Carbon scheme changes to boost confidence

Australia's carbon credit market is fundamentally sound but needs to be made more transparent to improve public confidence in the scheme.

The Albanese government on Monday said it accepted 16 recommendations to improve the carbon credit unit scheme after an independent review, which followed criticism of the abatement system.

The report found the Australian Carbon Credit Unit (ACCU) system, which is used by companies to offset greenhouse gas emissions, was well-designed when introduced 11 years ago but needs substantial change.

The scheme will play an important role in helping Australia reach net zero emissions by 2050.

The report, which came after a six-month review, disputed claims from critics that the level of abatement from the scheme was overstated.

Climate Change Minister Chris Bowen said the report was a substantial piece of work that had been informed by the best science and evidence.

"We're not going to throw the whole system out, we are going to make sure the system is fit for purpose," he said.

A panel of four experts led by former chief scientist Ian Chubb led the independent review, which received more than 200 submissions.

The report recognised the scheme's integrity had been called into question recently but rejected criticism that reductions in carbon had been overstated.

"While the panel was provided with some evidence supporting that position, it was also provided with evidence to the contrary," it said.

The report found confidence in the scheme had been undermined in part because of a lack of transparency around different stages of the scheme's administration.

Among its recommendations were for an internal body to be set up so that integrity in abatement methods was assured.

The panel also wants the government to clearly identify the roles around the scheme's administration and move some of the responsibilities away from the regulator.

It also recommends making data more available to ensure everyone has the same information.

"The default should be that data should be made public and widely accessible," Professor Chubb said.

The government immediately implemented one of the panel's recommendations that no new ACCUs be issued under the avoided deforestation method, which creates incentives for landholders to reduce their rates of land clearing.

"This entire review was set up to restore confidence in the ACCU market and I think the work that ... the panel has done has achieved that," Mr Bowen said.

The report also recommends more support be given to regional communities and Indigenous peoples to participate in the scheme.

The review was carried out after the integrity of the ACCU system was called into question by a key architect of the framework, ANU environmental law expert Andrew Macintosh, who described it as a "fraud on the environment."

In research published last year, he found up to 80 per cent of the units did not represent new or real cuts and major emission reduction methods were flawed in their design or administration.

Professor Macintosh told AAP he was disappointed by the findings and questioned how the panel reached their conclusions.

"I'm questioning the veracity of the findings and their analysis, and I'm really questioning the absence of any evidence," he said.

He said the report was a contradiction because the review concluded the system was sound while making recommendations for its improvement.

The Australian Conservation Foundation welcomed the move to scrap the "deeply flawed" deforestation method but wants an audit of the credits previously issued under the system.

"ACF welcomes structural changes to the regulator and the inclusion of an integrity commission but the governance remains murky," chief executive officer Kelly O'Shanassy said.