Carbon credit projects fail to offset emissions: study

Tracey Ferrier |

Forest renewal projects that are largely failing still earn carbon credits, fresh research shows.
Forest renewal projects that are largely failing still earn carbon credits, fresh research shows.

Carbon credit projects that claim to fight climate change by regrowing Australia’s forests are largely failing, research has found.

Ten academics from three universities have published a paper that questions the integrity of Australia’s carbon credits.

They analysed 182 projects that use the controversial human-induced regeneration (HIR) method to generate carbon credits for the offset market.

HIR projects are supposed to capture and lock up carbon over time by regenerating native forests through land use changes.

It is not about planting trees. Typically it is about allowing for natural renewal and stopping activities like cattle grazing that might suppress regrowth.

But the paper, published in a prestigious international journal, found the projects are largely failing and forests are not regenerating as anticipated.

Dr Megan Evans from UNSW Canberra said there is an enormous price to pay when carbon credits don’t actually offset the emissions of the companies buying them.

“It makes climate change worse,” she said.

Dr Evans and other researchers are unsurprised by the findings, given the projects are mainly located in dry, outback areas in Queensland, NSW and Western Australia.

“Almost 80 per cent of the projects experienced negative or negligible change in tree cover over the study period,” said Australian National University professor Andrew Macintosh, who worked on the paper.

“The projects in the study received more than 27 million credits over the period of analysis and most of them claim regeneration started around 2010 to 2014.

“Their effects on woody vegetation cover should be very clear by now but the data suggest tree cover has barely increased at all and, in many cases, it has gone backwards.”

Overall, woody cover increased just 0.8 per cent, forest cover was up 3.6 per cent and sparse woody cover was down 2.8 per cent.

ANU professor Don Butler led the statistical analysis in the study and said vegetation changes largely mirrored what was happening in surrounding areas not generating carbon credits.

He said that suggests changes have more to do with external factors, like rainfall.

Human induced regeneration is a key part of Australia’s carbon credit scheme. New projects that use the method can no longer be registered but existing projects are still producing carbon credits for big emitters.

Climate Change Minister Chris Bowen has defended HIR projects in the wake of the research.

He pointed to an independent, peer-reviewed statistical analysis commissioned by the Emissions Reduction Assurance Committee that found HIR projects had resulted in a significant increase in vegetation.

The Clean Energy Regulator administers the government’s offset schemes and also said a series of reviews had confirmed the integrity of HIR.

“Every HIR project is subject to at least three independent audits, with an initial independent audit provided when a project first reports and applies to receive Australian carbon credit units.

“The CER only issues carbon credits where a project can demonstrate regenerating native forest.”

The independent Chubb review of Australia’s carbon credit scheme in 2023 did not support the view it was fundamentally flawed but made recommendations to boost transparency and integrity.

It found the HIR method was sound but said projects must face more transparent assessment to ensure carbon sequestration is verifiable, and that project areas will become permanent forest as a direct result of management.

The Carbon Market Institute said critiques must be based on appropriate data and recognise the extra assurance measures now in place.

The new research has been published in Communications Earth & Environment, a peer reviewed, open access scientific journal published by Nature Portfolio.

It is based a government dataset derived from satellite imagery that informs Australia’s national greenhouse accounts.