Australia Cancels 700 Million Metric Tons Kyoto-Era CO2 Credits

Australia Cancels 700 million Metric Tons Kyoto-Era CO2 Credits 0 Carbon Herald

Australia has permanently canceled 700 million mtCO2e worth of CO2 credits that were carried forward from the Kyoto era. That means that the country’s future governments will be prevented from using the offsets to meet Australia’s climate goals. The news was announced by Chris Bowen, Minister for Climate Change & Energy, on Sept. 15 during a speech at the 10th Australasian Emissions Reduction Summit.

The Kyoto Protocol, established in 1997, allowed developed countries to retain surplus carbon credits if they exceeded their committed emission reduction targets. 

However, several developed nations, including Germany, the UK, Denmark, the Netherlands, and Sweden, have already taken the voluntary initiative to cancel their remaining Kyoto-era credits. Climate experts have criticized the use of such accounting mechanisms as a loophole in the fight against climate change.

The Kyoto-era carbon credits “were never more than an accounting trick to try and make it look like we’re on track to make commitments and targets,” Bowen said. He stated that the previous government had maintained the carryover credits as a potential resource for future use, and these credits have remained on Australia’s financial records as an available option.

Although the current government has pledged not to employ the Kyoto-era credits for attaining emissions reduction objectives, nothing would prevent a future government from resorting to them, according to Bowen.

“So today I’m pleased to announce that those carryover credits for the last decade, equaling more than 700 million mt representing more than a year’s worth of national emissions, have now been permanently canceled,” the minister said, adding that good climate and energy policies are good for the economy as well. 

This August, the Australian government unveiled a consultation paper outlining proposed revisions to the nation’s carbon market, known as the Australian Carbon Credit Unit or ACCU Scheme. These proposed changes encompassed various recommendations put forth in the Chubb Review, an expert evaluation conducted previously to address integrity concerns within the system.

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This paper is currently open for feedback until October and encompasses several key areas. These include the establishment of fundamental principles for the creation of new emissions reduction methodologies, enhancements in transparency, and the introduction of a fresh process for the development of novel methodologies.

One of the recommendations was to permit project proponents to take the lead in introducing new methods, rather than having the government initiate them. This proposed system would involve the issuance of expressions of interest (EOIs) followed by subsequent regulatory approvals.

During his speech, Bowen announced the release of interim guidelines for individuals or groups interested in proposing new methods for emission reduction projects. The more effectively proponents can utilize this guidance in their expressions of interest, the sooner the country can establish robust methods that maintain integrity and enable the adoption of innovative abatement technologies, he said.

Bowen said that achieving the nation’s climate targets requires investments that enhance future competitiveness and stimulate economic growth. He highlighted key initiatives such as the $1.7 billion energy savings package, the $20 billion Rewiring the Nation plan, and the Capacity Investment Scheme, which support the transition to cleaner and more affordable renewable energy sources.

He also highlighted the recent overhaul of the nation’s compliance emissions trading scheme, known as the Safeguard Mechanism, as a significant milestone that will result in a reduction of 200 million metric tons of emissions by 2030.

As of September 14, Platts, a division of S&P Global, evaluated Australian Carbon Credit Units (ACCU), the instrument employed under the Safeguard Mechanism, at AU$34.95 (USD$22.57) per metric ton of CO2 equivalent.

Read more: Strengthened Safeguard Mechanism Passes Federal Parliament In Australia

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