ACCU integrity body demands immediate fix to soil carbon method over over-crediting risk
A government-backed watchdog warns Australia's flagship soil carbon method may be issuing credits for CO2 that was never actually stored.
Australia's carbon credit method for soil sequestration needs "immediate" changes to stop over-crediting, the official integrity body for the country's emissions reduction scheme has concluded in a formal review. The watchdog found that the current approach allows project developers to claim credits for carbon storage that may not be additional to what would have happened anyway.4
The soil carbon method anchors the Australian Carbon Credit Unit (ACCU) scheme's supply growth. Regulators and the Clean Energy Regulator have been counting on soil projects to scale up offset volumes for the domestic Safeguard Mechanism, which requires large emitters to buy ACCUs or pay a penalty. If the method systematically over-credits, the entire compliance market's integrity is at risk.3
Integrity body experts said the current methodology lacks a credible baseline against which to measure genuine sequestration gains. Without a counterfactual that accounts for existing management practices, many soil carbon projects may be registering credits for outcomes that farmers would have achieved regardless of the carbon payment — a concern flagged in analyses of inset and offset credit structures as far back as November 2022 (2022-11-08), according to Farmers Weekly, and one that has grown more urgent as issuance volumes have climbed.4
The review echoes a pattern seen across voluntary carbon markets globally. A study published in June 2026 (2026-06-10) on a billion-tree carbon project in Senegal found that much of the claimed carbon storage "never existed," with restoration efforts expanding into unsuitable mangrove sites purely to meet planting targets, researchers told the Times of India.5
Australia's soil carbon problem shares features with that case. Pressure to generate credits at scale has pushed projects into marginal practices where the climate benefit is far below the credited amount. The ACCU integrity body now wants the regulator to tighten eligibility rules, require more rigorous baseline setting, and impose buffer provisions against reversal risk before the method can issue new credits.3
Voluntary carbon markets broadly have struggled to enforce systemic rigour. A CounterPunch analysis from June 2026 (2026-06-03) found that current reforms and standards have not fundamentally addressed the oversight failures that allow low-quality credits to circulate alongside genuine emissions reductions.3 A Guardian investigation published in May 2024 (2024-05-28) found that 32 of the 36 Verra projects it analysed were classified as likely junk, with the remaining four described as problematic — the underlying methodology critiques remain unresolved.6
The immediate market implication is a cap on future ACCU supply. If the integrity body's recommendations are adopted, fewer soil carbon projects will qualify under the new standard, tightening the pool of credits available for Safeguard entities. That could push prices higher in the short term, but at the cost of regulatory uncertainty that deters new project development.1
Legal liability adds pressure to the sector. A co-founder of a California-based carbon offsets developer was sentenced to 14 years in a US prison this year for a fraud scheme involving $248 million, Carbon Pulse reported on June 2, 2026 (2026-06-02).2 Developers in Australia now face the prospect that credits issued under the current method could later be challenged as invalid, leaving compliance buyers exposed.
Scientists and analysts who reviewed the ACCU soil method noted that reversal risk — where sequestered carbon is released back into the atmosphere through drought or land-use change — has been inadequately addressed. The current method does not require a permanent monitoring period or insurance mechanism, leaving long-term storage unverified after the crediting period ends.4
New Zealand, which signalled a "light-touch" approach to voluntary carbon market regulation in late May 2026 (2026-05-28), faces a similar credibility trade-off. The government's support for markets without direct regulation may unlock finance but risks the same integrity gap now exposed in Australia, analysts said.1
For ACCU traders and Safeguard compliance buyers, the next signal is the Clean Energy Regulator's formal response to the integrity body review. Quick adoption of tighter rules would trigger a near-term supply contraction; a prolonged consultation would extend the uncertainty already chilling project financing.2