Achieved and projected emissions reduction

In 2025, the Australian Carbon Credit Unit (ACCU) Scheme and the Renewable Energy Target (RET) are estimated to have reduced emissions by around 83.7 million tonnes of carbon dioxide equivalent (CO2-e). Looking at this another way, Australia’s 2025 emissions would have been almost one-fifth higher without the ACCU and RET schemes.

To put the 2025 estimate in context, it is similar to Australia’s total estimated emissions from road transport in the same year. 

The estimate is made up of:

  • 21.7 million tonnes of CO2-e from the ACCU Scheme
  • 36.9 million tonnes of CO2-e from the Large-scale Renewable Energy Target (LRET)
  • 25.2 million tonnes of CO2-e from the Small-scale Renewable Energy Scheme (SRES). 

These are conservative estimates for both the ACCU Scheme and the RET, as outlined below. 

This short chapter provides a high-level explanation of these results. Further information on our estimation approach is provided in the forthcoming Quarterly Carbon Markets Report (QCMR) Methods document. 

While carbon abatement is a core purpose of the Clean Energy Regulator (CER), not all the schemes we administer are included in these estimates. 

  • In the case of the Nature Repair Market, the scheme supports biodiversity rather than carbon abatement or displacement.
  • The Guarantee of Origin (GO) scheme launched in November 2025, so no Product or Renewable Electricity certificates were created in 2025.
    • We will include Renewable Electricity Guarantee of Origin abatement in 2026 emissions reduction estimates.
    • Product Guarantee of Origin (PGO) certificates represent the lifecycle emissions of eligible products, highlighting displacement opportunities rather than direct abatement or displacement compared to uncertified products for both producers and consumers. As such, emissions reductions are unlikely to be directly attributed to PGO certificates.
  • The Safeguard Mechanism is the Australian Government’s policy for reducing emissions at Australia’s largest industrial facilities and sets limits (baselines) on greenhouse gas emissions from those facilities. The CER reports on outcomes under the Safeguard Mechanism each year, showing that emissions covered by the reformed Safeguard Mechanism have reduced and the scheme is working as expected. Identifying and attributing this reduction directly to the scheme is more difficult than for the RET and ACCU schemes, so quantified emissions reductions have not been included. 

ACCU Scheme

The CER issued ACCUs equivalent to 21.7 million tonnes of CO2-e in 2025. This is 15.3% higher than the 18.8 million ACCUs issued in 2024, largely driven by sizeable issuance to vegetation projects throughout 2025. Each ACCU is equivalent to 1 tonne of CO2-e emissions reduction. Using ACCUs issued as a proxy for abatement from the ACCU Scheme is conservative because the scheme includes elements that mean actual abatement is higher than the number of ACCUs issued. In particular:

  • A 5% risk of reversal buffer discount is applied to the number of ACCUs issued to sequestration projects.
  • Permanence period discounts are applied to projects that sequester carbon. For projects with a 25-year permanence period, a 20% discount applies (25% for certain projects). 

Renewable Energy Target

The LRET is estimated to have contributed 36.9 million tonnes of CO2-e emissions reduction in 2025. This is a conservative estimate, as it uses a weighted average emissions intensity of electricity for the grid as a whole. 

  • The calculated emissions intensity is based on financial year emissions intensities published in the National Greenhouse Accounts Factors converted to calendar year and multiplied by the amount of renewable generation in megawatt hours (MWh).
  • The emissions intensity factor was estimated to be 0.63 tonnes of CO2-e per MWh in 2025. This is higher than the emissions factor of 0.56 used in our 2024 calculations. This change is due to an improvement in the data source used rather than an increase in the emissions intensity. This emissions intensity factor will fall as the share of renewables in the grid increases.

Emissions reduction from the LRET can also be calculated using the thermal displacement method. This estimate is higher than the estimate using grid average emissions intensity as it assumes renewables are fully displacing thermal generation. Thermal generation refers to electricity generated from fossil fuels, such as coal and gas. 

This approach is likely to systemically over-estimate abatement by discounting renewables displacing other renewable generation. The grid average method better recognises that 1 MWh of renewable energy does not displace 1 MWh of thermal generation. As a result, this estimate is preferred.

The SRES is estimated to have contributed 25.2 million tonnes of CO2-e emissions reduction in 2025. This captures the potential renewable electricity generated from rooftop solar as well as the reduction in electricity consumption from the use of more efficient hot water systems. 

For the first time, this estimate adjusts for some PV installations being replacements rather than new systems. Incorporating replacements into our estimates avoids over-estimating abatement from solar PV. Solar panels have a relatively long deeming period over which generation – and therefore abatement – is assumed to occur. Over that period, we estimate the that around 15% of installations are replacements rather than new systems, which is lower than replacement rates seen in more recent years. The estimate of abatement from the SRES does not include abatement from solar batteries; Box 4.1 provides further discussion.

Measuring abatement from batteries under the SRES

The abatement from small-scale batteries is currently not directly estimated, this is complex because of the source and timing of battery charging and discharging and lack of data available to the CER. However, batteries along with other uncaptured renewables, such as below baseline generation, are captured implicitly in the reducing emissions intensity of the grid.

Small-scale technology certificates (STCs) for small-scale batteries are calculated based on the usable capacity of the battery and are not designed as a proxy for abatement. The amount of STCs created is equal to an approximate 30% discount on the upfront installation cost in 2025.

The most direct way small-scale batteries can contribute to abatement is by shifting excess solar generation to displace thermal generation, usually at night. For example, a battery could be charged behind-the-meter using rooftop solar and discharged to the grid at night.

Alternatively, the battery could discharge to the household, displacing grid electricity use and directly avoiding emissions from thermal generation at night. This would mean less excess solar during the day and can also reduce curtailment of grid solar or wind during the day.

Projected 2026 emissions reduction

In 2026, the ACCU Scheme and the RET are estimated to reduce emissions by between 84 and 92 million tonnes of CO2-e.

  • The 84 million tonnes of CO2-e is based on using the lower range estimated for the ACCU Scheme and the RET (of 22 million and 62 million tonnes of CO2-e respectively) and the average emissions intensity factor of the grid.
  • The 92 million tonnes of CO2-e is based on using higher range estimates for the ACCU Scheme and the RET (of 26 million and 66 million tonnes of CO2-e respectively) and the average emissions intensity factor of the grid.

These estimates do not include projected abatement from the Renewable Electricity Guarantee of Origin Scheme, as projections of participation are highly uncertain at this early stage of implementation. 

Figure 4.1

Description

This figure shows the estimated emissions reduction from the 3 schemes administered by the CER in tonnes of carbon dioxide equivalence (t CO2-e) over time.

This figure is interactive. Hover over/tap each line to see the estimated emissions reduction. Hover over/tap along the line to see the thermal displacement estimate. Click/tap on the items in the legend to hide/show data in the figure. 

Small print

Emissions intensities for each year is sourced from the Australian National Greenhouse Accounts Factors. Estimated generation used to calculate SRES carbon content is based on the installation year, with an adjustment for solar panels that have been replaced. The ACCU Scheme estimate is based on ACCUs issued in each calendar year. This may include abatement that has occurred in prior years due to the lagged nature of the claiming process.

Annual values may change over time due to updated generation, scheme information and revisions to the methodology. The 2026 estimates have been rounded to the nearest million.

QCMR Q4 2025 figure 4.1 (578 bytes CSV)