Australia did not need to abandon Climate Active’s legacy for uncertain future promises; it needed to evolve the scheme into a stricter, immediate performance outcome model with more meaningful carbon credits as a part of it.
The Australian government’s closure of the Climate Active certification scheme represents a stark paradox in federal climate policy. Among its rationale for closing down the program, the government cited a shift in public sentiment away from “carbon neutrality” claims that include the use of voluntary offsets.
Yet, it simultaneously justified this closure by pointing to the success of its reformed flagship climate policy: the Safeguard Mechanism. This structural pivot reveals a glaring hypocrisy. While the government actively penalises corporate citizens for utilising voluntary offsets to claim carbon neutrality, it mandates that the nation’s largest industrial emitters use those exact same offset structures to meet compliance targets.
Given that nearly 200 million Australian Carbon Credit Units (ACCUs) have been created and only 2.6 million voluntarily retired in Climate Active claims, surely the mandated Safeguard Mechanism where most ACCUs are used should face similar scrutiny.
This policy dualism unfairly targets voluntary action of organisations working within rules that provided rigor and transparency, and with that transparency came accountability.
Were all of the Climate Active rules perfect? No! Most of them were just good and drove practical progress but some genuine concerns existed around the offsets and the boundaries that were assessed for some products.
In a world where doing everything, everywhere, all at once should be the mantra, Climate Active allowed organisations and their customers to really test what’s possible today. And that is the great thing about transparency. You can see what the claim really amounts to and take action if you think it is misleading. The alternative is a black box or a promise of future action that may never come about.
Critics often dismiss Climate Active as a simple “pay-to-comply” mechanism, ignoring the fact that the scheme already implemented a robust framework.
Participants were required to calculate full Scope 1, 2, and 3 footprints where they had control, publicly disclose detailed emissions breakdowns, and prove ongoing internal reduction initiatives before buying offsets to compensate for residual emissions.
And then they had to disclose what offsets they used. By killing the program instead of evolving its established architecture, the government has left proactive organisations without a validated, structured pathway to demonstrate genuine carbon management outcomes. This is the important distinction Climate Active certified against outcomes today.
The alternatives that the government has put forward are mandatory corporate disclosure (not products) and promises of future changes and this includes continuing with unabated emissions that add to climate change problems.
The mandatory ASRS S2 greenhouse gas inventories don’t substitute for carbon neutral certification. They might be useful measures that influence the allocation of capital by investors but, for example, they don’t help a tenant determine which building they should move into.
Putting the issues of poor and ever-changing alternatives aside, the core of this hypocrisy lies in the carbon units the government accepts.
The Safeguard Mechanism relies on Australian Carbon Credit Units (ACCUs) at a far higher level than voluntary actions in Climate Active. The methods used to create the vast majority of ACCUs do not meet the standards laid out by the Net Zero Guidelines, (IWA 42) which the government puts forward as an alternative for voluntary claims (although it is not a standard with rules for making claims for current carbon performance outcomes).
Many ACCUs are far from “high integrity,” and plagued by persistent scientific credibility issues regarding their “realness” and baseline additionality.
Furthermore, when measured against international criteria like International Workshop Agreement 42 (IWA 42), only a tiny fraction of the ACCU market holds up; they either do not meet the requirement for carbon removal or they are not permanent (align with the lifetime of the emissions).
It’s estimated that less than 10 per cent of ACCUs would meet the requirements of the guidelines that the government is recommending as an alternative to Climate Active for voluntary action, yet all ACCUs are perfectly acceptable for their compliance requirements on the country’s largest polluters.
This reality exposes the danger of anchoring national climate policy in diplomatic compromises rather than absolute biophysical constraints. Corporate climate risk and net zero pathways are often framed around aligning with a “carbon budget” trajectory negotiated in international agreements. However, the atmosphere does not respond to political compromises or 25-year accounting tricks.
The fundamental physics of climate change dictate that every single tonne of unabated emissions released into the atmosphere today permanently worsens the climate challenges of the future. Just as a bird in the hand is better than two in the bush, a delivered and verified carbon neutral outcome today is better than continuing to add to atmospheric emissions today but promising to follow an emissions reduction pathway in the future.
Yes… eliminating emissions is the best course of action. Then residual emissions should be compensated for in the best possible way and in the knowledge that what can reasonably be considered residual emissions today (within technical and financial feasibility) will be quite different to the residual emissions of 2050.
As a bonus, offsetting with high integrity carbon credits puts a reasonable price on carbon which makes emitting a more expensive business and therefore low/no emissions alternatives become more financially feasible. This is the well understood basic economic concept that underpins carbon pricing mechanisms.
However, it seems that all offsets and carbon credits have been tarred by the same brush. Relying on cheap low-integrity and short-term credits to justify ongoing fossil fuel emissions is not OK. It doesn’t make a real difference for the climate and it doesn’t present a commercial case to change. Instead, it shifts an irreversible physical burden onto future generations.
Rather than addressing this physical reality, international frameworks are pivoting toward forward-looking alignment standards like the proposed ISO 14060.
However, relying on these new frameworks introduces a different, dangerous risk: they shift focus away from immediate, verifiable performance toward long-term, future projections.
Forward commitments are inherently uncertain. Just as government policies pivot and public sentiment shifts, corporate boards and executives change. A promise made today to achieve deep decarbonisation by 2040 can easily be rewritten or abandoned by a future leadership team long before it is ever delivered. Let’s not forget that a previous iteration of future commitment pathways in the Energy Efficiency Opportunity reporting requirements was abolished by a change in government in 2014.
Forward projections and promises effectively kick the can down the road, creating an illusion of progress while emissions continue unabated today.
On the flip side, immediate and verifiable performance to avoid worsening the impacts of climate change reduces uncertainty and passing the buck to others. Numerous scientific reviews have concluded that high quality carbon credits such as ones that restore and permanently protect biodiversity should be a part of decarbonisation efforts. They can also address twin dilemmas of climate change and global biodiversity loss. This is what the Government should have done with Climate Active (and its Safeguard Mechanism)… evolve it to tighten boundaries on claims and strengthen the emission reduction planning requirements but most of all fix the offsets that it allowed into the scheme.
On scientific and economic rationale, Australia did not need to abandon Climate Active’s legacy for uncertain future promises; it needed to evolve the scheme into a stricter, immediate performance outcome model with more meaningful carbon credits as a part of it.
A suitable replacement must leverage Climate Active’s existing, highly capable carbon accounting and public disclosure rules but restrict the offset mechanism exclusively to high-integrity, permanent removals, like environmental plantings that offer verified carbon sequestration and immediate biodiversity support. This would require additional mechanisms to drive investment into environmental planting to close the gap between the investment requirements and time it takes for forests to grow.
By anchoring corporate voluntary recognition (and compliance requirements) to verified emissions cuts and permanent removals, the government would eliminate its own policy hypocrisy. More importantly, it would incentivise organisations to take the immediate, unalterable physical action required to protect both the atmosphere and our ecosystems today, rather than betting the future on the fickle nature of government policy, popular opinion and corporate governance.
