New Carbon Credits Amendment Bill 2026 targets Great Koala National Park to enforce strict additionality rules for ACCUs

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Context of the Carbon Credits Amendment Bill

On 22 June 2026, Federal Member for Lyne Alison Penfold MP introduced the Carbon Credits (Carbon Farming Initiative) Amendment Bill 2026 as a private member’s bill in the House of Representatives. The bill targets one of the most foundational principles underpinning Australia’s carbon market: additionality. Specifically, it challenges the use of Australian Carbon Credit Units (ACCUs) to fund state government decisions that were already made before any carbon project was registered, with the proposed Great Koala National Park in New South Wales serving as the central case in point. The bill has drawn strong backing from the Australian Forest Products Association (AFPA), which has publicly argued that the integrity of the ACCU scheme depends on credits representing genuine, additional abatement rather than retrospective compensation for pre-determined policy outcomes.

Penfold’s argument is direct: the ACCU scheme was never designed to pay governments, businesses, or individuals for actions they had already committed to taking. Where a state government has announced, as an election commitment, that it will end public native forest harvesting in a given area, crediting that decision through a federal carbon methodology does not represent new abatement. It represents accounting for a decision already embedded in policy. The bill would respond to this by requiring the Federal Minister to only approve ACCU methodologies that are fully consistent with the Objects of the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth), and by mandating that all underlying science and supporting information be released for public consultation before any methodology receives approval.

For environmental professionals, sustainability advisers, and corporate clients managing offset portfolios and net-zero commitments, this development is material. The bill directly implicates the Improved Native Forest Management (INFM) method, a newly registered methodology that has attracted significant attention as a potential vehicle for large-scale nature-based carbon credits. If the bill progresses or its principles gain regulatory traction, the anticipated supply of INFM-derived ACCUs could be substantially constrained, with flow-on consequences for credit pricing, corporate offset procurement strategies, and the risk profile of carbon project investments.

Key details of the Carbon Credits Amendment Bill 2026 and additionality requirements

The Carbon Credits (Carbon Farming Initiative) Amendment Bill 2026 proposes two principal legislative changes to the existing framework under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth). First, it would require the Federal Minister to be satisfied that any proposed ACCU methodology is fully consistent with the Objects of the Act before granting approval. Second, it would require all scientific evidence, modelling, and data supporting a methodology to be publicly released and subject to independent scrutiny as a precondition of approval. Both requirements are aimed at closing what the bill’s proponents characterise as a structural gap that allowed the Improved Native Forest Management methodology to be registered without sufficient transparency or additionality rigour.

The additionality test is the mechanism by which the ACCU scheme distinguishes genuine abatement from business-as-usual outcomes. Under the current framework, a project must demonstrate that the carbon abatement it delivers would not have occurred in the absence of the carbon incentive. The bill’s central contention is that where a state government has already committed, through an election platform, to cease native forest harvesting in a defined area, the cessation of that harvesting cannot satisfy the additionality test. The abatement would occur regardless of any ACCU payment, because the policy decision driving it was taken independently of the carbon market. Penfold characterised this arrangement as one that “corrupts” the carbon market’s integrity by conflating policy implementation with genuine market-driven abatement.

The Improved Native Forest Management method, against which this bill is most directly targeted, was registered as an eligible ACCU methodology and allows landholders and, critically, government land managers to generate credits by modifying native forest harvesting practices. The method calculates abatement based on changes to carbon stocks resulting from reduced or ceased timber harvesting. In the context of the proposed Great Koala National Park, which has been a longstanding policy commitment of the NSW Government, the application of this method raises a direct additionality question: if the park was already a committed government policy outcome, what additional abatement does the ACCU payment deliver beyond what would have happened anyway?

The broader context for this bill is the structural reform process initiated by the Independent Review of Australian Carbon Credit Units, commonly referred to as the Chubb Review, which reported in 2022. The Chubb Review identified significant concerns about the integrity and transparency of several ACCU methods and recommended a series of reforms to strengthen public confidence in the scheme. The Amendment Bill 2026 can be understood as a legislative response to ongoing community and industry concern that those reforms have not gone far enough, particularly where large-scale nature-based methods interact with state government policy decisions. The AFPA has argued publicly that allowing government entities to generate ACCUs from pre-committed policy actions distorts the market in ways that disadvantage private-sector project developers who must demonstrate genuine additionality.

Australian context: ACCU additionality rules and implications for carbon project developers and offset buyers

Australia’s carbon crediting framework is established under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth), administered by the Clean Energy Regulator. The additionality principle sits at the core of this framework and governs whether a project is eligible to generate ACCUs. For corporate buyers managing offset portfolios and net-zero commitments, the integrity of that principle is directly relevant to the quality and reputational risk associated with the credits they procure. A methodology that credits pre-committed government policy outcomes, rather than genuinely additional abatement, exposes offset buyers to the risk that their purchased credits do not represent the emissions reductions they purport to. The progression of this bill, and the regulatory scrutiny it signals toward the INFM method, warrants close monitoring by all parties with exposure to nature-based ACCUs in their offset procurement strategies.

References and related sources

• Primary source: woodcentral.com.au
• trackgov.com
• openaustralia.org.au
• ausfpa.com.au
• arr.news

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This is an iEnvi Machete news summary. Prepared by iEnvi to summarise the source article for contaminated land, groundwater, remediation, approvals and site risk professionals.

Published: 28 Jun 2026

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