The Business Council of Australia (BCA) welcomes the opportunity to contribute to the Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill Consultation Paper.
The BCA represents more than 120 of Australia’s leading businesses, employing around 1.1 million people. We are a member led organisation and our submissions reflect engagement with those members and the expertise and practical experience they bring.
With respect to the implementation of changes to the Australian Carbon Credit Unit (ACCU) scheme, the BCA can’t overstate the importance of maintaining investors’ confidence in both the environmental integrity of ACCUs and the market framework delivering ACCUs over time. The ACCU scheme is a critical piece of Australia’s broader climate policy framework which includes the Safeguard Mechanism and a range of other measures to drive emission reductions across the economy in pursuit of Australia’s climate targets.
We note that the Government is proposing a series of amendments to the Carbon Credits (Carbon Farming Initiative) Act 2011, based on several reviews of the ACCU scheme in recent years — by the Independent Review Panel (in 2022), the Climate Change Authority (in 2023) and the Department of Climate Change, Energy, the Environment and Water (in 2023).
The BCA supports a range of improvements to the ACCU scheme, some of which are reflected in the proposed amendments and others which are not. In our view, these reforms will strengthen the integrity, transparency and credibility of the scheme, while also supporting effective market development and investment confidence.
- Establish an ACCU Market Statement of Opportunities (ASOO) — where the ASOO is developed by an appropriate agency, such as the Clean Energy Regulator — and legislate it use by CAIC and other agencies in performing their functions and developing policy.
- Expand and accelerate Australia’s method development pipeline by making more government resources available to the task and by increasing the efficiency of method development processes generally.
- Support greater confidence and trust in the ACCU scheme operation via greater transparency and timely disclosure of ACCU project level information.
- Support greater confidence and trust in the government’s approach to market development via greater transparency of policy thinking and objectives and greater transparency of advisory sources, particularly where these sources are relied upon by government to make policy and regulatory changes.
- Minimise the overall level of risk and uncertainty associated with participating in the ACCU scheme by adopting a more competitively neutral and timely approach to the release of scheme information.
- Maximise the potential scale of the ACCU scheme by taking a long term policy design perspective, including the development of a comprehensive and evolving long term carbon market strategy.
- Government must continue to provide and support clear messaging about the valid and positive contribution the ACCU scheme is making towards meeting Australia’s emission reduction targets — and potentially the emission reductions targets of other countries under Article 6 of the Paris Agreement.
- Any and all future forms of government intervention in the ACCU market must be based on robust evidence of market failure and supported by i) cost benefit (regulatory impact) analysis to demonstrate that the intervention is efficiency enhancing, ii) the provision of use cases to illustrate the problem being solved for in a market context, and iii) adequate industry consultation.
- As a general rule, significant changes to the ACCU scheme, especially those involving new ministerial powers, should be grandfathered with respect to ACCUs created before changes take effect, to minimise regulatory risk and the long run cost of abatement.
- Adequate time for consultation with stakeholders on legislative amendments is critical to delivering continuous improvements to the ACCU scheme and we believe that 3 weeks is insufficient given the breadth and detail of the package of proposed changes — past reviews and recommendations are useful in developing policy changes but they do not serve as consultation on actual legislative amendments.
- The voluntary market based method for estimating scope 2 emissions needs to be aligned with other reporting frameworks (such as the surrender of ACCUs under the Safeguard Mechanism and the Australian Sustainability Reporting Standard) by allowing largescale generation certificates to be surrendered after the reporting period, rather than within the reporting period as is currently required.