Changes to the carbon credit scheme will allow third-party stakeholders to come up with innovative ways to reduce emissions but critics say it could undermine the system.
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A new proponent-led process will allow projects and methods to be developed outside of government.
"From today, interested parties can submit an expression of interest to develop a new method," Climate Change Minister Chris Bowen said at a carbon farming forum on Tuesday.
"This is a big step forward," Minister Bowen said.
"I've asked the emissions reduction assurance committee to look at those expressions of interest and provide advice on which ideas should be progressed for method development."
The change was among the recommendations delivered in 2023 by an independent review of the carbon credit scheme, led by Australia's former chief scientist Ian Chubb.
Carbon credits are a tradable financial product used to encourage abatement, with projects including plantings of native species.
But former chair of the Emissions Reduction Assurance Committee Andrew Macintosh from the Australian National University said the changes were "back to the future."
"Up until 2014, third parties could submit method proposals," Professor Macintosh said.
"It's basically back to the future ... this is literally just a reboot of the old process."
Prof Macintosh, a critic of the carbon credit scheme, said while there were some positives to the idea, if run poorly the change could magnify any integrity problems.
"It was dropped because the department's resources were being dragged around by third parties," he said.
"People submit whatever, there was a camel proposal, desert orchard, all sorts of weird and crazy stuff."
John Connor from the industry body, the Carbon Market Institute, said the scheme would work differently to the way it operated in 2014.
"We now have over a decade of experience of what works and what doesn't," Mr Connor said.
"Until now, the government has had sole responsibility for prioritising and developing new methods, but this has proved too slow."
Farmers have given the news a cautious welcome, but argue integrity remains the key.
"Having stakeholders including farmers suggest carbon-credit methods can be a good move, so long as the carbon reduction is real," Farmers for Climate Action's Peter Holding said.
"Taking the politics out of the process is a good move," Mr Holding said.
A spokeswoman for Minister Bowen said the changes were delivering on the Chubb review's recommendations.
"The process announced today helps manage stakeholder and government resources to bring forward and test the best ideas," the spokeswoman said.
Government data shows more than 1850 projects are registered under Australia's carbon credit scheme, up from 1200 two years ago.
Australian Associated Press
