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The Northern Territory government has opened the door for oil and gas companies to buy international carbon credits to meet their emission reduction targets, according to its new offsets policy.
Key points:
- Under the policy, oil and gas companies will be able to purchase international carbon offsets in the future
- The federal government has so far excluded the use of international offsets from its policies
- The NT government says it’s delivering on reforms to “protect our natural environment”
The Greenhouse Gas Emissions Offsets Policy outlines plans that would enable big carbon emitters to use Commonwealth-approved international offsets as a way to keep producing emissions.
The federal government has so far excluded the use of international offsets from its climate policies, and any company’s use of international offsets would still need Commonwealth approvals.
In a speech delivered to the Australian Financial Review Energy and Climate Summit on Monday, federal Energy and Climate Change Minister Chris Bowen said:
“Even strong advocates of the use of international credits recognise that we are several years off being able to assert that these requirements can be met.”
Commonwealth yet to approve international framework plan
The Northern Territory’s policy says alternative emissions offset units “can include those governed by an Australian framework or an international framework”.
“They can be used as emissions offsets under the NT Offset Framework only if they are listed as eligible offset units under Commonwealth Climate Active Carbon Neutral Standards (the Climate Active Standards),” the policy says.
It also says “decision-makers” will not be obliged to limit the amount of greenhouse gases a project is allowed to send into the atmosphere.
In a statement, Environment Minister Lauren Moss said the government was “delivering a number of reforms to protect our natural environment, while ensuring that we also support sustainable development, economic growth and jobs”.
“This is complex work reflecting public consultation across a diverse range of stakeholders, and commitments made as a result of other reviews, including the Pepper inquiry into Hydraulic Fracturing,” she said.
Ms Moss also said the emissions offset policy was “an instrument of last resort, in a comprehensive all-of-government response to achieving net zero emissions by 2050”.
The policy could influence gas projects in the Beetaloo Basin, about 500 kilometres south-east of Darwin, which has become a sticking point for the NT government as it attempts to fast-track production.
While proponents of fracking say the basin’s gas reserves could power Australia for 200 years, others have warned there might not be enough carbon credits in Australia to offset all of the emissions.
‘Literally the Wild West’
International carbon credits have been riddled with integrity and transparency concerns.
Mr Bowen has previously indicated the use of international carbon credits would only be permitted under strict conditions.
“[It would only be allowed] if the government was 100 per cent guaranteed and satisfied in the integrity of those emissions reductions,” he said in August.
Polly Hemming, senior researcher at the Australia Institute’s climate and energy program, said the NT government’s decision to allow room for international carbon credits in its emissions offsets policy was an act of “desperation”.
Ms Hemming said international offsets were “unregulated”, and relied upon “self-proclaimed verification and voluntary frameworks”.
“It’s literally the Wild West when you’re talking about international offsets,” Ms Hemming said.
“I think Territorians should be enormously worried about whether their government actually has their best interests at heart.
“Australia is on fire quite a lot and Australia floods quite a lot — increasingly because of climate change — so it’s really dangerous to rely on the assumption that any kind of offsetting activity… will be permanent.”
Concerns about legitimacy of international offsets
Professor Andrew Macintosh, who used to help oversee the integrity of Australia’s carbon credit scheme, said the integrity of all carbon credits — including Australian ones — was an ongoing concern.
“This idea that everybody can simply just offset their emissions is nonsense,” he said.
Most analyses of carbon credit schemes around the world showed about 60 to 80 per cent of the credits issued did not appear to represent real and additional abatement, he said.
Professor Macintosh also said international offsets were typically cheaper than Australian ones, which helped explain why high-polluting companies were pushing to use them in Australia.
“The obvious reason is because they’re looking for cheap credit,” he said.
“If the credits had legitimacy, I’d be fully supportive and would be 100 per cent behind them. But at the moment, they don’t.”
In a statement, a spokesperson for the Australian Petroleum Production and Exploration Association, said the oil and gas industry “has already announced billions of dollars in spending on technology such as carbon capture and storage (CCS)”.
“With a commitment to net zero greenhouse gas emissions across the economy by 2050, APPEA supports a portfolio approach to emissions reductions which allows them to be sourced in a variety of ways,” the spokesperson said.
“This includes direct emissions reductions at facilities, the application of new technologies and the use of credible domestic permits, including the safeguard mechanism credits that the Federal Government is consulting with industry about right now, and international permits.”
Environment Centre NT’s Kirsty Howey said the NT government’s decision to “open the door” to international offsets was “an extremely troubling capitulation to the oil and gas industry”.
“No amount of accounting … is going to avoid the fact that fracking the Beetaloo Basin is hurtling us towards catastrophic climate change,” she said.
Earlier this year, 10 new offshore areas across Australia were approved by the federal government for oil and gas exploration, as were permits for two new offshore greenhouse gas storage facilities.
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