Carbon Credits and ACCUs: What Australian Businesses Need to Know in 2026

EnergyAustralia sold its "Go Neutral" product to over 400,000 customers for nearly a decade. The pitch was simple — pay a bit extra, we'll buy offsets, and your energy is carbon neutral. Then in May 2025, the company publicly admitted that "offsets do not prevent or undo the harms caused by burning fossil fuels." They apologised. They pulled the product. And Climate Active, the government scheme that certified it, is now being reviewed with the term "carbon neutral" likely to be scrapped entirely.

That should tell you something about where carbon credits sit in Australia right now.

We're not anti-offset. But we've spent enough time building carbon accounting systems to know that offsets become dangerous the moment they're used to paper over emissions you haven't properly measured. ACCU carbon credits in Australia in 2026 are a real compliance tool with a real market behind them. They're also a minefield for anyone who doesn't understand what they're actually buying. So let's break this down.

What an ACCU Actually Is

An Australian Carbon Credit Unit represents one tonne of CO2-equivalent either stored or avoided through an approved project. The Clean Energy Regulator issues them. Each one gets tracked in the Australian National Registry of Emissions Units (ANREU) — so unlike some international carbon credits, there's a proper paper trail.

Projects that generate ACCUs have to follow one of the CER's approved methods. There are currently about 13 active methods across five categories: agriculture (soil carbon, animal effluent), energy efficiency (industrial equipment, commercial appliances), landfill and waste (methane capture, organic waste processing), vegetation (plantation forestry, savanna fire management, blue carbon), and carbon capture and storage.

The old human-induced regeneration (HIR) method — which generated the overwhelming majority of ACCUs for years — was closed at the end of 2023 after the Chubb Review raised questions about its integrity. Existing HIR projects still receive credits, but new registrations have shifted towards soil carbon and environmental plantings. In Q3 2024 alone, the CER registered 95 new agriculture projects (almost all soil carbon) and 77 vegetation projects. That shift matters because it changes the character of supply in the market.

One thing that doesn't get said enough: ACCUs aren't all the same quality. A credit from an industrial fugitive emissions project — where you can physically measure the methane that didn't enter the atmosphere — is a very different animal from a soil carbon credit, where measurement uncertainty is higher and permanence is harder to guarantee. The CER requires permanence obligations for vegetation-based projects, but the practical enforcement of that over 25-year crediting periods is... let's just say it's an open question.

The Price and What Drives It

ACCU spot prices closed at $36.85 as of mid-February 2026. That's within the $30–$37 range they've sat in for most of 2024 and 2025, after the speculative spike to $45–$55 in 2022 when the Safeguard Mechanism reforms were announced.

EY's Australian Carbon Market Outlook (January 2026) projects prices staying flat at $30–$35 through to 2028, rising to around $70 by 2035. The Cost Containment Measure — the government's price ceiling — is set at $82.68 per ACCU for 2025–26, indexed to CPI plus 2% annually. So there's a big gap between the spot market and the ceiling right now.

What does that mean for a CFO? At current prices, offsetting 10,000 tonnes of emissions costs roughly $370,000. That's not nothing. But it's cheap enough that some companies will be tempted to just buy credits instead of actually reducing emissions. EY's analysis explicitly warns that current prices are "unlikely to drive the medium and higher cost abatement needed for meaningful emissions reduction." In other words, the market is underpricing the work we actually need to do.

For a mid-market Australian company — say, a construction firm or a property portfolio — $370,000 for 10,000 tonnes sounds manageable until you realise that money buys you precisely zero operational improvement. You've just rented someone else's abatement for a year.

Compliance Use: The Safeguard Mechanism

This is where ACCUs stop being voluntary and start being mandatory. Under the reformed Safeguard Mechanism, any facility emitting more than 100,000 tonnes CO2-e per year faces declining baselines. The default decline rate is 4.9% per year until 2030. If you exceed your baseline, you must surrender one ACCU or Safeguard Mechanism Credit (SMC) for every tonne of excess.

The numbers from the first compliance year (2023–24) are striking. Of 215 covered facilities, 153 exceeded their baselines. After flexibility measures, 144 facilities needed to surrender credits covering approximately 9.2 million tonnes. On the supply side, 57 facilities that came in under baseline were issued over 8 million SMCs. Total ACCU issuances for 2024 reached 18.8 million units.

Safeguard entities now hold roughly 60% of all ACCUs in the registry — around 50 million units at the end of 2024. That concentration is worth watching. If demand spikes — say, because baselines keep declining while actual abatement stalls — the price could move sharply.

Here's the mechanical detail that matters for NGER reporters: ACCUs surrendered under the Safeguard Mechanism don't reduce your reported emissions. Your NGER return still shows your actual emissions. The credits are a compliance mechanism sitting alongside your reporting, not a substitute for it. The CER sees your real numbers either way.

