Australian Carbon Credit Units (ACCUs) are issued by the Australian Government through a regulatory framework established under the Carbon Credit (Carbon Farming Initiative) Act 2011 (the CFI Act). The Clean Energy Regulator (CER) has primary responsibility for administering the ACCU scheme.

Under the ACCU scheme, ACCUs are generated by registered projects that reduce emissions or store carbon in line with rules set under legislative instruments called methodology determinations (ACCU methods). Project proponents register projects under an approved ACCU method and generate ACCUs according to the abatement achieved.

The Australian Government has identified the ACCU scheme will play a role in Australia achieving its 2030 and 2050 emissions reduction targets. This audit provides assurance to Parliament on the CER’s regulatory activities in relation to ACCU issuing and compliance, and contract management activities related to ACCU purchases.

Key findings:

• Administration of the issuing, compliance and contracting of ACCUs was largely effective. The CER’s ACCU issuing, compliance and contracting activities are consistent with the CFI Act and Australian Government frameworks. There are opportunities to address weaknesses in the information systems used to administer the ACCU scheme as well as further improve monitoring and reporting related to compliance and conflict-of-interest declarations.
• The development of ACCU methods and the issuing of ACCUs was largely effective. While the CER and responsible departments effectively administered the development of ACCU methods between November 2020 and February 2023, a CFI Act requirement to provide ongoing ministerial updates of interests declared by Emission Reduction Assurance Committee (ERAC) members was not met.
• The CER has implemented an effective approach to ACCU scheme compliance activities. The CER has established and implemented a compliance framework that incorporates the range of regulatory powers provided under the CFI Act.