Claims that ending timber harvesting in New South Wales public native forests could generate around A$1.5 billion in carbon credit revenue have become a central part of the case advanced for the new Improved Native Forest Management in Multiple-use Public Native Forests method, or INFM, which survived a Senate disallowance motion on Thursday. Those claims deserve strong scrutiny.
The figure originates from economic modelling prepared by Mandala Partners for the Australian Climate and Biodiversity Foundation in February 2025. The publicly available summary estimates that ending harvesting across NSW public native forests could generate around 1.5 million Australian Carbon Credit Units each year, with a central estimate of $1.5 billion in gross revenue over a 15-year crediting period, on a price rising to $67 an ACCU by 2030.
The underlying Mandala report has not been publicly released, so its assumptions and calculations cannot be independently examined. The analysis was also undertaken well before the final statutory method was registered on 26 June 2026. The real question is not whether the method generates ACCUs, but whether the credits it calculates represent an equivalent amount of real net climate abatement, and so whether the revenue being promoted should be granted.
Carbon accounting should not stop at the forest boundary
Assessing the climate consequences of changes in native forest management requires consideration of the entire forest and wood products system. A proper life-cycle assessment has to take in changes in forest carbon stocks, carbon stored in wood products in service and in landfill, emissions from harvesting, transport, and processing, the use of residues for energy, the substitution of timber for more emissions-intensive materials such as steel, aluminium, and concrete, and the consequences of replacing Australian timber production with imported products.
Research by Ximenes and colleagues in 2016 and a 2024 review in Australian Forestry demonstrate why these factors matter and that, when they are accurately accounted for, sustainable harvesting of native forests does not result in net carbon emissions. The INFM is incomplete. It does not account for the benefits of substituting wood for emissions-intensive materials, nor does it accurately model other important factors that affect the carbon balance of harvested forests.
Forestry Australia has identified potentially very large over-crediting
Forestry Australia, the professional body representing Australian forest scientists and foresters, has undertaken detailed technical analysis of the final method. Its forest carbon experts concluded that the INFM could over-credit projects by 40 to 100 per cent, even before the full effects of leakage and carbon stored in harvested wood products are taken into account.
Its concerns include the treatment of forest carbon dynamics following selective harvesting, the application of FullCAM modelling, and the accounting timeframes the method uses. A carbon method that generates hundreds of millions of dollars of tradeable offsets must demonstrate that each tonne credited represents genuine and conservatively estimated abatement. A systematic modelling bias of that magnitude should not be dismissed.
Leakage may be much larger than the method allows
Ceasing native forest harvesting does not stop demand for hardwood. Recent research by Tyron Venn and colleagues estimates that 81.3 per cent of the reduction in Australian native forest hardwood production has historically been replaced by imports, and that about 90 per cent of that displaced demand was supplied from countries with elevated risks of illegal harvesting. Imported wood carries risks of very high production emissions from unsustainable practices, including the disturbance of organic peat soils, and higher emissions from transport than local sources.
The INFM acknowledges the leakage problem and requires an independent assessment of indirect leakage, including emissions increases outside Australia. It requires that deduction to fall between zero and 40 per cent of the residual abatement calculated after other leakage deductions. That creates an obvious integrity question: if empirical evidence indicates that most reductions in Australian hardwood production are replaced by imports, why is the carbon consequence of indirect leakage constrained by an arbitrary ceiling? There is also an unrealistic assumption that an independent assessor can reliably estimate emissions caused by wood imports when their precise source location is unknown.
A reality check on the claimed scale of abatement
The scale of the Mandala estimate can be checked against NSW timber production. ABARES reported 650,000 cubic metres of native forest logs harvested from NSW public and private forests in 2022-23. Each cubic metre of wood is approximately equal to one tonne of carbon dioxide equivalent, and on average 70 per cent of felled biomass is recovered as logs, which puts the total carbon in the felled biomass behind that year’s production at approximately 0.93 million tonnes.
That 0.93 million tonnes is not necessarily an absolute upper limit on INFM credits, because the method also credits modelled differences in forest carbon stocks over time between its baseline and project scenarios. But it includes wood harvested in private forests, and it takes no deduction for carbon in harvesting residues or in wood products, so it probably is one.
