Carbon offsets are tradeable units representing the avoidance or removal of one tonne of CO₂-equivalent greenhouse gas emissions. They allow organisations to compensate for emissions that cannot yet be eliminated by investing in projects that reduce or remove emissions elsewhere – such as reforestation, avoided land clearing, landfill gas capture, or industrial efficiency projects.
In Australia, the primary offset mechanism is the Australian Carbon Credit Unit (ACCU), issued by the Clean Energy Regulator under the Emissions Reduction Fund. ACCUs are generated by registered Australian projects and can be purchased voluntarily or used for Safeguard Mechanism compliance.
The key principles for credible offset use are: prioritise genuine emissions reduction first; use offsets only for residual, hard-to-abate emissions; select high-quality, permanent offsets with robust co-benefits; and disclose offset use transparently in sustainability reporting. Using offsets as a substitute for genuine reduction is increasingly scrutinised by ASIC under greenwashing provisions.
We advise clients on offset strategy – which project types align with their values, what constitutes a credible offset claim under AASB S2, and how to source and retire ACCUs cost-effectively.
