Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

Thanks, Senator Roberts. Perhaps I can deal first with some of the opinions you've offered around the Chubb review. I think it's unfortunate that you chose to impugn the integrity of Professor Chubb in the way that you did in your contribution. I can talk a little bit about the Independent Review of Australian Carbon Credit Units. You raised that and you raised a set of questions around the reasoning for that review.

The Australian carbon credit units scheme plays an important role in our pathway towards net zero emissions by 2050. In particular it does that by incentivising reductions and sequestration that wouldn't otherwise occur. The Independent Review of Australian Carbon Credit Units was commissioned to ensure that ACCUs—the shorthand term for the units—and the carbon crediting framework maintain a strong and credible reputation. It's important it needs to be supported by participants and it needs to be supported by purchases, and the broader community needs to understand that the scheme is strong and creditable.

Professor Chubb undertook that review, along with a panel, and concluded that the ACCU scheme arrangements are sound and that there are appropriate checks and balances at the scheme, method and project level to protect the integrity of the scheme and the credits that are created under it. The panel did make some recommendations, and we're grateful to them for that. Their recommendations are sensible changes, and they seek to ensure that the scheme is aligned with evolving best practice and will increase public confidence in the scheme, supporting more participation and increased abatement. The key recommendations include separating the functions of integrity assurance, regulation and administration; maximising the transparency of scheme information to increase trust; fostering innovation in methods and project implementation; and supporting greater participation, including by First Nations communities.

When we received that report, we released it on 9 January 2023 and accepted in principle all of those 16 recommendations. It was a thorough process, Senator Roberts. There was a public discussion paper in response to that. There were over 200 written public submissions. They were all online, except for the people who requested that their submission be confidential.

The panel also met with technical and carbon industry experts, government agencies, regional councils, First Nations people, native title representative groups, academics, carbon service providers and scheme participants, industry bodies, environment and non-government organisations, and current and former scheme administrators. They undertook project site visits in a range of settings to investigate methods and project implementation.

They also commissioned and published advice from the Australian Academy of Science regarding the science that underpins four of the methods and the strengths and limitations of those methods. The panel was briefed by the Clean Energy Regulator on its administration of the scheme, including the compliance tools and the powers and processes that the Clean Energy Regulator uses to find and address any project non-compliance and ensure individual projects are delivering abatement.

We're grateful to Professor Chubb for the work that he did and the work of the panel more generally. I think it's unfortunate that you seek to characterise it in the way that you did in your remarks. Professor Chubb is an eminent person who has contributed a great deal to the Australian community. I don't think it's necessary to speak about him in the way that you did, Senator Roberts.

We are now moving to implementation. We're seeking to implement any of the recommendations that don't require further consultation with stakeholders. For example, the minister, Mr Bowen, has requested advice from the Emissions Reduction Assurance Committee to revoke the avoided deforestation method, which was one of the recommendations. We are requiring further consultation, and we'll work with stakeholders on the implementation of the other recommendations that have implications for a wide range of scheme and market participants, government agencies and other stakeholders.

You also raised a set of issues, I think, about the legislation before us. The legislation before us creates a framework for crediting. The proposed changes include reducing safeguard mechanism baselines and enabling safeguard facilities that stay below their baselines to generate tradable credits that are known as safeguard mechanism credits or SMCs. The purpose of the bill is to enable the crediting element of the reforms.

You're right that other parts of our reform process will be dealt with through subordinate legislation, and a draft set of rules was released for consultation back in January. I'd like to step you through why we've chosen to go down that path, Senator Roberts. The amended framework will rely on a large amount of technical detail to achieve its aim of reducing scope 1 industrial emissions in line with Australia's emissions reduction targets. That detail would reflect a range of factors, including market dynamics, industry practices and available technologies.

As you'd appreciate, all of those things can change. Technology changes very rapidly at times. In order to operate as intended, it's appropriate that some details of the safeguard mechanism framework would be set out in delegated legislation so that changes in any of those factors—market dynamics, industry practices and available technology—could be quickly reflected and wouldn't cause unintended burdens or consequences. For example, the government-defined production variables and emissions intensity values include a large amount of technical detail, which might require updating at short notice to be appropriate for use.

Appropriate constraints on delegated legislation are included in the bill through the requirement that the minister only makes safeguard rules if the minister is satisfied that they are consistent with the proposed new second object of the National Greenhouse and Energy Reporting Act. That helps ensure that any safeguard rules are consistent with the intent of the primary legislation. The government has carefully considered the split between primary and subordinate legislation. For example, penalty arrangements for an excess emissions situation are currently contained in regulations; that was the case under the previous government. This bill changes that, updating penalty arrangements for excess emissions situations. They will now be contained in the bill itself.