Carbon credit projects would face tighter checks
Farmers, First Nations (Aboriginal and Torres Strait Islander) groups and businesses earn carbon credits for cutting or storing pollution. This bill would change who must agree to projects and who checks the rules. It would change how bad methods are shut down and how the government buys credits. It also tweaks pollution reporting and the new car rules.
Official name: Carbon Credits and Other Legislation Amendment (Integrity and Transparency) Bill 2026
- Native title holders are First Nations people whose land rights the law accepts. They and people with a land claim would have to agree before a carbon project starts on their land.
- The expert panel that checks carbon credit methods would get a new name and more powers. It must include a First Nations member.
- The minister could force projects off a method that fails the honesty rules, after warnings and public comment.
- Buying credits would move from the scheme's watchdog to the climate department. Price would be one of several things that count.
- More company pollution data could be published. Some deadlines in the new car rules would move.
Who it affects
- Native title holders and people with a land claim: They would have to agree before a carbon project is approved on their land. No credits would flow until they agree on how it is run.
- Farmers and landholders with carbon projects: They get more choice on timing and methods. But they could be made to switch methods or hand back credits if too many were given.
- Agents who run carbon projects for others: Agents who apply for landholders would face the same honesty check as the landholders.
- Big companies that report pollution: More of the pollution and energy data they report could be made public.
- Car importers and makers: They would get later deadlines to settle their results under the new car rules.
Doubts over carbon credit methods
Under the national carbon credit scheme, people earn a credit for cutting the gases that heat the planet. They can also earn credits for storing carbon. Examples are regrowing trees or managing fire on open grassy land in the north. They can sell those credits.
Big industrial polluters have limits on their pollution under a law called the Safeguard Mechanism. They can buy credits to help meet their limits. From 2014 to 2023 the government was the biggest buyer. Now these big polluters buy the most.
Each type of project follows a method. A method is a rulebook. It sets out how to measure the carbon saved and how many credits a project earns.
In 2022 people worried that some methods were not honest. So the government set up an outside review panel. It is known as the Chubb Review. It found the scheme was well built but said it needed changes.
The Climate Change Authority advises the government on climate. It also reviewed the scheme in 2017, 2020 and 2023. This bill puts many of these ideas into law.
The government's targets are to cut pollution 43 per cent below 2005 levels by 2030. It aims for a cut of 62 to 70 per cent by 2035. The Assistant Minister for Climate Change and Energy, Josh Wilson, brought in the bill.
Native title holders must agree
Native title means the rights of First Nations people to land under their own laws and customs, as Australian law accepts them.
The law already says people with a stake in the land must agree to many carbon projects. The bill adds people who have made a native title claim to that list.
This matters because native title cases can take many years in the Federal Court, a national court. Until now, people with a claim could miss out on having a say about projects on the land they claimed.
The bill sets up two steps. First, native title holders or people with a claim must agree to the project being applied for. Only then can the Clean Energy Regulator sign it up. That agency runs the scheme. Second, no credits are given until they also agree on how the project will be run.
Today a project can be signed up and run for up to five years before it shows it has agreement. The Chubb Review said this gave the people behind the project an unfair edge in talks.
The agency could cancel a project if there is no real chance of getting agreement by the end of its first reporting period.
The bill also says state and federal ministers do not need to agree to projects in one case. That is land where native title holders have the sole right to hold it. The government says this was always the plan.
A new integrity committee
An outside expert panel gives advice on methods. The bill gives it a new name, the Carbon Abatement Integrity Committee. Abatement means cutting pollution. Its members and past decisions carry over.
At least one member must be Aboriginal or Torres Strait Islander. Members must be experts in set fields. They cannot do paid work that clashes with their duties.
The panel gets new powers to ask for outside advice and papers. It can tell the minister which new methods should be built first. It can also review methods that are about to run out.
It must publish its advice to the minister. Private business details are protected.
The panel can already pause new projects under a method if there is good proof it breaks the honesty rules. The bill stretches the longest pause from 12 months to 18 months. The time for public comment on new methods grows from 28 days to 45 days.
Changing how credits are bought
Right now the same agency both checks the scheme and buys credits for the government. The Chubb Review said this could look like a clash of interests.
