Signal Climate policy. Is the era of unlimited emissions offsets ending?

Summary

The Australian government quietly announced the abolition of Climate Active, its official carbon-neutral certification program, through a consultation paper. The Safeguard Mechanism, which governs major emitting facilities, currently allows unlimited use of Australian Carbon Credit Units, unlike comparable overseas schemes, where the EU and UK prohibit offsets entirely and California caps their use at 6%. A new crediting method called Improved Native Forest Management has been approved under the Australian Carbon Credit Unit scheme, and a record 5.5 million tonnes of abatement was claimed in the first quarter of 2026. Energy retailer Energy Australia admitted in a legal settlement that offsets do not prevent or undo the harms caused by burning fossil fuels for a customer's energy use. The Climate Council has called for Climate Active to be scrapped. These developments suggest Australia's carbon-offset system is at a turning point.