National Carbon Offset Standard

The National Carbon Offset Standard provides guidance on what constitutes a genuine, additional voluntary offset in the context of the Carbon Pollution Reduction Scheme.  It sets minimum requirements for the verification and retirement of voluntary carbon credits and provides guidance for calculating the carbon footprint of an organisation or product for the purpose of achieving ‘carbon neutrality’. 

The National Carbon Offset Standard provides Australian businesses, particularly farmers, with the opportunity to develop offset credits for voluntary carbon markets.  These opportunities include offsets from increased soil carbon and from other land-based emissions sources.

The National Carbon Offset Standard also provides a voluntary standard for businesses to use in becoming carbon neutral or developing carbon neutral products.  A logo will be made available so that consumers can have confidence that organisations and products bearing the logo have achieved carbon neutrality in a way that complements the Carbon Pollution Reduction Scheme and achieves genuine emissions reductions.

The National Carbon Offset Standard applies to the voluntary carbon market, which is complementary to, but operates outside of, the Carbon Pollution Reduction Scheme.

National Carbon Offset Standard  (133 KB)

National Carbon Offset Standard (144 KB) 

What are ‘carbon offsets’?

Carbon offsets represent a reduction in greenhouse gases, or enhancement of greenhouse gas removal from the atmosphere by sinks such as soil carbon, relative to a business-as-usual baseline.  Carbon offsets are tradable and often used to offset all or part of another entity’s emissions.

For example, individuals may seek to offset their travel emissions for long-haul flights. Companies may appeal to consumers by committing to carbon neutrality – that is, by purchasing offsets to neutralise their carbon footprint and/or that of their products.

How does the National Carbon Offset Standard work?

The National Carbon Offset Standard provides a means of ensuring the integrity of offsets and carbon neutral products available for consumers and businesses alike.  The Standard assists consumers to make effective choices in regard to offsetting and interpreting carbon neutral claims.  It also provides guidance for businesses for determining their carbon footprint and for purchasing robust offsets.

Those organisations achieving carbon neutrality will purchase a range of eligible offset credits under the National Carbon Offset Standard, including:

  • Carbon pollution permits, including those from forestry projects opting into the Carbon Pollution Reduction Scheme
  • Kyoto units recognised and accepted under the Carbon Pollution Reduction Scheme
  • Credits issued under the internationally recognised Voluntary Carbon Standard and Gold Standard, where these meet specific requirements
  • Credits issued by domestic offset projects that reduce emissions from sources currently not counted towards Australia’s Kyoto Protocol target.

The National Carbon Offset Standard is a ‘living’ document that will be regularly reviewed and updated to reflect the dynamic nature of the voluntary carbon market and provide ongoing opportunities for Australian businesses. 

The list of eligible offsets and eligible emissions sources for domestic offsets is therefore likely to change over time in line with domestic and international carbon market developments and changes in international emissions accounting rules. 

For more information on the National Carbon Offset Standard see the Q&A for businesses and consumers.

Why do we need a National Carbon Offset Standard?

The Australian Competition and Consumer Commission (ACCC) has noted that as the voluntary carbon market has grown, concerns have emerged about what consumers and businesses are really purchasing when they buy carbon offsets. Varied levels of understanding about carbon offsets and carbon neutrality and varied assessment methodologies can create confusion as to the legitimacy of claims and products.

The Standard addresses consumer concerns that some of the offset products being sold in the voluntary carbon market are not genuine, that they have been illegitimately resold, or will not achieve the emissions reductions claimed.  It also clarifies for businesses and providers of offset and carbon neutral products what constitutes a credible carbon offset and carbon neutral claim within the context of the Carbon Pollution Reduction Scheme. 

Consultation

The Department of Climate Change will continue to consult with stakeholders in finalising administrative arrangements for the National Carbon Offset Standard.

The Department of Climate Change released a Draft National Carbon Offset Standard and related discussion paper for public consultation in December 2008.  The discussion paper sought stakeholder views on the breadth of offsets to be eligible under the standard, the meaning of carbon neutrality, principles and approaches for calculating the carbon footprints of organisations and products, and processes for generating offsets from domestic emissions sources. Stakeholder submissions closed in February 2009 and were taken into account in finalising the Standard.