Securing high-integrity carbon: Why plantation forestry ACCUs are gaining attention

Australia’s carbon market is entering a more disciplined phase, where quality, transparency and supply certainty are becoming central to procurement decisions.

Recent data from the Clean Energy Regulator shows a significant increase in Australian Carbon Credit Units (ACCUs) and Safeguard Mechanism Credit retirements, alongside a decline in SMC issuance — reinforcing that compliance demand is strengthening as baselines tighten.

In practical terms, this means many large emitters are relying more heavily on carbon credits, with fewer internal or lower-cost alternatives available, and there is increasing pressure to secure supply ahead of further tightening.

This shift is sharpening focus not just on accessing ACCUs, but on securing the right types of credits — those that can withstand regulatory scrutiny, support disclosure obligations and align with long-term decarbonisation strategies.

And it’s in this environment that plantation forestry ACCUs are attracting growing interest.

A proven industry, now delivering carbon outcomes

Plantation forestry is not new to the Australian economy. It underpins an approximately $25 billion renewable manufacturing sector and has operated within a corporate and regulatory environment for decades.

The industry supports the production of construction timber, pulp and paper, and packaging and fibre products — all of which play a critical role in housing supply, domestic manufacturing capability and regional employment.

It also contributes to climate outcomes through carbon sequestration and the substitution of more emissions-intensive materials.

Billie Jones, SFM’s Carbon Projects Manager, says the emergence of plantation forestry in the carbon market is a natural extension of this established role.

“Plantation forestry has always delivered across multiple dimensions — economic, environmental and regional. What we’re seeing now is the formal recognition of its carbon value within a regulated framework,” Ms Jones said.

“For corporate buyers, that’s important. These are not one-off projects — they’re part of an established industry with real assets, long-term management and well-understood systems.”

A structured and regulated pathway to ACCUs

Under the ACCU Scheme’s plantation forestry method, eligible activities can generate carbon credits by increasing the amount of carbon stored in plantation forests.

This includes practices such as transitioning to longer-rotation plantations, maintaining forest cover where it might otherwise be lost, or establishing permanent forest outcomes where appropriate.

These projects operate under legislated rules, with defined accounting approaches and requirements for monitoring, reporting and — where required — independent audit.

According to SFM Managing Director Strategy, Risk and Trading David Wise, this level of structure is becoming increasingly important for corporate buyers.

“There is a growing expectation that companies can clearly explain and stand behind the offsets they use,” Mr Wise said.

“Plantation forestry ACCUs sit within a regulated Australian framework, with defined methodologies and reporting requirements. That gives buyers a level of transparency and confidence that is increasingly valued.”

Integrity and supply converging as key issues

As demand for ACCUs grows, so too does scrutiny around credit quality and availability.

At the same time, international carbon markets continue to develop — including through mechanisms under the Paris Agreement’s Article 6 — but are not yet delivering consistent global standards or supply certainty.

This is placing greater emphasis on domestic ACCUs, particularly those that can meet both compliance needs and rising expectations around integrity.

Mr Wise notes that this is changing how organisations approach procurement.

“We’re seeing a shift toward more deliberate, forward-looking strategies,” he said.

“It’s not just about sourcing volume. It’s about securing the right credits, in the right structure, with a clear line of sight to delivery and disclosure.”

Bridging the gap between supply and demand

While high-quality ACCU projects are being developed, connecting that supply with the right corporate buyers — under the right commercial structures — remains a key challenge in the market.

SFM is working in partnership with leading Australian carbon platform, Clima to address this.

Clima specialises in carbon market advisory and transaction services, operating across project origination, corporate procurement and secondary market activity.

Clima’s Managing Director, Guy Dickinson says this role is becoming increasingly important as the market matures.

“Large emitters are managing complex, multi-year compliance obligations, often alongside significant reputational considerations,” Mr Dickinson said.

“What we do is help translate carbon supply into structured procurement strategies — whether that’s long-term offtake agreements, portfolio construction or market access — so that buyers can secure ACCUs in a way that is both cost-effective and defensible.”

Through this partnership, SFM’s plantation forestry projects are being brought to market and matched with corporate buyers seeking compliance-grade carbon supply.

A narrowing window for early action

There is also a timing dimension that is becoming increasingly relevant.

As Safeguard Mechanism baselines decline through to 2030, demand for ACCUs is expected to increase. At the same time, the availability of higher-integrity, domestically generated credits remains finite.

This dynamic is encouraging some organisations to move earlier — securing supply through forward agreements rather than relying on spot market availability.

Mr Dickinson notes that this approach is increasingly being viewed through a risk management lens.

“For many buyers, the question is no longer whether they will need ACCUs — it’s when and under what conditions they secure them,” he said.

“Taking a structured approach now can provide greater certainty on price, availability and quality over time.”

Positioning for a more mature market

As Australia’s carbon market becomes more sophisticated, procurement decisions are becoming more nuanced.

Buyers are placing greater emphasis on how credits are generated, how they are verified, and how they can be justified within internal governance frameworks and external disclosures.

Plantation forestry ACCUs — grounded in a legislated methodology and linked to an established domestic industry — represent one pathway that is gaining traction in this environment.

“The market is moving toward greater transparency and accountability. In that context, the ability to demonstrate where your carbon credits come from, how they’re generated, and how they fit within your broader strategy is critical, Mr Wise said.

Engaging with the market

As the market continues to develop, closer engagement between project proponents, intermediaries and corporate buyers will play an important role in ensuring that supply and demand are effectively aligned.

Through its partnership with Clima, SFM is working to facilitate that connection — helping ensure that high-integrity plantation forestry ACCUs are accessible to the organisations that need them.

In a tightening market, organisations seeking to better understand how plantation forestry ACCUs may fit within their compliance or decarbonisation strategies are encouraged to engage with Clima to explore available opportunities.