Ben Potter wrote for The Energy that the Abbott-era Emissions Reduction Fund, government policy to encourage carbon abatement projects, is undergoing a “slow and financially painful” burial.
The policy involves encouraging organisations and individuals to adopt carbon abatement projects such as soil sequestration, reafforestation and vegetation regeneration methods with the promise to buy and extinguish these Australian Carbon Credit Units (ACCUs) at agreed prices.
But participants in that scheme who have been overcommitted might be paying tens of millions of dollars to the government to cover the shortfall, said market researchers Reputex, which reveals there were still 84 million ACCUs outstanding under the fixed delivery carbon abatement contracts (CAC).
Because of this, the Albanese government announced a permanent exit arrangement for these CACs; however, the researchers said large CAC holders of around 62 million ACCUs will not meet the conditions of the exit arrangement because of the stricter process introduced by the Clean Energy Regulator during the Albanese government’s first term.
Head of carbon research Anton Firth said the move was likely counterproductive and likely to force insolvency on developers. However, while the failure rate for ERF was “relatively high”, the wider market for ACCUs is still enjoying “strong growth in registrations and issuance.”
But this report says otherwise
The new Australia Carbon Market Outlook 2026 by EY said ACCU prices are projected to remain flat at $30 to $35 a tonne of carbon dioxide equivalent “until at least 2028,” which means Australia could risk falling short of its 2035 emission reduction targets.
The report calls on the government to expand its safeguard mechanisms, which demand the nation’s industrial sector, which is responsible for more than a quarter of national emissions keep to its emissions baselines, with the baseline decreasing 4.9 per cent each year until 2030.
The big four firm says that without a clearer policy signal before 2028, businesses can delay investment into long-term abatement technologies such as electrification, process heat transformation and land-based carbon removals.
New ACCU is the largest nature based
The Clean Energy Finance Corporation has flagged up to $40 million investment alongside River Capital into a new project in the Tiwi Islands in the Northern Territory. The project is expected to become the nation’s largest nature based initiative and owned by Tiwi Plantation Corporation, a collaboration company amongst all eight Tiwi clans.
The project involves planting 30,000 hectares of native Eucalyptus pellita trees, which the company says will support local ownership, which helps foster economic equity for the clans through training programs, employment pathways and other long-term opportunities for the community.