Australian Carbon Credit Unit Scheme explained

Definition

The Australian Carbon Credit Unit (ACCU) Scheme is a government-managed program designed to support activities that reduce or remove greenhouse gas emissions.

What is the Australian Carbon Credit Unit Scheme?

Under the scheme, ACCUs are issued to businesses, landholders, and organisations that engage in approved carbon offset projects. Each ACCU represents one tonne of carbon dioxide equivalent (CO2-e) emissions reduced or removed from the atmosphere.

The scheme operates as part of Australia’s broader efforts to meet its climate targets and obligations under international agreements. It provides a financial motivation for participants to undertake projects that contribute to carbon emission reductions. By participating in the scheme, organisations can generate ACCUs based on verified emissions reductions or removals achieved by their projects.

To participate, project developers must follow specific standards to make sure that their projects meet the scheme’s requirements for additionality, stability, and verifiability. The Clean Energy Regulator oversees the validation, verification, and issuance of ACCUs, making sure that the credits represent real and quantifiable emissions reductions.

ACCU holders can sell their credits on the carbon market or use them to meet compliance obligations or other carbon pricing mechanisms. The scheme aims to promote investment in emission reduction technologies and practices, contributing to Australia’s overall goal of reducing climate change and achieving net-zero emissions.

Example of the Australian Carbon Credit Unit Scheme

A forestry company in Victoria plants a large number of trees as part of a carbon offset project under the Australian Carbon Credit Unit Scheme. After successfully establishing and maintaining the forest, the company undergoes verification to confirm that their project has effectively removed carbon dioxide from the atmosphere and the company is issued ACCUs based on the amount of carbon removed.

The company can then sell these ACCUs on the carbon market or use them to offset its own emissions, reducing its carbon footprint. By participating in the scheme, the company not only generates additional revenue from selling ACCUs but also increases its environmental credentials and aligns with sustainability goals.