Carbon Offset Regulators Dominated by Oil and Gas Industry: FOI Documents

New research released by The Australia Institute reveals the extent to which fossil fuel companies and other big emitters influenced the Clean Energy Regulator (CER)’s carbon offset rules around carbon capture and storage (CCS) projects.

CCS projects have long been promoted by fossil fuel companies as a solution for their industries’ greenhouse emissions, but despite receiving billions in public subsidies there are still no fully functioning CCS projects in Australia. The CER’s new rules will see more public subsidies to CCS via the Federal Government’s Emissions Reduction Fund (ERF).

The research, based on documents acquired under Freedom of Information, shows that independent researchers were actively blocked by the CER from participating in the process that led to a CCS project by oil and gas company Santos being registered with the ERF.

The revelations raise serious questions of integrity for both for the CER and the associated Emissions Reduction Assurance Committee (ERAC) – the key committee responsible for advising the government on whether offset projects will actually reduce greenhouse gas emissions.

Key Findings:

The method to fund CCS through the Emissions Reduction Fund was ‘co-designed’ by fossil fuel companies and major emitters such as Chevron, Woodside and Santos.
Independent researchers and civil society groups were blocked from participating in the consultations by the Regulator, which relied on ERAC to hold the process to account.
The FOI documents show that at least two ERAC members work for organisations with vested interests in carbon capture and storage.
Legislation explicitly prohibits members of the ERAC being employed in a capacity that may conflict with their duties as a committee member.
At least two ERAC members attended the CCS ’co-design’ sessions in their industry roles. ERAC went on to advise Government on the CCS method its members helped to design.
The Chair of ERAC, a former gas industry executive, states that ERAC members have complied with their legal obligations.
The Australia Institute makes no allegation of illegality by ERAC members.
“This report raises serious conflict of interest concerns about the use of public money for fossil fuel projects and around the integrity of existing carbon credit rules,” said Richie Merzian, Climate & Energy Program Director at The Australia Institute.

“The integrity of carbon offsets is critical for reducing emissions and for any ‘net zero’ claim.

“The integrity of Australia’s offset system must now be questioned given the poor governance documented in this report.

“It is critical that the organisations responsible for overseeing these schemes are independent and credible – both in perception and in fact – to ensure the veracity of any net-zero claim.

“The government has committed $2.6 billion of public money to purchasing Australian Carbon Credit Units. The public deserves confidence in our carbon credit system, as do the companies and other organisations buying carbon credits to underpin their carbon neutral claims.

“But there can be no confidence in a system that is overseen by a regulator that listens only to the fossil fuel industry.

“These are the actions of a regulator dominated by the industries it is supposed to regulate.

“The involvement of ERAC members who simultaneously have paid positions lobbying for high-emitting industries makes this worse, not better.

“The independence of both the CER and ERAC is now in question, casting doubt over the integrity of the whole Emissions Reduction Fund.

“The Climate Change Authority called for an audit of the governance of the CER in 2020. This should go ahead as a matter of urgency.

“The eventual federal integrity commission should also look into the CER, ERAC and their industry ties.”

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