The carbon credit method that will bankroll the Great Koala National Park hands the New South Wales Government a direct financial reason to restrain private timber harvesting across the state, because the same government that collects the credits also regulates the private forests whose output could erode them. That is according to Carbon Eyes, an Australian carbon-market data and analytics platform, whose analysis posted overnight maps how the Improved Native Forest Management method leaves the state caught between its role as a credit recipient and its role as a forestry regulator.
Signed off by Assistant Minister for Climate Change and Energy Josh Wilson on 25 June, the INFM method lets a state government earn Australian Carbon Credit Units by permanently ending harvesting in its public native forests, with New South Wales set to register the koala park as its first project. Carbon leakage runs through the design, described in the analysis as the “increase in greenhouse gas emissions outside a project boundary” caused by the project itself.
Under the method, an independent assessor must calculate how much production leaks to other suppliers, weighing out-of-state timber, imports, plantations, non-wood substitutes, and out-of-state private native forestry, with the deduction to the state capped at 40 per cent of the credits it would otherwise claim. Any rise in private native forestry inside the same state falls outside that cap, caught instead by a separate charge the method calls the Private Native Forests Leakage Deduction.
“They are simultaneously the recipient of the ACCU revenue and the regulatory authority,” the firm wrote, with that dual position giving the state a standing reason to hold private harvesting down for the full 100-year life of the koala project. New South Wales approves and polices private native forestry under its own codes, and the analysis concludes the design “creates an incentive for PNF agreements in NSW to be managed conservatively” so benchmark rates are never exceeded.
Carbon Eyes builds independent ACCU project ratings from Clean Energy Regulator data and is a member of the Carbon Market Institute’s member register. Lionel Waker was recently interviewed by commodity agency Quantum Commodity Intelligence on the scheme’s rapid growth. Manly-based and holding no commercial stake in native forestry, the platform makes its money by reading the integrity of carbon credits rather than defending any single project.
Warnings of the same conflict surfaced last month, when an expert familiar with the method told Wood Central the state was “wearing two conflicting hats, forest regulator and carbon forest business operator,” with just 10 per cent of the state’s public forests still open to timber.
“Any increase in timber production elsewhere can become a threat to those credits,” warned Forest and Wood Communities Australia chair Steve Dobbyns, whose national body represents forestry businesses and timber communities. The penalty does not ban harvesting on neighbouring land, Dobbyns said, but it puts a carbon-credit price on any increase, reaching private growers, contractors, and sawmillers well beyond the park boundary.
A defence exists, with the method having cleared an 18-month review by the Emissions Reduction Assurance Committee, the independent body that judged it met the scheme’s legal integrity standards after 371 public submissions. Its proponent strengthened the leakage rules during that process, replacing an initial flat 5 per cent deduction with the project-level assessment of up to 40 per cent now in force.
It comes as the Albanese Government battles a Coalition disallowance motion that puts the method to a Senate vote on 18 August, the determination’s first test in the Parliament. NSW Nationals Senator Ross Cadell, who lodged the motion, has accused Labor and the Greens of treating the scheme as “a political football,” citing undisclosed documents and a lack of consultation.
Nationals leader Matt Canavan, who is driving the motion, warned the change would lock productive forests away for a century and weaken a sector he estimates at 80,000 direct jobs, with another 100,000 indirectly tied to it. Because the park would be funded by credits that Australia’s heaviest emitters buy to offset their own pollution, the vote forces the Greens to reconcile a harvesting halt they support with the polluter money that pays for it.
“Demand does not fall, it shifts to imports from countries with worse environmental standards,” said Shadow Minister for Energy and Emissions Reduction Dan Tehan, who warned any state could monetise a pre-existing forest closure under the scheme. Reduced native supply would pull in imports or push builders toward steel and concrete, he said, even as Australia stares down a projected 43 per cent softwood supply gap by 2050.
Independent modelling has put the stakes higher still, with work by Venn and colleagues finding a long-run leakage rate of 81.3 per cent for reduced native forest harvesting, meaning most of any cut in domestic supply returns as imports. Nearly 90 per cent of that displaced demand has been met by nations carrying elevated risks of illegal harvesting, a pattern the 40 per cent cap does not begin to capture.
Wood Central understands the park would draw ACCU revenue for only 15 years, even as the method locks in a 100-year permanence obligation that keeps the harvesting restrictions in place long after the credits stop. Supporters have put the revenue at $300 million over that window, while the North East NSW hardwood industry, which it displaces, turns over $1.84 billion in gross revenue annually and supports 5,700 full-time equivalent jobs.
The forests in question stretch across the Mid North Coast hinterland from Guy Fawkes River National Park to the state forests behind Coffs Harbour and Nambucca Heads, taking in the 176,000 hectares of public native forest earmarked for transfer into the park. Private native forests threaded through the same country are now exposed to the leakage penalty and to the incentive Carbon Eyes says it creates.
Cadell has called the fight one of transparency rather than industry against the environment, and his disallowance now puts a method worth a claimed $300 million to New South Wales before the Senate on 18 August.
