Barry Li | Climate Reporting & Assurance

The Climate Change Authority (CCA) has opened its public consultation for the 2026 review of the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) — the legislation that underpins the Australian Carbon Credit Unit (ACCU) Scheme.
Submissions are open until 5 pm AEDT, 8 December 2025 via the CCA Consultation Hub 💬.

This review marks a pivotal moment for Australia’s climate policy architecture. It’s the first comprehensive review since the Safeguard Mechanism reforms, and comes as the nation ramps up ambition toward a 62–70 % reduction in emissions by 2035.
The consultation paper — Enhancing the ACCU Scheme to Support Australia’s 2035 Emissions Reduction Target — asks how the scheme can evolve to maintain integrity, scalability, and credibility in a decarbonising economy.

What’s in focus

1. Strengthening the scheme’s role in meeting the 2035 target

The CCA’s framing is clear: the ACCU Scheme remains a “high-integrity, high-impact tool,” but it must now deliver abatement at a scale that supports net-zero alignment.
As Australia’s industrial emitters rely more heavily on offsets through the Safeguard Mechanism, the review will examine whether the supply of high-quality credits can keep pace — without discouraging direct decarbonisation.
📘 Official source: CCA Issues Paper (October 2025, PDF)

2. Methodologies – the engine room of the scheme

Methodologies determine how carbon projects earn ACCUs — from soil carbon and environmental plantings to energy efficiency and landfill gas conversion.
The CCA notes that several methods expired in 2025 and more will lapse in 2026, creating potential supply constraints. Four new methods are being developed, and a proponent-led method process is underway to accelerate innovation.

However, the consultation flags three persistent challenges:

• Slow method approval due to technical complexity and governance bottlenecks.
• Transparency in how methods are reviewed and endorsed.
• Scalability barriers for smaller or regional proponents.

📘 See more: Clean Energy Regulator – ACCU methods list

3. Market dynamics and price signals

As the government steps back from being the main buyer, Safeguard Mechanism entities now dominate demand for ACCUs.
Prices remain below the cost-containment threshold of $82.68 per tonne (for 2025/26), but analysts expect demand — and price — to rise steadily through the 2030s.
Interestingly, the market is showing price differentiation: ACCUs with biodiversity or community co-benefits often attract premiums, while generic industrial offsets trade lower.

📈 Market data: Reputex ACCU Market Dashboard and Jarden Carbon Market Report.

The CCA is inviting comment on how to design the right incentives:

• What role should government still play in purchasing or guaranteeing demand?
• How can co-benefits (biodiversity, social impact, durability) be priced in fairly?

My take: the assurance and legitimacy angle

From an audit and assurance perspective, this consultation is fascinating.
It signals that the integrity architecture of the carbon market — methodologies, monitoring, and verification — is under as much scrutiny as the credits themselves.
For auditors, this raises several implications:

• Auditability of carbon credits: When corporates include ACCUs in climate disclosures or offset statements under AASB S2, assurance practitioners will need to understand how each credit’s integrity is established.
• Legitimacy through accounting: The consultation’s focus on transparency and public confidence echoes what I explore in my research — how assurance practices make markets legitimate by defining what counts as “real” abatement.
• Future overlap with S2 assurance: As sustainability audits mature under ASSA 5000, ACCU verification processes may evolve toward shared assurance principles.

Put simply: this review isn’t just about carbon farming — it’s about who gets to define credible carbon accounting in Australia’s next policy era.

What businesses and auditors should do now

• Engage early: If your organisation buys, sells, or reports on ACCUs, consider making a submission through the CCA’s Consultation Hub.
• Map exposure: Identify which of your decarbonisation or reporting strategies rely on offsets — and which methodologies those credits come from.
• Track method updates: Projects using soon-to-expire methods should plan for transition or re-registration.
• Prepare for enhanced scrutiny: As integrity and transparency reforms advance, expect more robust documentation and assurance expectations in future reporting cycles.

Final thoughts

The ACCU Scheme has always been a cornerstone of Australia’s climate policy — but it’s also been controversial.
This fifth review gives policymakers, industry, and auditors a chance to strengthen trust in the system before it scales further.
By participating in the consultation, stakeholders can help shape a scheme that balances integrity, efficiency, and inclusiveness — one that rewards genuine abatement rather than paperwork.

🔗 Further reading:

• Climate Change Authority – ACCU Scheme Review 2026 Overview
• Clean Energy Regulator – ACCU Scheme Explained
• Chubb Review Final Report (2023)
• Safeguard Mechanism Reforms Summary

This post reflects my interpretation of public documents and does not constitute professional or financial advice.