To encourage carbon abatement activities, the Australian Government provides incentives called Australian carbon credit units (ACCUs). Eligible Australian Carbon Credit Unit (ACCU) Scheme projects can earn ACCUs when they reduce or avoid emissions.
About ACCUs
ACCUs are a tradable financial product. They incentivise carbon abatement activities through projects ranging from reforestation to energy efficiency.
ACCUs are an additional income source for individuals and businesses running ACCU Scheme projects.
One ACCU represents one tonne of carbon dioxide equivalent (tCO2-e) that would have otherwise been released into the atmosphere.
ACCUs are held and managed through Australian National Registry of Emissions Units (ANREU) accounts.
The new Unit and Certificate Registry
We’re transitioning from the current ANREU system to the new Unit and Certificate Registry. The registry will progressively hold all units and certificates we administer. It will allow account holders to manage their units or certificates in one location. Learn more about the Unit and Certificate Registry.
Earning ACCUs
ACCUs are issued to individuals or businesses who run eligible projects under the ACCU Scheme. Participants can earn ACCUs for every tCO2-e their project avoids emitting or stores.
Activities are carried out as eligible offsets projects. You must meet eligibility criteria to register a project. There are also ongoing monitoring, reporting and auditing requirements.
ACCUs are issued as either Kyoto ACCUs or non-Kyoto ACCUs. You must have a certificate of entitlement before ACCUs can be issued to you.
Find out more about how to participate in the ACCU Scheme.
Buying and selling ACCUs
Participants can sell ACCUs on the secondary market or to the Australian Government. This gives a financial incentive for businesses and individuals to run ACCU Scheme projects.
Secondary market
ACCUs can be traded or sold on the carbon market. Private buyers, including safeguard facilities, purchase ACCUs to voluntarily offset their carbon footprint or meet emissions reduction obligations.
The value of ACCUs fluctuates based on supply and demand in the market. This pricing mechanism encourages cost-effective carbon abatement activities.
We are exploring how the new Unit and Certificate Registry could work with other existing (or future) digital platforms and support the exchange trading of ACCUs. Find out more about the Australian Carbon Exchange project.
Carbon abatement contracts
ACCU Scheme participants can also sell ACCUs from their project to the Australian Government through a carbon abatement contract. The Australian Government purchases ACCUs as part of its commitment to decarbonise Australia’s economy through carbon abatement projects.
Under a carbon abatement contract:
- participants agree to deliver ACCUs to the Australian Government
- the Australian Government agrees to buy their ACCUs at a fixed price.
Find out more about carbon abatement contracts.
ACCUs and the Safeguard Mechanism
Under the Safeguard Mechanism, Australia's highest emitting facilities must keep emissions below set baselines. They can do this by buying and surrendering ACCUs or Safeguard Mechanism credit units (SMCs). Safeguard facilities may also earn ACCUs by running their own projects.
Find out more about Safeguard Mechanism.
Sourcing ACCUs
To source ACCUs, you can:
- search the Carbon Market Institute’s Carbon Marketplace to find ACCUs for sale
- search the ACCU Scheme project register to find parties that may have ACCUs for sale
- establish an ACCU Scheme project to generate ACCUs.
Relinquishing ACCUs
Participants running ACCU Scheme projects may have to relinquish ACCUs if they were issued:
- based on false or misleading information
- for a sequestration offsets project that has had its registration revoked
- for a sequestration offsets project with a complete or partial reversal of sequestration.
A participant can also voluntarily relinquish ACCUs to:
- terminate a sequestration offsets project
- terminate a carbon maintenance obligation imposed in relation to a project area.
A court may order a person to relinquish ACCUs where issued in circumstances involving fraud.
The number of ACCUs that must be relinquished may be deducted from any ACCUs that are to be issued to the person. In these circumstances, the person will be deemed to have relinquished the relevant number of ACCUs.
Taxation and ownership of ACCUs
Important information
Detailed information about the tax treatment of ACCUs is available on the Australian Taxation Office’s website. You should obtain professional advice about the tax treatment of ACCUs as related to your specific situation.
Generally, the following apply to ACCUs:
- the cost of acquiring an ACCU is tax deductible, with the deduction effectively being deferred through the rolling balance method until the year in which the ACCU is sold or surrendered
- however, where an ACCU is issued to you in accordance with the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act), the availability (if any) of a deduction for the expenses you incur in undertaking activities under the CFI is generally determined under the normal income tax provisions rather than under the more specific provisions that apply to other ACCUs. The one exception is costs incurred in preparing and lodging an application for a certificate of entitlement or an offsets report. These are deductible under the specific provisions. The market value of this type of ACCU is included under the rolling balance account method. This has the effect of temporarily offsetting the economic benefit of the deductions until the ACCU is sold or surrendered.
- the proceeds of selling an ACCU are assessable income on revenue account in the income year the ACCU is sold.
- the change in value of the ACCU between the beginning and end of an income year must be included as assessable income (where the value increases) or is a deduction (where the value decreases) in the tax return for each financial year in which the ACCU is held (the value is taken to be nil at the start of the income year in which you first become the holder)
- supplies of Kyoto ACCUs and non-Kyoto ACCUs are GST-free.
- sellers of ACCUs are deemed to have received market value for an ACCU in certain circumstances (for example, transactions between related entities).
An ACCU is personal property. The registered holder of an ACCU is the person whose ANREU account has an entry for the ACCU. They are the legal owner and may, subject to the CFI Act and the Australian National Registry of Emissions Units Act 2011 (ANREU Act), pass good title to the ACCU to another person.
We may correct the register in certain circumstances, including to comply with a court order to rectify errors flowing from fraudulent conduct. If the ACCU is transferred to another person’s account before the defect is detected, that other person will still have good title to the ACCU provided they purchased the unit in good faith for value from the registered holder and without notice of the defect. A person who acquired the ACCU without purchasing it in good faith from the registered holder for value (for example, if they received it as a gift), or who was aware of the defect, will not have good title to the ACCU.
The CFI Act 2011 does not prevent the creation or enforcement of, or any dealings with, equitable interests in ACCUs. It may be possible for the holder of an ACCU to grant security over (for example, to mortgage) the ACCU or to hold the ACCU on behalf of others under a trust or other beneficial ownership arrangement. More detailed information on taking security over ACCUs is available on the Australian Government’s Personal Property Securities Register website.