Carbon Market Institute renews calls for 70 per cent emissions cut amid new report

The Carbon Market Institute has released a report warning of the risk to Australia’s net zero goal, while calling for more ambitious emissions targets.

The Carbon Market Institute has renewed calls for more ambitious emissions reduction targets after releasing a report warning that Australia risks falling short of its current net zero goal unless urgent action is taken to bolster the nation’s carbon credit scheme.

Expanding the reach of the federal government’s centrepiece emissions reduction scheme, the beefed up safeguard mechanism is one way the carbon markets lobby group believes Australia can fast-track its path to net zero.

An annual report released on Wednesday, the CMI-Westpac Carbon Market Report, provides an update on the state of carbon markets in Australia and overseas, describing 2024 as a “pivotal year for the Australian carbon market” following rising demand for carbon credits resulting from last year’s strengthening of the safeguard mechanism.

The safeguard mechanism currently requires heavy polluters that emit at least 100,000 tonnes of carbon annually to cut their emissions by about 5 per cent every year, or otherwise acquire carbon credits to offset their excess emissions.

The institute, which counts Wesfarmers and BHP among its list of 150-plus members, wants that threshold reduced to 25,000 tonnes, and for the mechanism to be extended across industries such as aviation and long-haul transport.

Carbon Market Institute chief executive John Connor said an expanded scheme would go some way to supporting Australia’s efforts to lead the global push to net zero.

“We strongly think things like the safeguard mechanism need to be deepened and broadened,” he said.

“From CMI’s perspective we do think it (emissions reduction target) should be at least 70 per cent (by 2035) noting the IPCC (Intergovernmental Panel on Climate Change) says we’re about a 50 per cent chance (of limiting global warming to 1.5C if global emissions are cut in half by 2030).

“It’s still a key principle within the UNFCCC (UN Framework Convention on Climate Change), and also the Paris Agreement, that developed countries do more.

“And particularly with a number of the coal-fired power stations coming out before 2035, then we think that’s achievable, and reflected in Queensland, Victoria and NSW having targets with at least 70 per cent by 2035.”

The federal government is currently targeting a 43 per cent cut in emissions by 2030, while aiming to reach net zero emissions by 2050.

The Climate Change Authority is undertaking a review into the decarbonisation pathways needed for different sectors of the Australian economy to achieve net zero by 2050.

Australia’s 2035 emissions target, which will be finalised next year under the terms of the Paris Agreement, will be guided by advice from the authority that is due later this year.