Mandala’s estimate of 1.5 million ACCUs every year is 60 per cent greater than the carbon contained in all the trees felled annually to supply both public and private native forest wood production in NSW. The comparison illustrates how dependent the projected figure is on assumptions about future forest growth, harvesting counterfactuals, and carbon stock modelling. Those assumptions should be publicly available and independently tested before the resulting credits are treated as equivalent to genuine emissions reductions.
The claimed revenue is also highly price-sensitive
The Mandala central case assumed carbon prices rising to $67 by 2030. Generic ACCUs were trading at approximately $38.65 to $38.70 in early September 2026. At $38.65 per ACCU, 1.5 million ACCUs would have a gross value of about $58 million per year before project management costs are deducted. The claimed revenue stream depends on both the quantity of credits generated and future carbon prices, and neither should be treated as guaranteed.
Fifteen years of credits must support a 100-year proposition
The INFM provides a crediting period of just 15 years, while requiring projects to hold a 100-year permanence period. The method generates carbon credit revenue for 15 years, and the permanence framework continues for another 85.
That has profound implications for claims that INFM revenue can replace the economic activity associated with forestry and fund forest management for the next century. Rod Campbell of the Australia Institute has estimated that at an ACCU price around $40, carbon income attributable to the Great Koala National Park would cover only 5 per cent of estimated park management expenditure over 100 years. The estimate is illustrative rather than a detailed operating budget, but it exposes the mismatch between a short crediting period and the much longer cost of managing forests. The remainder is likely to be borne by the taxpayer.
The existing regional economy also matters
Carbon revenue should be considered in the context of the existing hardwood economy. Ernst and Young estimated that in 2020-21 the NSW hardwood industry generated approximately $2.9 billion in gross revenue and $1.1 billion in gross value added, and supported about 8,900 full-time-equivalent jobs. North-east New South Wales accounted for approximately $1.84 billion in revenue, $700 million in gross value added, and 5,700 of those jobs, and about three quarters of that activity was attributed to timber harvesting from public native forests. Unlike INFM credits, that economic activity is not limited to a 15-year crediting period.
Any credible policy assessment must consider the carbon project, timber substitution, imports, downstream manufacturing, regional employment, and future taxpayer costs together, rather than treating carbon credit income in isolation.
The evidence should come before the credits
There is no justification for treating the headline claim of $1.5 billion in INFM revenue as established fact. The Mandala modelling has not been made available for full independent scrutiny, and it preceded the final statutory method. Forestry Australia’s technical assessment identifies potential over-crediting of 40 to 100 per cent before all leakage and harvested wood product effects are included. Empirical evidence demonstrates substantial substitution of Australian hardwood by imports, the method arbitrarily constrains indirect leakage deductions to a maximum of 40 per cent, and the central $67 carbon price assumption sits more than 70 per cent above today’s market price.
These are not minor technical details. They go directly to whether the credits represent genuine climate abatement, and whether the promised revenue will ever materialise at the scale being promoted.
Climate policy and carbon markets depend on integrity. If one ACCU is used by another party to offset one tonne of emissions, that credit must represent a genuine tonne of additional abatement. Based on the available evidence, that does not seem to be the case.
The Government should release the modelling and evidence underpinning INFM carbon calculations, demonstrate that leakage is being fully accounted for, address the technical concerns Forestry Australia has raised, and explain how a 15-year revenue stream supports the financial and management obligations of a 100-year project. Unless that is done, the claimed carbon windfall should be treated for what it is: a projection resting on assumptions that have not been shown publicly to withstand independent scientific and financial scrutiny. Australians deserve much better than an INFM concept that is driven by ideology, ignores good science, and lacks important transparency.
Please note: Dr John Raison is a former Chief Research Scientist at CSIRO. Dr Raison supplied this analysis exclusively to Wood Central, which has published it in full. Wood Central does not take an editorial position on the future of native forestry in Australia, but will from time to time publish information supplied by subject matter experts where that information has been fact-checked and is judged to be in the public interest. For more, see Wood Central’s editorial charter, published in February 2023.
