With abundant natural resources and energy-intensive industries, Australia is a country with significant potential in both supply and demand for carbon credits on the road to net zero.
The recent reform of the Federal Government’s Safeguard Mechanism for heavy emitters, coupled with the rise in sustainability ambitions generally, means accessing carbon markets is now an important transition tool for many organisations as interim deadlines fast 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 organisations. 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 different jurisdictions. Australia allows credits generated by certified carbon abatement projects – like forms of land management or energy efficiency – to offset emissions when considered as part of a credible hierarchy of transition planning which prioritises avoiding emissions first. This generation of credits is done through what is known as the Australian Carbon Credit Unit (ACCU) Scheme, which supports investment in projects to reduce emissions across all sectors of the economy.
Approval of carbon credits under the scheme aims to ensure the credibility of units generated through registered projects run to reduce emissions or store carbon in soils and vegetation. Projects are registered through the Clean Energy Regulator and must follow one of the currently active and approved methods to maintain integrity of the greenhouse gas emissions cuts represented by the carbon credits.
NAB’s 2022 Renewables Survey noted about 90 per cent of ASX-listed top 50 companies had established renewable energy and net-zero targets, with nearly 60 per cent planning to use carbon offset strategies to help achieve their goals.
At the same time, less than 5 per cent of respondents were currently active in carbon markets, the survey found, highlighting the potential shift in demand from these companies as 2025 and 2030 emission targets approach.
READ FULL ARTICLE: https://business.nab.com.au/navigating-carbon-markets-for-net-zero/