Australia’s newest carbon crediting method could issue up to twice the credits its climate benefit justifies, according to the country’s peak forestry science body, and the first project in line to use it is the flagship Great Koala National Park. Forestry Australia’s analysis of the Improved Native Forest Management (INFM) Method, which credits ending native forest harvesting on public land, concludes the prescribed accounting could overstate abatement by 40 to 100 percent, before carbon leakage and harvested wood products are even counted. For buyers of Australian Carbon Credit Units (ACCUs), this is a supply-integrity story with a hard deadline: a Senate disallowance motion that could void the method is set for debate when parliament returns in August.
What Forestry Australia Found
The critique, published in a briefing note on July 30, is unusually specific for an integrity dispute. It identifies structural faults in the method’s accounting, each with a quantified effect.
The first is the crediting window. The INFM Method measures benefit over 15 years, far shorter than the 100 years used by the Plantation Forestry Method, which excludes most of the regrowth a harvested forest accumulates over the following decades. That makes the baseline forest look smaller in carbon terms than it really would be. Forestry Australia’s testing shows that correcting the window alone could cut the estimated benefit by more than 40 percent.
The second is the timing of issuance. Credits are generated upfront, on the gap between the project forest and the baseline immediately after a hypothetical harvest, then partly clawed back in later reporting as the baseline regrows. Keeping the benefit on the books depends on continually adding new no-harvest areas, and any over-credit still standing at year 15 is never reconciled. Forestry Australia says it knows of no other method in the world structured this way.
The third is the model itself. The method runs FullCAM, the Australian government’s own forest carbon accounting tool, on clearfall assumptions, even though more than 80 percent of native forest harvesting is selective or partial. Those settings do not match Australia’s National Greenhouse Gas Inventory, and fixing the model could cut the estimated benefit by more than 50 percent depending on forest type and harvesting system.
The Political Load the Method Is Carrying
The method is not an obscure technical instrument. New South Wales plans to register the Great Koala National Park as its first project, and the state government has promoted 22 million credits over 15 years from ending harvesting in its public native forests. Forestry Australia’s worked example suggests up to 11 million of those ACCUs could have no real carbon behind them. Karen Hussey, chair of the committee that oversees ACCU method integrity, has told senators the park’s creation depends on the INFM Method’s approval in parliament.
That linkage is exactly what alarms critics. Dr Michelle Freeman, President of Forestry Australia, said the body supports credible investment in forest carbon and accepts that avoided harvesting can deliver genuine gains in some cases, but that every ACCU issued must represent a real, additional and accurately measured tonne. The Australian Forest Products Association, whose Acting CEO Richard Hyett said the industry had raised concerns for more than 18 months, argues the method fails the ACCU scheme’s own requirements for integrity, transparency and additionality, and that registering it “prioritized politics over science.”
Two further design choices compound the problem. Leakage, the harvesting that shifts elsewhere when one forest closes, is capped at a 40 percent deduction even where independent assessment finds a higher rate, while international timber leakage from avoided harvesting has been reported at up to 95 percent. And additionality rests on self-declaration: a state can generate and sell ACCUs while counting the same reductions toward its own targets, a double-counting path that private landholders are explicitly barred from.
An Unusually Broad Opposition
The coalition against the method now spans groups that rarely align. The Timber and Forestry Trade Union has rejected it as “dead on arrival,” with National Secretary Michael O’Connor arguing it mistakes passive lock-up for credible carbon policy. Dr John Raison, the former CSIRO chief research scientist who helped build FullCAM, warned Climate Change and Energy Minister Chris Bowen in an open letter this month that “it is not possible to create reliable carbon credits” under the method’s settings. Forestry Australia’s testing now puts a number on the modelling fault Raison identified.
Process complaints add to the substance. Forestry Australia says it spent more than 12 months requesting the FullCAM files needed to reproduce the claimed results, without receiving them, and that material changes were made to the method after public consultation closed, without further independent testing.
What Buyers and Investors Should Watch
The immediate watch item is the Senate. Nationals Senator Ross Cadell has lodged a disallowance motion set down for debate when parliament returns in August, and with Labor defending its own instrument, the deciding votes are expected to rest with the Greens. A successful disallowance would void the determination entirely.
For compliance buyers under the Safeguard Mechanism and voluntary buyers holding ACCUs, the risk is more nuanced than a binary vote. If the method survives, INFM-issued units will enter the market carrying a public, quantified over-crediting claim from the national forestry science body, the forest products industry and the tool’s own co-developer. That is the kind of provenance that diligence teams, and eventually auditors and courts, can cite. If it falls, the Great Koala National Park loses its stated funding mechanism and NSW needs a new plan, which would reset expectations for a sizeable tranche of anticipated ACCU supply.
Either way, the episode reinforces a pattern buyers already know from other markets: government-sponsored methods tied to a specific policy outcome deserve more scrutiny, not less, precisely because the political pressure to register them is highest.
