Carbon credits explained: Australia's Emissions Reduction Fund under scrutiny

Alex Crowe
Dan Jervis-Bardy
By Alex Crowe, and Dan Jervis-Bardy
Updated March 25 2022 - 12:13am, first published November 30 2021 - 11:00pm
Australia's Emissions Reduction Fund is facing allegations of serious mismanagement. Picture: Shutterstock

Australia's Emissions Reduction Fund is facing allegations of serious mismanagement, with claims millions of taxpayers' dollars have been paid out as carbon credits with no benefit to the environment.

What are carbon credits?

Businesses and individuals can run projects to earn carbon credits for emissions avoidance or storage of carbon dioxide in trees or soil.



Each carbon credit represents one tonne of CO2-equivalent greenhouse gas emissions stored or avoided.

Who is the regulator?

The Clean Energy Regulator is the agency responsible for administering the carbon credit scheme.

Under Energy Minister Angus Taylor, the regulator provides carbon credits, enforces compliance from participating businesses and collects data on what money has gone where.


What claims have been made?

A study by ANU professor Andrew Macintosh, a former chairman of Australia's emissions reduction oversight committee, found serious integrity issues with three project types that accounted for about 75 per cent of carbon credits issued - deforestation avoidance in western NSW, regeneration of native forests, and the combustion of methane from landfills.

ANU professor Andrew Macintosh. Picture: Keegan Carroll

Professor Macintosh claims credit was provided for forests never being cleared, for the planting of trees which were already there, and for the operation of electricity generators at landfills that would have been operated anyway.

What does the government say?

Clean Energy Regulator chairman David Parker used a radio interview on Thursday morning to challenge Professor Macintosh's claims, in particular allegations that concerns about the system had been swept under the rug.

"The Australian carbon credit market is very highly regarded internationally," he told ABC's RN Breakfast

"It is very highly regarded because of the institutional structures, the independent bodies which are there to check the methods which provide for crediting and the administration of it are OK - and those processes have been working well."

Mr Parker said the regulator would examine the new research and release its own findings to the public.

Energy Minister Angus Taylor. Picture: Sitthixay Ditthavong

A spokesman for Energy and Emissions Reduction Minister Angus Taylor also pushed back at Professor Macintosh's criticisms.

"As chair [of the oversight committee], Andrew Macintosh reviewed and signed off on methods that he now claims lack integrity," Mr Taylor's spokesman said. "Is Mr Macintosh now suggesting he provided flawed advice to successive Commonwealth cabinet ministers?"

The spokesman said the price of Australian carbon credits could be up to 10 times the value of international credits, which was evidence of the integrity of the emissions reduction scheme.


Alex Crowe

Alex Crowe

Science and Environment Reporter

Alex covers science and environment issues, with a focus on local Canberra stories.

Dan Jervis-Bardy

Dan Jervis-Bardy

Federal Politics Reporter

Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.

Get the latest Australia news in your inbox

Sign up for our newsletter to stay up to date.

We care about the protection of your data. Read our Privacy Policy.