The City of Sydney and City of Melbourne in Australia are relying heavily on cheap carbon offsets from China and Turkey to achieve their net-zero emissions goals. These offsets are purchased from foreign governments for projects that they would operate anyway. The City of Sydney obtained most of its carbon credits in 2022 from a Turkish wind farm and in 2021 from a solar project in China. However, these projects do not meet the standards set by the Clean Energy Regulator for Australian Certified Carbon Units (ACCU).
The majority of Sydney’s offsets in 2022 came from the Kavakli Wind Power Plant in Turkey, while wetland conservation projects in Indonesia and clean burning cookstoves in Nepal also contributed. In 2021, 89% of Sydney’s offsets came from the Three Gorges New Energy 100MW Solar Power Project in China, which is operated by the state-owned China Three Gorges Corp. These offsets are considered avoidance credits, as they come from renewable energy projects that avoid emissions from fossil fuel generation.
There are concerns about the effectiveness of relying on these offsets. Audrey van Herwaarden, an analyst at the Australian Conservation Foundation, points out that some offset programs have low integrity and their impact on real-world emissions is questionable. The City of Sydney claims to be on track to achieve its emissions reduction targets through energy savings, fuel switching, and renewable energy, but it remains unclear how much impact the offsets have had.
Both the City of Sydney and City of Melbourne have plans to transition away from purchasing overseas offsets and instead focus on high-quality Australian regenerative offsets. However, their reliance on international offsets raises questions about transparency and the standards of the offsets purchased.
The Climate Active program, which certifies carbon neutrality, has been criticized for its low standards of substantiation and verification. Former ACCC boss Allan Fels noted that there is no verification of whether businesses certified by the program are actually climate leaders, nor is there substantiation of the offsets they purchase.
Overall, while the City of Sydney and City of Melbourne may be able to achieve their net-zero goals through the purchase of cheap international offsets, there are concerns about the effectiveness and transparency of these offsets and their impact on reducing real-world emissions. Transitioning to high-quality Australian regenerative offsets may be a more sustainable solution.
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