Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

The government doesn't support either of the motions before the Senate, and I just wish to take a few brief moments to speak about why that is so. In relation to the matters raised by Senator David Pocock and the disallowance moved by the senator around schedules 3 and 4 of the Carbon Credits (Carbon Farming Initiative—Plantation Forestry) Methodology Determination, perhaps I can start with this. We have obviously been through an extended review of the arrangements for the creation of offsets, undertaken by Professor Chubb, and he had this to say in particular about the land sector. He said:

After experimentation and speculation for decades, the only pathway known to science that has the immediate capacity to remove GHG (CO2) from the atmosphere at scale is photosynthesis: the mechanism by which plants and some other organisms use light, CO2 and water to create energy (stored as sugars) to fuel cellular activity and growth.

Science and technology may well develop effective and scalable options to meet the twin challenges of GHG removal and secure long-term (millennial) storage. But to start at scale well before 2050, the land sector will have to carry much of the immediate load, starting now.

I appreciate the points made by the senator in relation to the significance of integrity in this sector and, indeed, the government shares the senator's interest in ensuring that the credits created through the ACCU scheme are of the highest integrity and that the public might have confidence in those credits. That is precisely why we commissioned the review and it's precisely why we have committed to implementing the recommendations made by Professor Chubb.

In relation to the specific mechanism, the plantation forestry method, it allows forest growers to generate Australian carbon credits units by storing carbon in plantation forests. The current method builds on an earlier version. It includes two new activities for keeping forests on land where plantations would otherwise be converted back to non-forest land. The method provides for additional abatement because evidence shows that plantation establishment rates are very low and existing plantations are being replaced with other land uses. Projects using the new activities also need to meet several specific tests to show that they are additional. These tests include providing a declaration and independent financial analysis showing the plantation would otherwise be converted to a more financially attractive land use.

The review undertaken by Professor Chubb did not consider the plantation method specifically, but it did conduct a serious review of the scheme, its governance arrangements and the offsets integrity standard. It was this offsets integrity standard that was used to develop these new schedules to the plantation method. The review found that the offsets integrity standard for developing our key methods is appropriate and consistent with good governance, well regarded by stakeholders and experts and supports confidence in the integrity of ACCUs and the scheme. Specifically, the review found that the overall scheme arrangements are sound and robust, with appropriate checks and balances at the scheme, method and project levels to protect the integrity of the scheme and the credits created under it.

I will say this, though: the panel made some important and sensible recommendations to improve the scheme, including around transparency and governance, especially given that we are now at beyond 10 years of operation of this scheme. In particular, the review recommended that the standards should be clearly defined and supplemented with ACCU scheme principles to support consistent application, and it made recommendations on how questions regarding the application of the offset integrity standard and method variation should be considered and undertaken. Recommendation 6 specifically addresses an opportunity to improve, by stating:

The Offsets Integrity Standards (OIS) should be clearly defined and supplemented with ACCU Scheme Principles …

We have accepted all of the review's recommendations in principle.

We are working through implementation now, but it will produce changes in scheme governance, and we would expect that the ACCU scheme would continue to examine all of the methods to ensure that we are using best practice and doing everything we can to ensure the integrity of the scheme and to, indeed, enable the confidence that Senator Pocock referred to in his opening remarks. I will say, though, that these new structures present, or offer us, the best way— (Time expired)