Offsetting emissions through carbon credits like Australian Carbon Credit Units (ACCUs) would be an important part of achieving carbon neutrality for many businesses.
New report from the Commonwealth Bank, Climate Active – a 101, which is part of CBA’s Sustainable Economics Research series, has predicted that the increasing number of Australian businesses adopting net-zero carbon emission targets and seeking Climate Active certification will drive usage of ACCUs.
Climate Active is a partnership between the Australian government and Australian businesses to encourage voluntary climate action. Certification is awarded to Australian entities or products that have credibly reached net zero emissions by changing production methods, using new technology, and purchasing carbon credits like ACCUs.
“While climate reporting is not yet mandatory in Australia, we expect the quantity and quality of disclosures will improve over time,” said Kristina Clifton, report author and CBA senior economist. “As more businesses seek to make net zero commitments and action them, we expect the number of Climate Active certifications will increase significantly as they enable consumers and investors to identify entities or goods and services that are carbon neutral. In practice, many entities are unable to reduce their emissions entirely through new technologies or changing operations, so purchasing carbon credits like ACCUs is an important part of becoming carbon neutral. Climate Active certification will soon require at least 20% of offset credits purchased to be ACCUs and we expect this rule change will further increase the demand for ACCUs already being driven by Climate Active certification.”
To achieve and maintain certification, businesses would need to take these five steps each year:
- Measure: Calculate business emissions for a base year by applying emissions factors to each business activity
- Reduce: Change production methods or utilise new technology to reduce identified emissions
- Offset: Offset remaining emissions by purchasing carbon offset units
- Validate: Engage with an independent third party to have the business’s carbon neutral claim confirmed
- Report: Publish a public disclosure statement via the Climate Active website following certification
Climate Active certification replaces the Australian government’s previous National Carbon Offset Standard. There are currently 382 entities operating in Australia with Climate Active certification.
