Australia’s carbon offset system under fire as critics warn it’s a ‘house of cards’

The internal Greens conflict that saw senators cross the floor last week over koala protection in a national park has drawn renewed attention to a deeper problem: Australia’s over-reliance on carbon offsets. According to a Guardian opinion piece by Adam Morton, the country’s climate action framework depends heavily on Australian Carbon Credit Units (ACCUs), which are meant to represent one tonne of greenhouse gas emissions avoided or removed. However, Morton argues that treating these credits as a like-for-like swap for emissions is fundamentally flawed—carbon stored in nature is not equivalent to the burning of millennia-old fossil fuels.

The vast majority of ACCUs are generated from government-sanctioned projects that aim to regenerate forests or capture and burn methane from landfill sites. While these projects are designed to reduce atmospheric greenhouse gases, Morton contends that the system's integrity is questionable. As more reliance is placed on offsets, he warns, the more they resemble a ‘house of cards’ that could collapse under scrutiny.

The Guardian article, published on September 18, 2026, suggests that the koala park dispute—which involved Greens senators crossing the floor—has inadvertently highlighted this broader issue. Morton calls the subject ‘mind-deadening’ but insists it matters, given how central offsets are to Australia’s climate commitments and the climate strategies of its major polluters.

Analysis

Why This Matters

Australia’s climate targets and corporate net-zero claims may be undermined if offset credits do not represent genuine, additional emissions reductions.
The debate could influence government policy on the ACCU scheme and international credibility of Australia’s climate action.
A collapse in confidence could force companies to cut actual emissions rather than purchase cheap offsets, with major economic implications.

Background

Carbon offset schemes allow polluters to compensate for their emissions by funding projects that remove or avoid greenhouse gases elsewhere. Australia’s system, the ACCU scheme, has been in place for over a decade, generating credits from projects such as reforestation and landfill gas capture. However, critics have long questioned whether some projects would have happened anyway, a concept known as ‘additionality’, and whether the carbon stored in trees or soils is truly permanent. The current system is integral to Australia’s pledge to reach net-zero emissions by 2050, but its credibility hinges on the integrity of these credits.

Key Perspectives

Proponents of ACCUs: The scheme provides a market-based incentive for landholders and businesses to reduce emissions, and the government maintains that rigorous safeguards ensure the scheme delivers real, measurable reductions.

Environmental critics, including Adam Morton: They argue that offsetting creates a moral hazard, allowing big polluters to continue emitting while avoiding structural changes. They point to the fundamental mismatch between short-lived natural carbon storage and the long-lived impact of fossil fuel combustion.

Greens party dissidents: The recent cross-floor vote over koala protection may reflect deeper unease within the party about compromising environmental integrity for political deals, which could signal broader political pressure to reform climate policy.

What to Watch

Any official review or independent assessment of the ACCU scheme’s integrity in response to growing criticism.
Corporate reactions—whether major Australian polluters will shift away from offsets toward direct emissions reductions.
Political fallout within the Greens and other parties over support for offset-based climate policies.
Future regulatory changes that could tighten the rules for generating ACCUs or require greater transparency in their use.

Analysis

Why This Matters

Background

Key Perspectives

What to Watch

Sources