Australia is the Odd One Out on Native Forest Carbon Credits
Portugal is the latest to credit owners who keep harvesting, whilst Australian states must cut wood extraction by at least 20 per cent a year to earn theirs.
A koala and her joey in a eucalypt canopy, with New South Wales lodging the proposed Great Koala National Park, set aside to protect the species, as the first project under Australia's native forest carbon method. (Photo Credit: Supplied to Wood Central / Central PR Group for exclusive use)
Landholders across Portugal, France, Japan, and Canada can earn carbon credits for enhancing the sustainable management of their forests, from replanting storm-damaged stands to thinning crowded ones. By contrast, Australian states can earn credits for shutting down or cutting back harvesting in public native forest, according to the Clean Energy Regulator, which runs the national scheme.
“Projects under the improved native forest management method generate Australian carbon credit units (ACCUs) by ceasing harvesting of timber in defined areas of public native forests to reduce overall harvesting across the project area,” the regulator said. Each project must also cut wood extraction by at least 20 per cent in every year it earns credits, and only state and territory governments, or proponents they approve, can run them.
The Coffs Harbour Hardwoods mill on the New South Wales North Coast, in the region where the proposed Great Koala National Park would end harvesting under Australia’s native forest carbon method. (Photo Credit: Stock image supplied to Wood Central and Central PR Group by Premier Chris Minns office)
As it stands, Australian projects must hold their forests for a 100-year period of permanence, with credits cancelled if harvesting climbs back above set thresholds. Proponents must also deduct any harvesting pushed onto other forests, with independent assessors backing the estimate, the regulator said.
The same scheme already credits plantation growers for “the transition of existing plantation forests from short rotation to long rotation plantation forests,” under its plantation forestry method. Mick Stephens, CEO of Timber Queensland, argued last year that the scheme should instead reward “forest thinning and sustainable timber harvesting as a tool to improve tree growth and productivity, forest health and long-term carbon outcomes in many public and private native forests.”
Hardwood logs of the kind cut into poles, piles and girders, stacked below eucalypt forest on the New South Wales North Coast, where a harvesting moratorium covers the proposed Great Koala National Park. (Photo Credit: Supplied to Wood Central by Chris Minns’ office)
It comes as Portugal this week approved an improved forest management method that credits owners for thicker stands and longer harvest cycles on forest they keep cutting. “Forest land use will be maintained through successive cycles of planting and sustainable management,” its draft, put out for public comment, states, of credited forest that may still be cut over time.
Maritime pine in the Dunas de Ovar forest in Portugal’s Aveiro district, where owners can now earn carbon credits under a method that leaves room for the harvest to continue. (Photo Credit: Anamomarques via Dreamstime, ID 476549584)
“Carbon credits cannot be used or claimed for the purpose of meeting European or international obligations,” Portugal’s decree-law states. Australian credits can instead be bought by the country’s largest industrial emitters to meet their obligations under the Safeguard Mechanism.
Portugal is not the first in Europe, with France’s Label Bas-Carbone, set up by decree in 2018, crediting owners for converting coppice into high forest and replanting stands wrecked by storms, fire, dieback, or pests. Its third replanting method now also counts the carbon stored in harvested wood products.
Japan has credited forest management for longer still, and its government-run J-Credit scheme registered 135 forest projects in the two years to March 2025, after 78 in its first decade. A model project in Miyagi Prefecture is chasing internationally certified carbon credits to fund the thinning Japan’s dense cedar and cypress plantations have gone without.
Foresters climb planted sugi cedar to prune its branches in Japan, the kind of forest management the government-run J-Credit scheme. (Photo Credit: Japan Forestry Agency)
Canada followed in 2024, when its federal offset system began crediting “any forest management activity that increases carbon stocks” on private land, including activities ranging from planting and thinning to harvesting. The European Union is set to follow, with carbon farming methods adopted two months ago covering afforestation, and sustainable forest management listed among those still to come.
Forestry Australia, the foresters’ professional association, had put forward an Enhancing Native Forest Resilience method to encourage “active, adaptive management of native forests across all land tenures.” The federal government picked the native forest method as one of four to develop from 39 expressions of interest, which the Australian Forest Products Association said came “at the expense of” that proposal.
Meanwhile, supporters of the Great Koala National Park in New South Wales value its own credits under the Australian method at more than $300 million over 15 years. Portugal’s environmental agency must report the average price paid for its credits each year under the decree-law that governs the market.
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