Options for Forest Sector Participation in International Carbon Markets: Unlocking the Carbon Market Potential of Australia’s Forest Sector

Shaun Suitor (), David Hadley and Fabiano Ximenes
Additional contact information
Shaun Suitor: School of Natural Sciences, University of Tasmania, Private Bag 37, Hobart, TAS 7001, Australia
David Hadley: UNE Business School, University of New England, Armidale, NSW 2350, Australia
Fabiano Ximenes: New South Wales Department of Primary Industries, Parramatta, NSW 2150, Australia

Land, 2025, vol. 14, issue 3, 1-28

Abstract: Carbon markets have emerged as a central component of international climate change policies. Within these markets, forest carbon offset projects have become a key nature-based solution due to their low cost, large scale, and co-benefits. However, despite Australia’s vast forest estate, forest sector-specific offsets remain nascent in the Australian Carbon Market, the ACCU Scheme. Only 3.27% of Australian Carbon Credit Units have been issued to forest sector projects. This limited participation can be attributed to several constraints within the ACCU Scheme, principally the limited number of methods available for the forest sector to engage in. As a result, less than 1% of Australia’s current forest estate, both plantation and native forests, is considered eligible to participate in the ACCU Scheme. This limited eligibility is further compounded by the complexity and cost of participation, which act as significant barriers for forest projects within the ACCU Scheme. This paper explores the potential to expand forest sector involvement in the Australian carbon market through a comprehensive literature review of forest sector involvement in international carbon markets. The review found extensive participation by the forest sector in international carbon markets, with various methods available across 20 markets, including the largest voluntary and compliance markets. These methods cover plantation forests, native forests, the bioeconomy, and the built environment. Key results indicate that revising existing methods, developing new ones through the ACCU Scheme’s proponent-led method development process, and increasing participation in international voluntary methods could significantly expand the types of forest sector projects contributing to emissions reductions through carbon markets. Broader conclusions suggest that by embracing lessons from international practises and addressing current methodological constraints, Australia can realise this potential. Doing so would not only bolster the nation’s climate change mitigation efforts, but also unlock the co-benefits of biodiversity, water quality, soil productivity, and ecosystem resilience, ultimately contributing to a sustainable and resilient bioeconomy.

Keywords: forest offsets; climate change; Australian Carbon Credit Units Scheme; carbon credits and forests (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2073-445X/14/3/473/pdf (application/pdf)
https://www.mdpi.com/2073-445X/14/3/473/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jlands:v:14:y:2025:i:3:p:473-:d:1599039

Access Statistics for this article

Land is currently edited by Ms. Carol Ma

More articles in Land from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().