COP26: Papua New Guinea joins Indo-Pacific Carbon Offsets Scheme initiated by Australia

Papua New Guinea (PNG) has agreed to join the Australia-initiated Indo-Pacific Carbon Offsets Scheme, which is expected to enable companies in the private sector to purchase carbon offsets generated by partner countries in the region, the Australia government announced late Nov. 4.

The agreement follows talks between PNG's minister for the environment, conservation and climate change, Wera Mori, and Australia's minister for industry, energy and emissions reduction, Angus Taylor, during the COP26 UN Climate Change Conference taking place this week in Glasgow.

PNG becomes the second country to partner up with Australia in the regional offset scheme, following Fiji's announcement Nov. 1.

"Our plan to get to net zero emissions by 2050 recognizes there is a role for voluntary purchases of high integrity credits from our region. We are putting in place the building blocks to enable that to occur," Taylor said.

Australia has a well-established domestic carbon market, which allows companies in the private sectors to purchase Australian Carbon Credit Units (ACCUs) either on a voluntary basis or under a compliance regime called the Safeguard Mechanism. This mechanism requires large emitters that have facilities with annual emissions beyond 100,000 mtCO2e to purchase ACCUs to offset emissions that exceed assigned quotas.

"The [Indo-Pacific Carbon Offsets] scheme will also help Australia's private sector meet its emissions reduction targets by enabling investment in credible projects in the region that demonstrate high environmental integrity," Taylor said.

The scheme will deliver renewable energy and nature-based solutions projects to support neighboring countries to reduce emissions and grow their economies, the Australia government website said.

"In Papua New Guinea, we are looking at growing trees and mangroves to increase the capacity of our lungs," Mori said, adding that PNG currently hosts 30% of the balance of tropical rainforests in the world.

"Despite the fact that we only emit a small amount of greenhouse gases, we're sinking more than what we are emitting," Mori said.

Taylor said the partnership would help to ensure PNG is internationally recognized as a source of high-integrity offsets.

"Australia is the gold standard when it comes to transparency and accountability in emissions reporting, and we expect all major economies to be held to the same high standard. That's why we're working with countries in our region to build the capability of their emissions reporting," Taylor said.

"We look forward to working with Papua New Guinea, Fiji and other members of our Pacific family and regional partners to share our expertise and drive investment in low emissions technologies," Taylor added.

The Australian government has committed $104 million to developing the Indo-Pacific Carbon Offsets Scheme, under which it will share technical expertise in carbon accounting with its regional partners, enabling them to meet new Paris Agreement emissions reporting obligations,according to the government's website.