Australia’s carbon market is off to a robust start in 2025, with a record number of Australian Carbon Credit Units (ACCUs) traded in the first quarter, and Queensland stepping up to drive future supply through a major funding round.
A koala resting in a eucalyptus tree, spotted in the forests of Brisbane, Gold Coast, and Sunshine Coast, Australia. AI generated picture.
According to the Clean Energy Regulator’s (CER) latest quarterly report, ACCU trading volumes reached a record 30.9 million in Q1, with the Safeguard Mechanism (SM) sector accounting for 22.1 million of those. The SM, which applies to Australia’s largest emitters, has significantly shaped compliance-driven demand in recent quarters.
Beyond trading activity, the CER report also notes a rise in internal abatement efforts by emitters. This signals a growing trend among regulated entities to reduce emissions directly rather than rely solely on credit purchases.
On the supply side, Q1 saw a decline in new ACCU issuances—3 million credits were issued, down from 6.2 million the previous quarter. Still, the CER stated that issuance levels remain on track to meet the annual projection of 19–24 million credits, with a backlog of crediting applications expected to lift figures in subsequent quarters.
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While market demand expands, the state of Queensland is taking active steps to boost supply. Through its $327 million (AUD500 million) Land Restoration Fund (LRF), the state government has committed $11.69 million (AUD18 million) to eight carbon farming projects that aim to sequester a combined 180,000 tonnes of CO₂ equivalent.
‘Not only will these projects create carbon credits, support landholders to be environmental stewards, but they will also benefit threatened species and ecosystems and improve habitat connectivity,’ said Andrew Powell, Queensland’s Minister for Environment and Tourism.
The largest grant $4.3 million (AUD6.56 million) was awarded to a savanna fire management project co-developed with the Kowanyama Aboriginal Shire Council. Spanning six years, the project includes biodiversity monitoring and feral animal management using the Accounting for Nature framework.
Other initiatives include GreenCollar’s avoided clearing and regeneration projects, rainforest restoration efforts by South Endeavour Trust, and high-altitude cloud forest rehabilitation under Wintergreen Capital Trust. These projects span 315,000 hectares and vary in duration from five to sixteen years.
As both compliance and voluntary demand evolve, these parallel developments in trading and supply mechanisms point to an increasingly dynamic and maturing carbon market in Australia.
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The record-breaking ACCU trading volumes and Queensland’s investment in nature-based carbon projects highlight a global momentum toward scalable, credible climate solutions. As Australia mobilises both public and private sectors to drive measurable impact, the value of high-integrity carbon credits has never been clearer. At DGB Group, we develop and manage large-scale nature-based projects that generate verified carbon units, restore biodiversity, and support local communities. Now is the time to invest in solutions that align ecological restoration with long-term value. Discover how you can be part of this nature-positive future.