And if your facility uses ACCUs to meet more than 30% of its baseline obligation, you're required to disclose why you haven't achieved more onsite abatement. That disclosure requirement is the CER's way of saying: we know offsets are easier, but we want to see you trying.

Voluntary Use and the Greenwashing Trap

Outside the Safeguard Mechanism, companies buy ACCUs voluntarily — for Climate Active certification, corporate net-zero commitments, customer-facing carbon neutral claims, or supply chain requirements. About 1.3–1.5 million ACCUs per year are cancelled for non-Safeguard purposes. That's a small fraction of total issuances.

But voluntary use is where the legal risk lives.

The ACCC has made greenwashing an enforcement priority for 2025–26 and into 2026. They've racked up over $42 million in penalties across major cases since mid-2024 — Vanguard ($12.9M), Mercer Super ($11.3M), Active Super ($10.5M), Clorox ($8.25M). Maximum penalty under Australian Consumer Law is $50 million per contravention.

None of those cases were about carbon credits specifically. But the EnergyAustralia settlement — the first Australian case directly targeting "carbon neutral" claims backed by offsets — has changed the playing field. When a major energy retailer admits publicly that offsets don't undo the harm of burning fossil fuels, every other company making similar claims needs to pay attention.

The ACCC's eight principles for environmental claims are blunt: claims must be accurate, backed by evidence, clear in their conditions, and not misleading through omission. Saying your product is "carbon neutral" because you bought offsets — without disclosing what kind of offsets, from what projects, with what permanence guarantees — is exactly the kind of claim that's now being challenged. The new AANA Environmental Claims Code (commenced March 2025) makes this even sharper: vague claims like "sustainable" or "green" now require a very high standard of proof.

Our view? If you're going to use ACCUs voluntarily, be specific about what you bought and what it does. "We purchased 500 ACCUs from a savanna fire management project in the Northern Territory" is defensible. "We're carbon neutral" is a greenwashing lawsuit waiting to happen.

Offsets vs Reduction: Where We Stand

There's a popular argument that offsets are a "distraction from real action." And there's a counter-argument that they fund genuine abatement projects and are a pragmatic transition tool. We think both are partly right, but the debate misses the actual problem most companies face.

You can't meaningfully use offsets — whether for compliance or voluntary purposes — until you know what your emissions actually are. That sounds obvious. It isn't, though, because we've talked to dozens of companies that were buying carbon credits before they'd even finished calculating their Scope 1 and 2 baseline. One property manager we spoke to was purchasing ACCUs to offset their "estimated" portfolio emissions, where "estimated" meant a rough back-of-envelope number from two years prior that didn't include half their sites.

That's not an offset strategy. That's guesswork with a receipt attached.

Measurement comes first. Full stop. If your carbon accounting is still based on annual spreadsheets with manually transcribed utility bills, your emissions number could be off by 10–20%. Offsetting 10,000 tonnes when your actual emissions are 12,000 tonnes means you're neither carbon neutral nor compliant. You're just wrong, expensively.

The legitimate use case for ACCUs looks like this: you've measured your emissions accurately (with proper emission factors, auditable data, and a system that can survive an NGER audit). You've identified and implemented the abatement measures that make economic sense — LED lighting, electrification, renewable PPAs, operational efficiency. And then, for the residual emissions you genuinely can't abate yet, you purchase high-quality credits as a bridging measure while you work on the harder stuff.

That's honest. That's defensible under ACCC scrutiny. And it requires that the measurement comes first.

What to Actually Do

We're not going to pretend the ACCU market is simple. It isn't. We're also not sure where prices will be in 18 months — the EY forecast of $30–$35 through 2028 assumes no major policy shifts, and Australia's 2035 target of 62–70% below 2005 levels will almost certainly force tighter baselines and higher demand.

But here's what we'd tell any CFO or sustainability manager considering carbon credits right now:

Get your emissions baseline right before you spend a dollar on offsets. If you're an NGER reporter, your numbers are already subject to CER scrutiny — and the Safeguard Mechanism penalties are $330 per tonne above baseline plus $33,000 per day. If you're approaching ASRS Group 2 reporting, your Scope 1 and 2 numbers carry director liability from day one. In either case, the accuracy of your underlying data matters more than the credits you buy on top of it.

If you do buy ACCUs, favour projects with measurable, verifiable abatement — industrial emissions reduction, landfill gas capture, well-managed savanna burning — over projects where the carbon accounting relies heavily on modelling and assumptions. Ask your broker what method generated the credit. If they can't tell you, find a different broker.

And whatever you do, don't call yourself carbon neutral unless you're ready to defend every word of that claim in front of the ACCC.

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