The Australian Government’s “Improved Forest Management in Multiple-use Public Native Forests method” incentivises state governments to cease certain native forest harvesting purportedly to reduce Australia’s carbon emissions. The Department’s announcement and the response from the industry body, Forest & Wood Communities Australia may be the start of much debate over a contentious scheme.
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New ACCU Scheme method: DCCEEW
Department of Climate Change, Energy, the Environment and Water (DCCEEW), Media Release, 26 June 2026
The Australian Government has made the Improved Forest Management in Multiple-use Public Native Forests (INFM) method. The method allows projects to earn carbon credits under the Australian Carbon Credit Unit (ACCU) Scheme.
The INFM method allows state governments to earn Australian Carbon Credit Units (ACCUs) by ceasing planned harvesting in defined areas of multiple-use public native forests that would otherwise be used for commercial forestry.
The benefits of the INFM method include:
- increasing carbon stored in native forests by allowing them to grow beyond harvesting age
- avoiding emissions from timber harvesting and associated activities such as post-harvest burning
- protecting habitat and enhancing biodiversity outcomes
Background
The government agreed to prioritise development of the INFM method in 2024, based on advice from the Emissions Reduction Assurance Committee (ERAC). The NSW Department of Climate Change, Energy, the Environment and Water (NSW DCCEEW) led method development.
The ERAC commenced its review of the method in October 2025 and conducted public consultation on the method in January 2026.
Following consultation, the ERAC provided advice to the Assistant Minister for Climate Change and Energy (Assistant Minister) on making the method.
The Australian Government made the INFM method determination on 25 June 2026.
The facts about the INFM method
- An independent committee (ERAC) advised the Assistant Minister on making the INFM method, following public consultation and technical assessment against the legislated Offsets Integrity Standards.
- Public consultation provided stakeholders, including the community, forest industry, academics and environmental groups, with the opportunity to provide feedback. The consultation included a webinar where stakeholders could ask questions about the method and the ERAC’s assessment process.
- Like all ACCU methods, the use of this method is voluntary and it will and it will be up to state governments to decide whether they use this method.
- The INFM method doesn’t ban forestry – INFM projects can create an alternative economic option and can operate alongside a sustainable forestry industry.
- The method sets out a number of features to ensure estimates of the amount of carbon stored by a project are conservative, including provisions to account for carbon leakage (where emissions shift by increasing harvesting elsewhere).
FWCA: INFM carbon method risks creating credits on paper while destroying real regional economic value
Forest & Wood Communities Australia (FWCA), Media Release, 26 June 2026
Forest & Wood Communities Australia says the Federal Government’s new Improved Forest Management in Multiple-use Public Native Forest methodology contains serious carbon-integrity and economic flaws, and risks rewarding governments for shutting down sustainable regional industries.
Forest & Wood Communities Australia has warned that the new Improved Forest Management in Multiple-use Public Native Forests carbon methodology risks issuing Australian Carbon Credit Units for abatement that may not exist in the atmosphere, while undermining one of regional NSW’s most important renewable manufacturing supply chains.
FWCA Chair and Director Steve Dobbyns said the methodology is being presented as a climate and economic opportunity, but in practice it could reward governments for closing sustainable public native forest industries while pushing timber production, jobs, emissions and biodiversity impacts somewhere else.
“This is not climate action if it simply shifts timber production offshore or into other supply chains with higher environmental risks,” Mr Dobbyns said.
“The atmosphere does not care whether emissions are moved across a State border, into private forests, into imported timber, or into substitute materials like steel, concrete and plastics. If the wood is still needed, the carbon impact has to be counted honestly.”
The INFM method recognises leakage risk and includes deductions for harvesting in excluded areas, increased harvesting in other public native forests, increased harvesting in private native forests, and broader indirect leakage. However, the most important category – indirect leakage, which is intended to account for emissions and removals outside the project area – is capped at 40 per cent.
Mr Dobbyns said that cap is the central problem.
“Recent work by Venn et al. found that reduced domestic native forest harvesting has been a structural driver of Australia’s growing import dependency, with a long-run timber harvest leakage rate of 81.3 per cent,” he said.
“In plain English, for every 1,000 cubic metres of native forest timber production removed from Australia, the modelling indicates Australia imports approximately 813 cubic metres of solid wood products from overseas in the long run.”
“That is not a minor leakage effect. That is most of the timber being replaced through imports.”
The Venn et al. analysis also found that native forest hardwood and plantation softwood are complementary goods in the Australian market, not simple substitutes. That means closing native forest supply is not automatically offset by plantation pine. Instead, reduced native forest harvesting has materially increased Australia’s dependence on imported solid wood products.
FWCA said the finding directly challenges the credibility of the INFM methodology.
“A carbon method that caps indirect leakage at 40 per cent cannot credibly account for evidence showing timber harvest leakage of 81.3 per cent,” Mr Dobbyns said.
“If a State government removes 1,000 cubic metres of native forest timber supply and Australia then imports 813 cubic metres to replace it, the atmosphere does not see that as a 100 per cent climate gain. The forest and emissions impacts have simply been pushed into other jurisdictions.”
“And if those imports come from countries with weaker forest governance, higher illegality risk, longer transport chains or higher embodied emissions, the climate and biodiversity outcomes may be worse — not better.”
