Certified Carbon Credits for Residual Emissions - Australian and International Projects
Every business pursuing genuine emissions reduction will reach a point where some emissions cannot yet be eliminated — known as residual or unavoidable emissions. These may include process emissions in manufacturing, long-haul freight, air travel, or waste streams where low-emission alternatives are not yet commercially available.
Carbonhalo provides access to certified Australian Carbon Credit Units (ACCUs) and internationally recognised carbon credits, sourced from verified Australian and international projects, to help businesses address these residual emissions in a credible, audit-ready way that aligns with AASB S2 disclosure requirements.
Carbon Credits, Carbon Offsetting, and AASB S2 — What Australian Businesses Need to Know
How carbon credits work under AASB S2
AASB S2 requires businesses to disclose their greenhouse gas emissions on a gross basis — that is, before the effect of any carbon credits or offsets. This means that purchasing Australian Carbon Credit Units (ACCUs) or international carbon credits does not reduce a company’s reported Scope 1, 2, or 3 emissions figures under AASB S2.
Carbon credits used by a business are disclosed separately in the Metrics and Targets section of the AASB S2 sustainability report — specifically as part of the business’s net emissions calculation, distinct from its gross emissions inventory. Auditors and investors can see both the gross emissions figure and the credit retirement separately, which means the quality and certification of the credits a business uses is directly visible.
What carbon credits are for under the new framework
Carbon credits remain a legitimate and important tool for businesses that have made genuine emissions reduction progress but still have a residual emissions footprint they cannot yet eliminate. The appropriate use of carbon credits under AASB S2 is not to ‘cancel out’ reported emissions — it is to demonstrate that the business is taking responsibility for the emissions it has not yet been able to reduce, using certified, verifiable instruments that represent real-world carbon removal or avoidance.
A business that discloses 10,000 tonnes of gross Scope 1 and 2 emissions alongside the retirement of 10,000 ACCU-certified credits — transparently, in the Metrics and Targets section of its AASB S2 report — is making a credible, auditable claim. A business that claims its emissions are ‘zero’ due to offset purchases, without separately disclosing its gross inventory, is not.
The difference between ACCUs and international carbon credits
Australian Carbon Credit Units (ACCUs) are the Australian government’s domestic carbon credit instrument, administered by the Clean Energy Regulator and registered on the Australian National Registry of Emissions Units (ANREU). ACCUs are issued for projects that store carbon or reduce emissions in Australia — including native forest regeneration, savanna fire management, and land conservation. Each ACCU represents one tonne of carbon dioxide equivalent (CO2-e) stored or avoided.
International carbon credits are generated by projects outside Australia and certified under globally recognised standards including the Verified Carbon Standard (VCS, administered by Verra), the UN Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism, and the Gold Standard. Like ACCUs, each credit represents one tonne of CO2-e stored or avoided, verified by an independent third-party auditor.
Carbonhalo provides access to both ACCU-certified Australian projects and internationally certified credits. Businesses may use either or both, depending on their disclosure strategy, stakeholder expectations, and the nature of their residual emissions.
Our Projects
- We support projects that help remove unavoidable emissions - such as the emissions caused by vehicles, waste and travel.
- We provide certified Australian Carbon Credit Units (ACCU’s) and international carbon credits that meet globally recognised standards.
- Contributions are quantified by the tonne of carbon emissions reduced, with guidelines tailored to each member's business size.
Be confident knowing all of our projects align with regulations and verified by
Native Forest Regeneration
Location: Paroo region, southwest Queensland
Scope: Spans over 19,000 hectares, focused on re-establishing native forests on previously cleared land.
Tasmanian Forest Growth
Location: Northern Tasmania, managed by Forico.
Scope: Captures an additional 200,000 tones of carbon over 10 years, supporting long-term carbon storage in structural timber and creating regional jobs.
Savanna Management
Location: Jawoyn land (now held as Aboriginal Land Trust) in the Northern Territory, managed by the Jawoyn Association.
Scope: Represents over 600 Jawoyn members and covers regions including Katherine, Kakadu, and Roper.
The New Leaf Carbon Project
Location: Tasmania, managed by the Tasmanian land conservancy.
