Navigating Carbon Markets to Achieve Net Zero

With abundant natural resources and energy-intensive industries, Australia has significant potential for both the supply and demand of carbon credits on the path to net zero.

The recent reform of the Federal Government’s Safeguard Mechanism for heavy emitters, combined with the growing emphasis on sustainability, has made accessing carbon markets a crucial transition tool for many organizations as interim deadlines approach.

“There’s definitely been an accelerating level of interest in addressing and accessing carbon market solutions this year leading up to and following the introduction of the reformed Safeguard Mechanism,” says NAB Head of Carbon and Commodity Sales Sam McEvoy. “This is a function of the Safeguard Mechanism itself but also of the momentum, both domestically and globally, around transition planning for organizations. Carbon markets will have a role to play in helping Australia on the way to net zero as part of these strategies.”

Different forms of carbon markets apply in various jurisdictions. In Australia, credits generated by certified carbon abatement projects—such as land management or energy efficiency—can offset emissions as part of a credible hierarchy of transition planning that prioritizes avoiding emissions first. This generation of credits is facilitated through the Australian Carbon Credit Unit (ACCU) Scheme, which supports investment in projects to reduce emissions across all sectors of the economy.

The approval of carbon credits under this scheme aims to ensure the credibility of units generated through registered projects designed to reduce emissions or store carbon in soils and vegetation. These projects are registered through the Clean Energy Regulator and must follow one of the currently active and approved methods to maintain the integrity of the greenhouse gas emissions reductions represented by the carbon credits.

NAB’s 2022 Renewables Survey noted that about 90 percent of ASX-listed top 50 companies had established renewable energy and net-zero targets, with nearly 60 percent planning to use carbon offset strategies to help achieve their goals.