NCOS Eligible Offsets

Carbon offset units are usually purchased by individuals or companies and used to cancel out, or ‘offset’, the emissions they generate during their normal course of business or day to day life. Carbon offsets are units which represent reductions or ‘abatement’ of greenhouse gas emissions.

Abatement is achieved by:

  • Reducing or avoiding emissions, for example by using renewable energy
  • Removing carbon from the atmosphere and storing it in soil or trees, for example by growing a forest.

There are a number of offset types eligible for use under the NCOS.

Australian Government Units

The following units issued under Australian Government legislation and programs meet the requirements of the National Carbon Offset Standard.

  • All Australian Carbon Credit Units (ACCUs) issued under the CFI;
  • All credits issued under the former Greenhouse Friendly Program*; and
  • Carbon Units issued under Australia's Carbon Price Mechanism from 1 July 2015.

*Note: the government will cancel Kyoto units for Greenhouse Friendly credits issued and cancelled during the Kyoto commitment period; that is by 1 July 2013. After this date Greenhouse Friendly credits will not be eligible for use under the NCOS.

International Units

The following internationally recognised Kyoto Protocol units may be used to meet carbon
price liabilities and will also be accepted under the standard:

Kyoto units

  • Certified Emissions Reductions (CERs) from Clean Development Mechanism projects;
  • Emission Reduction Units (ERUs) from Joint Implementation projects; and
  • Removal Units (RMUs) issued by a Kyoto Protocol country on the basis of land use, land-use change and forestry activities under article 3.3 or 3.4 of the Kyoto Protocol;

    with the following exceptions:
    • long term (lCERs) and temporary (tCERs);
    • CERs and ERUs from nuclear projects, the destruction of trifluoromethane, the destruction of nitrous oxide from adipic acid plants or from large-scale hydro-electric projects not consistent with criteria adopted by the EU (based on the World Commission on Dams guidelines); and
    • any other CERs, ERUs and RMUs that the Government has said cannot be used for compliance with the carbon price mechanism.
  • Any other international units the Australian Government accepts for compliance under the carbon price mechanism.

Other Units

The following voluntary market standards are well established, and units issued and verified under these schemes are widely considered by voluntary carbon market participants to meet this Standard. Before electing to use any of the following units, parties should undertake their own due diligence assessment of the originating projects and underpinning methodologies.

  • Voluntary Emissions Reductions (VERs) issued by the Gold Standard; and
  • Verified Carbon Units (VCUs) issued by the Verified Carbon Standard.

Where credits are issued for reduced emissions from deforestation and degradation (REDD+) projects in developing countries, they must apply methodologies approved under the standard. Project proponents wishing to have a methodology approved should submit it to the Department at NCOS@environment.gov.au for consideration.

The following methodologies have been approved for use under NCOS:

  • VM0005 Methodology for Conversion of Low-Productive Forest to High-Productive Forest v1.1
  • VM0006 Methodology for Carbon Accounting in Project Activities that Reduce Emissions from Mosaic Deforestation and Degradation, v1.0
  • VM0007 REDD Methodology Modules (REDD-MF) v1.3
  • VM0009 Methodology for Avoided Deforestation v2.1
  • VM0010 Methodology for Improved Forest Management: Conversion from Logged to Protected Forest v1.2
  • VM0011 Methodology for Calculating GHG Benefits from Preventing Planned Degradation, v1.0
  • VM0015 Methodology for Avoided Unplanned Deforestation v1.1

VCS offset units generated through these methodologies can be used as eligible offset units under the NCOS.

Purchasing offsets

The Department does not offer trading platform or registry services for the purchase and cancellation of offsets. As part of the Emissions Management Plan, companies must develop their own strategy for purchasing and canceling eligible carbon offset units for each reporting period.

The links below are intended as a guide only and in no way express approval or recommendation by the Department of the content or products provided by the external sources below. You should note that the list below is not exhaustive and we recommend you conduct your own independent research into your particular needs. View the Department's disclaimer.

If you believe a link should be included in this list contact ncos@environment.gov.au.

Information about Greenhouse Friendly credits and abatement providers can be found at Greenhouse Friendly.

Information about the Carbon Farming Initiative units can be found at the Clean Energy Regulator.

Eligible offsets

Title Description Link
APX VCS Registry The APX VCS Registry provides a registry for issuing, tracking and retiring Verified Carbon Units. www.vcsregistry.com
Carbon Catalog Carbon Catalog is a free and independent directory of carbon credits, listing carbon providers and projects worldwide. www.carboncatalog.org
Carbon Offset Guide Australia The Carbon Offset Guide is an independent directory of Australian carbon offset providers developed through a partnership between EPA Victoria and Global Sustainability at the Royal Melbourne Institute of Technology (RMIT). www.carbonoffsetguide.com.au
The Gold Standard The Gold Standard provides an online listing of firms, non-profit organisations and government entities that buy and sell Gold Standard carbon credits and provide services and products for the Gold Standard market. www.cdmgoldstandard.org
Markit Markit provides a registry for carbon, water and biodiversity credits. www.markit.com
The Voluntary Carbon Standard (VCS) Project Database The Voluntary Carbon Standard Project Database provides information on the Voluntary Carbon Standard Association’s approved projects and Voluntary Carbon Units issued under the VCS Program. www.vcsprojectdatabase.org
UNFCCC CDM Bazaar The UNFCCC CDM Bazaar provides information on Clean Development Mechanism offset buyers, sellers and service providers. www.cdmbazaar.net