The bill moves buying to the head of the climate department. The head can hand this job to senior staff in other agencies, but not to the agency that checks the scheme.
It also changes the buying rule from lowest cost to good value. Price still matters. But the government could also weigh gains for nature, communities and First Nations culture.
Closing faulty methods
When a method is found to be faulty, the government can stop new projects using it. Projects already running can keep using the old method until their time to earn credits ends. They can choose to switch sooner.
The bill lets the minister make a switch order for a method. Projects on that method would then stop earning credits unless they move to another method.
The minister can only do this if the method breaks the honesty rules and keeping it would be a real risk to the scheme. Every project hit must be able to move to at least one other method that suits it.
The panel must ask the public for comment before it gives advice. The minister must also ask. Both the advice and the minister's reasons must be published.
A switch order starts at least six months after it is made. The latest start is two years for projects that avoid pollution. It is five years for projects that store carbon.
Early starts and research
A project normally must be new to earn credits. Right now it must not start before the agency approves it.
The bill lets a project start as soon as the application goes in, while the agency checks it.
There is also a let-off for real research. Say a farmer helped test a new way to store carbon in soil, and it later became a method. That test would not stop them joining the scheme under the new method.
Tougher checks
There is an honesty check that keeps out people with a record of cheating or serious rule-breaking. It would also apply to agents who apply for projects for other people.
Being broke and unable to pay debts would become something the agency thinks about. But it would no longer rule someone out on its own. This could help when credits would get a struggling landholder back on their feet.
The agency could hand out on-the-spot fines for smaller rule-breaking and publish details of them. It could also undo decisions made on false or misleading facts.
Handing back credits
The bill adds a way for a project to choose to hand back credits if it gave wrong facts by mistake.
The agency could also make a project hand back credits. This would happen when new facts show the project got credit for more carbon than it really saved.
A landholder who owes credits could still get new ones. The debt would be taken from the next batch. Landholders could also take land out of a project by handing back the matching credits.
Other carbon scheme changes
One method could cover both storing carbon and cutting other pollution on the same farm. This backs a planned method for whole-farm projects.
Projects could move between some methods more easily, such as switching between fire methods for the north. Rules on reporting, keeping records and checking would be made simpler.
The scheme's public list of projects would get a new name to match the scheme. Reviews of the law would happen every five years, not every three. Wording that only says "he" would be changed to suit everyone.
Company emissions reports
Part 3 of the bill changes a 2007 law on reporting pollution and energy. Under it, large companies report their pollution and energy use to the agency.
New detailed rules could make the agency publish more of this data. The agency could also take companies being closed down off its list. It could close gaps where a company signs up late.
New car efficiency deadlines
Part 4 changes the New Vehicle Efficiency Standard Act 2024. This law sets carbon dioxide targets for new cars, utes and vans. Suppliers earn or owe units depending on how they do.
The bill moves some deadlines. That gives suppliers the full two years the law meant them to have to make up a shortfall. For example, the final day to settle moves from the second 31 December to the third 1 April. Units also expire later.
The targets themselves do not change. Car industry groups backed the change.
Start date
Some parts start the day after the bill becomes law. Others start on a date the government sets. If no date is set, they start six months after the bill becomes law.
A bill becomes law when the Governor-General signs it. The Governor-General is the King's representative in Australia.
The bill was brought into the House of Representatives on 20 August 2026. That is the house of Parliament where the government sits. On 17 September 2026 it was sent to a second meeting room where MPs debate bills. Debate went on there that day. On 12 October 2026 it came back to the main House room. MPs debated it there on 13 and 14 October 2026.
The House still has to finish debating and vote on it. The Senate would then need to pass it before it becomes law.
Its journey through Parliament
| 20 Aug 2026 | House of Representatives: Introduced and read a first time |
| 20 Aug 2026 | House of Representatives: Second reading moved |
| 16 Sep 2026 | House of Representatives: Second reading debate |
| 17 Sep 2026 | House of Representatives: Referred to Federation Chamber |
| 17 Sep 2026 | House of Representatives: Second reading debate |
| 12 Oct 2026 | House of Representatives: Returned to House for further consideration |
| 13 Oct 2026 | House of Representatives: Second reading debate |
| 14 Oct 2026 | House of Representatives: Second reading debate |