Nearly a third of the carbon credits bought by Australia’s top emitting companies last year were based on an offsetting technique that has been banned for future projects after a government review found it would be ineffective at reducing emissions.

More than 28 per cent of carbon offsets purchased by companies operating under the government’s safeguard mechanism in the 2023-24 financial year were based on avoided deforestation, a technique that allows landowners to earn carbon credits for not clearing native forests they are otherwise entitled to.