The Albanese government in Australia has made the decision to cancel the Commonwealth-held Kyoto Protocol units as part of their commitment to not utilize these credits to meet global carbon emissions reduction targets. The Department of Climate Change, Energy, the Environment, and Water (DCCEEW) stated that the federal government has canceled over 700 million credits, which is equivalent to more than a year’s worth of national emissions.
The Kyoto Protocol’s carry-over credits were given to countries when they exceeded their required emissions reduction target. These credits could be accumulated and used to meet emissions reduction targets, including Australia’s objectives under the Paris Agreement.
Australia is currently aiming for a 43% emissions reduction by 2030 and to achieve net-zero emissions by 2050. The DCCEEW department expressed concerns that the availability of the Kyoto protocol units, which were accumulated by Australia a decade ago, could be used for “dodgy accounting tricks” in the future.
The Albanese Government has fulfilled its election commitment to legislate ambitious yet achievable climate targets, according to Climate Change and Energy Minister Chris Bowen. He stated that this allows Australia to participate in global decision-making, attract crucial investments in cleaner and more affordable energy, and safeguard industries for the future. Bowen criticized the previous Morrison government for holding onto the credits due to their limited efforts to reduce emissions.
Climate Change and Energy Assistant Minister Jenny McAllister added that the federal government’s policies, such as the Safeguard Mechanism, Rewiring the Nation, and the Capacity Investment Scheme, will contribute to Australia’s climate ambitions. McAllister emphasized that they are rectifying a decade of neglect and denial while rapidly decarbonizing the economy to become a renewable energy powerhouse.
In early 2024, international review processes under the Kyoto Protocol will officially confirm Australia’s compliance with its Kyoto Protocol CP2 target of reducing emissions to 5% below 2000 levels.
The DCCEEW has released the Australian Carbon Credit Unit (ACCU) Method Development Interim Framework, which incorporates recommendations from the ACCU independent review. This includes replacing the Emissions Reduction Assurance Committee with the Carbon Abatement Integrity Committee and establishing a proponent-led method development process. These changes aim to provide stakeholders with the flexibility to develop or adapt new approaches to carbon abatement.
The Carbon Market Institute (CMI) welcomed the federal government’s decision to cancel the Kyoto protocol credits and the introduction of the ACCU method development interim framework. CMI CEO John Connor stated that the next step is to accelerate climate investments in order for Australia to contribute to achieving the goals of the Paris climate agreement. He believes that canceling the credits is an important transition to the Paris Agreement era for Australian policy and commitments, and emphasizes the need to continue building on this momentum and develop the government’s strategy for using carbon markets in various sectors of the net-zero plan. This will solidify the role of the crediting framework in the broader transition.