Using a simple carbon-crediting example, if a project claims 100 tonnes of gross abatement and actual leakage is 81.3 per cent, the real net climate benefit may be only 18.7 tonnes. But if the methodology caps the indirect leakage deduction at 40 per cent, the project may still be credited as if 60 tonnes of abatement remains.
“That is not conservative accounting,” Mr Dobbyns said.
“That is capped accounting. It creates a built-in over-crediting risk.”
FWCA said there is another serious consequence that has received little public attention: the INFM method does not simply stop harvesting inside a proposed carbon protection area. Through its leakage rules, it creates a financial penalty if harvesting increases elsewhere.
“The INFM method does not directly ban harvesting on neighbouring land, but it effectively puts a carbon-credit penalty on increased harvesting elsewhere in the State,” Mr Dobbyns said.
“That means governments chasing ACCUs have a financial incentive to constrain timber supply not only inside the proposed park, but across private native forests as well.”
“This should concern every private native forest owner, contractor, sawmiller, processor and regional community that depends on hardwood timber supply.”
“Once governments start relying on carbon credits from stopping harvesting, any increase in timber production elsewhere can become a threat to those credits. That creates pressure to suppress supply across the wider landscape, even where harvesting remains lawful, sustainable and properly regulated.”
FWCA said the economics of the proposal are just as troubling.
Supporters of the Great Koala National Park carbon-credit proposal have claimed it could generate $300 million over 15 years. That sounds large until it is compared with the existing timber economy the policy threatens to displace.
“That $300 million over 15 years is only about $20 million per year,” Mr Dobbyns said.
“By contrast, the North East NSW hardwood timber industry currently contributes around $700 million in gross value add every year, generates around $1.84 billion in gross revenue, and supports approximately 5,700 full-time equivalent jobs.”
“Over the same 15-year period, that is about $10.5 billion in gross value add from the existing hardwood industry in North East NSW alone.”
Mr Dobbyns said the 15-year comparison understates the issue, because the INFM method creates a 100-year permanence obligation.
“If governments want to lock up productive forests for 100 years, then the economic comparison must also be made over 100 years,” he said.
“On current figures, the existing North East NSW hardwood industry represents around $70 billion in gross value add, $184 billion in gross revenue, and the equivalent of 570,000 full-time job-years over a century.”
“That is the real economy at risk.”
“So the public is being asked to accept the destruction of a real, renewable, regionally based industry worth hundreds of millions of dollars every year, in exchange for speculative carbon-credit income that is a fraction of the economic value already being generated.”
Mr Dobbyns said the comparison exposed a major flaw in the way the INFM debate is being presented.
“This is being sold as if carbon credits are new money and timber production is an environmental liability,” he said.
“That ignores the fact that the existing hardwood industry already supports jobs, manufacturing, transport, small family businesses, construction supply chains, and regional communities.”
“It also ignores the fact that when domestic timber production is shut down, Australia still needs timber. We simply import more of it, lose sovereign capability, and push the environmental burden offshore.”
FWCA said the problem is particularly concerning where governments seek to use carbon credits to justify the closure of productive public native forests that currently supply Australian homes, infrastructure, manufacturing and regional jobs.
“This is how bad policy compounds,” Mr Dobbyns said.
“First, governments shut down sustainable local timber supply. Then they claim carbon credits for doing it. Then Australia imports more timber or substitutes with more emissions-intensive products. Regional communities lose jobs, builders lose supply, consumers pay more, and the claimed climate benefit may be far smaller than advertised.”
“Worse still, Australia risks taking timber from some of the most tightly regulated forests in the world and replacing it with products from countries where forest governance, labour standards and environmental controls are often weaker.”
FWCA is calling for the INFM methodology to be independently reviewed before any ACCUs are issued under it.
At a minimum, FWCA says the review must examine:
- whether the 40 per cent cap on indirect leakage is defensible in light of evidence that Australian native forest harvest leakage may be 81.3 per cent;
- whether the method properly accounts for imported timber, offshore forest impacts and substitute materials;
- whether the method overstates additionality by assuming harvesting would otherwise continue at modelled baseline levels;
- whether State governments should be allowed to generate ACCUs from policy decisions that reduce domestic timber supply;
- whether the method creates incentives to suppress lawful timber harvesting in other public and private native forests;
- whether claimed carbon-credit revenue is being compared honestly with the economic value of the industries being displaced;
- whether the 100-year economic cost of locking up productive forests has been properly assessed; and
- whether the claimed abatement remains credible once timber market displacement is fully accounted for.
“Carbon credits must represent real climate benefit, not accounting convenience,” Mr Dobbyns said.
“If the evidence shows that for every 1,000 cubic metres of native forest timber Australia stops producing, around 813 cubic metres is replaced by imports, then a 40 per cent leakage cap is not an integrity safeguard. It is an over-crediting mechanism.”
“And if a project promises $300 million over 15 years while putting at risk an industry generating around $700 million in gross value add every year in North East NSW alone, then the economics do not stack up either.”
“Regional timber communities should not be sacrificed for carbon credits that may not stand up to scrutiny. Australia needs honest carbon accounting, sustainable domestic timber production, and policies that reduce global emissions rather than exporting them.”
