Public consultation will open on January 2 and run for four days past the Australia Day public holiday on a proposed new carbon method that would allow the Australian state governments to earn carbon credits by stopping timber harvesting in native forests. The timing of the consultation period has already been slammed as “suboptimal”, with the window cutting across Christmas and New Year, causing one senator to worry that the department won’t get proper consultation.
Wood Central understands that the Improved Native Forest Management method, developed by the NSW Department of Climate Change, Energy, the Environment and Water and prioritised by the Australian Government in October 2024, would allow governments to generate Australian Carbon Credit Units by slashing timber harvesting in multiple‑use public native forests.
“The proposed INFM method involves the cessation of, or a substantial reduction in, timber harvesting on publicly owned native forest land,” according to a release published by the department today. “The proposed method allows a project proponent (i.e. a state government) to impose a temporary moratorium on timber harvesting while the feasibility of its ACCU project is assessed.”
Addressing the Environment and Communications Legislation Senate Committee on Monday, Professor Karen Hussey, Chair of the Emissions Reduction Assurance Committee, said the creation of new parks in NSW, Tasmania and Queensland—including NSW’s Great Koala National Park—was contingent on the method being approved so that it could generate the ACCUs needed to fund them.
Below is an extract from the Hansard of the Senate Estimates Committee:
Senator Ross Cadell (NSW Nationals), Shadow Minister for Water, Emergency Management, and Fisheries and Forestry: I have confidence he said it would still be delivered, but in a different way. I’ll get back to you. While we’re going there, delayed harvesting, potential harvesting and reduced harvesting are all activities that the forest managers do at the moment, aren’t they? We’re talking about a different scale. They already happen. So what is the additionally that they’re proposing?
Prof. Hussey: The method proposes one or both of two activities. One is to cease harvesting full stop, and the other is to delay the period at which you harvest. Essentially, instead of being in 40‑year or 80‑year cycles, you allow the trees to grow for longer to sequester. The method has what’s called a sustainable yield calculation. What it allows for is an adjustment to take account of the sustainable yield that might have happened and the actual yield that did happen as a consequence of actual logging activity. As long as the baseline itself is an accurate reflection of what we believe would have happened otherwise, evidence of carbon having been avoided or sequestered after that fact would be considered additional. So you have to prove with a high level of confidence what you think the baseline harvesting would have looked like and then you have to accurately measure what has happened as a consequence of the project’s intervention. You’re right; it’s about scale. The way the method works at moment is there are about 10 different settings in the method to allow for additionality challenges, but it is things like making sure that nobody gets any ACCUs, the state doesn’t get any ACCUs, unless at least 20 per cent of the baseline harvest has been reduced in aggregate over the life of the project, which is a 15‑year crediting period, and each 12‑month period within the reporting period. That allows for that scale or that structural adjustment that makes it different from what you’ve said, quite rightly, might happen now. So there’s a scale component to it. In the design features of the method, it allows for what’s called the carbon protection area, which is where the cessation of the harvesting actually happens. But the calculations for abatement and the issuance of ACCUs is undertaken with reference to the entire forest area or region. That is to allow for the calculation of consequences of that intervention taking place. It speaks to the leakage, but it also speaks—
Senator Cadell: I’m going to leakage as my next point. It’s not all on the mid‑north coast of New South Wales. There are pockets that still go there. Do we look at additional harvesting there offsetting the Koala National Park?
Prof. Hussey: Yes. I should stress, because it’s something that I think is often forgotten, when the committee assessed the EOI—and it is still the case now—the method was not designed exclusively for a New South Wales scenario; it was designed for the three states that still conduct commercial harvesting in native forests. There are a number of settings that speak to the leakage piece, and these are the ones that we’ll be testing through that consultation process. The design that includes the whole forest area allows you to track any additional harvesting that has happened as a consequence of the drop in supply from the carbon protection area.
Senator Cadell: Over what landscape? Close? Adjacent to?
Prof. Hussey: The RFA.
Senator Cadell: The whole RFA.
Prof. Hussey: Or, where there isn’t an RFA, the project area has to be at least 150 million hectares. Correct me if I’m wrong.
Senator Cadell: I will not take you literally!
Prof. Hussey: There’s also a setting within the method that requires the reporting of any uplift in harvesting that takes place on private land. That’s for the obvious risk, which is that if you reduce your supply over here, it’s going to pop up over there. That’s within the state boundary. Then there’s a five per cent catch‑all discount rate, which is for carbon leakage more generally. We’ve got four main settings currently in the method that get our arms around, collectively, what we think the carbon leakage risk might be. Obviously, the consultation process is open to different perspectives.
Senator Cadell: I’m pleased. I don’t see a really robust leakage mechanism in the Macintosh scheme—I haven’t seen the latest things but previous models have not had a really robust leakage mechanism. Going back to the statement that Koala National Park ‘doesn’t happen without this method’—that’s of some concern. Is there a risk this method will credit decisions made for non‑carbon reasons, such as Koala National Park’s acts of conservation or regulatory constraints. Is that part of your process that, with RFA limits and all this, this method gets credit for stuff that isn’t really carbon related, because it’s linked to such a program?
Prof. Hussey: It’s a risk. The method needs to be designed to manage that risk. We all need to have confidence in it, because nobody wants ACCUs issued off the back of a method that doesn’t have integrity. That will be ERAC’s responsibility.
Senator Cadell: In previous iterations of estimates, not the latest one—I won’t ask you to comment on one that’s actually going on—you have raised some concerns around these two things, especially leakage and additionality. Have you discussed these things prior with DCCEEW in previous iterations? Have you previously discussed with DCCEEW these concerns around leakage and additionality?
Prof. Hussey: Yes. Our secretariat is in DCCEEW. In preparation for receiving this method or any method under the proponent‑led method development process, the secretariat engages with the proponent on questions that they have—or questions that the committee will have which they think they might be able to pre‑empt—so the proponent is as prepared as they can be when they eventually come to the committee. It would be entirely accurate to say that we have had conversations about all of the Offsets Integrity Standards with respect to this method, not just additionality and carbon leakage, but when we look at a draft method, we’re looking at it with respect to the six OIS. More recently, after last week, we did put to the proponent—or we put it to the department and then asked the department to put it to the proponent—that we’d really appreciate some advice on what last week might mean with respect to that method.
Senator Cadell: We’re getting to the consultation phase of the proponent.
Prof. Hussey: Yes.
Senator Cadell: I’m hearing that can be as short as 28 days; is that correct?
Prof. Hussey: Under the act—
Senator Cadell: It’s at least 28 days, I think.
Prof. Hussey: No, it’s a maximum of 28 days.
Senator Cadell: Have we started pre‑consultation consultations or speaking with stakeholders?
Prof. Hussey: Well, there’s a good point. This is not the first time the method has been out in the community, if you like. There was very extensive consultation undertaken by the proponent earlier this year. This is the ERAC phase of the consultation process. I think, in all honesty, Senator, there probably would be a little bit of leeway, with some extensions at the end of the 28 days, should push come to shove—just because it is Christmas—which we have done with the savanna fire management method, as well. So that’s not unique to this method. But the 28—
Senator Cadell: So it’s not 28 business days; it is 28 days, and we have Christmas, New Year’s and every day throughout that period.
Prof. Hussey: It’s 28 days, yes.
Senator Cadell: Okay. That’s suboptimal, one might say—but anyway.
