other greenhouse gas emissions behave like a blanket or a cap, retaining some of the heat the Earth would otherwise release into the air. When an excess of greenhouse gas is released into the atmosphere by burning coal, gas or oil, or through agriculture, these events contribute to global warming.

In Australia, projects that meet eligibility criteria are issued with carbon credits known as Australian Carbon Credit Units (ACCUs) based on the amount of CO2 emissions sequestered or avoided. Carbon farmers can choose to monetise these credits by selling ACCUs. These are issued by the Clean Energy Regulator, a government body responsible for accelerating carbon abatement in Australia.  The Emissions Reduction Fund (ERF) establishes the methodology these projects are required to meet.

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What are the most common carbon credit methodologies in Australia?

The Emissions Reduction Fund has established 38 methodologies for carbon projects that can qualify for ACCUs, with the most common being:

• Reforestation: Forest growers and landholders grow and maintain trees on land previously used for agriculture.
• Savanna burning: Emissions are reduced through fire management practices in the savanna landscapes of Australia’s North. The dry landscapes comprised of small shrubs, trees and grasses combined with the tropical heat make these areas particularly fire prone. By deliberately setting small fires early in the dry season, the frequency and magnitude of unplanned, high-intensity fires in the late dry season are reduced.
• Plantation forestry: Emissions are reduced through carbon sequestered in plantations, harvested wood products and permanent forests.
• Avoided deforestation: Emissions are reduced by projects protecting native forests that are permitted for clearing.
• Landfill gas: Emissions are reduced by improving, installing or re-establishing landfill gas collecting systems.
• Human-induced regeneration: Emissions are reduced by landholders regenerating native forest suppressed for at least 10 years.

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