Scope: 12,000 hectares across Tasmania, focuses on nature conservation while fostering a culture of inquiry, science and research.
Frequently Asked Questions — Carbon Credits and Residual Emissions
Carbon Credits and AASB S2
No. Under AASB S2, businesses must disclose their gross greenhouse gas emissions — the actual Scope 1, 2, and 3 emissions generated by the business before any carbon credit use. Carbon credits do not reduce the gross emissions figure. Instead, they are disclosed separately in the Metrics and Targets section of the sustainability report as part of the business’s net emissions calculation. This means that the quality and certification of the credits a business uses is directly visible to auditors, investors, and regulators.
Residual emissions are the greenhouse gas emissions a business cannot yet eliminate through operational changes, energy efficiency improvements, or technology adoption. They may include process emissions in manufacturing, long-haul freight, air travel, or waste streams where commercially viable low-emission alternatives do not yet exist. Residual emissions are the appropriate target for carbon credit use — not emissions that could be reduced with available technology or operational changes.
Gross emissions are a business’s total greenhouse gas emissions before any carbon credit retirement — the actual Scope 1, 2, and 3 emissions generated by operations. Net emissions are the gross emissions minus any carbon credits retired by the business during the reporting period. AASB S2 requires both figures to be disclosed separately — gross emissions in the Metrics and Targets section of the sustainability report, with carbon credits retired disclosed alongside as the basis for the net emissions figure. Presenting only a net figure without disclosing the underlying gross emissions is not compliant with AASB S2.
Claims of ‘carbon neutrality’ based on carbon credit use are treated with significant scrutiny under AASB S2 and by ASIC, which is responsible for enforcement of the mandatory disclosure framework. AASB S2 does not endorse or prohibit ‘carbon neutral’ claims, but requires that the gross emissions and credit retirement are both disclosed transparently — allowing stakeholders to evaluate the claim themselves. Any public ‘carbon neutral’ claim made by a business subject to mandatory AASB S2 reporting should be supported by the gross emissions inventory and the credit retirement record in the sustainability report. Carbonhalo structures credit use and disclosure in a way that is defensible to external auditors and ASIC.
About ACCUs and Carbon Credit Standards
An Australian Carbon Credit Unit (ACCU) is the Australian government’s domestic carbon credit instrument, created under the Australian Carbon Credit Act 2011. Each ACCU represents one tonne of carbon dioxide equivalent (CO2-e) stored or avoided by a project registered under the Emissions Reduction Fund (ERF). ACCUs are administered by the Clean Energy Regulator and registered on the Australian National Registry of Emissions Units (ANREU). Retirement of an ACCU on ANREU permanently cancels the credit and prevents double-counting. ACCUs have the highest legal standing of any carbon credit available to Australian businesses.
The Verified Carbon Standard (VCS) is the world’s most widely used voluntary carbon credit standard, administered by Verra — an independent non-profit organisation. VCS projects are independently verified by accredited third-party auditors and registered on the Verra Registry. Each credit is called a Verified Carbon Unit (VCU) and represents one tonne of CO2-e stored or avoided. VCS credits are accepted by the majority of corporate sustainability frameworks and are recognised under the ISSB’s IFRS S2 framework for voluntary carbon credit disclosure.
ACCUs are Australian government-issued credits under the Australian Carbon Credit Act 2011, registered on the Australian National Registry of Emissions Units (ANREU), and administered by the Clean Energy Regulator. VCS credits (Verified Carbon Units) are issued by the independent non-profit Verra under the Verified Carbon Standard and registered on the Verra Registry. Both represent one tonne of CO2-e and are independently verified. ACCUs have the advantage of Australian government backing and are the most defensible credit type for Australian mandatory disclosure purposes. VCS credits offer greater project diversity, particularly for international projects.
Gold Standard is a premium voluntary carbon credit certification framework established by WWF and other international NGOs. Gold Standard projects are independently verified and must demonstrate measurable positive impacts on the UN Sustainable Development Goals (SDGs) in addition to their carbon reduction outcomes. Credits are called Gold Standard Verified Emission Reductions (GS-VERs) and are registered on the Gold Standard Impact Registry. Gold Standard is particularly valued by businesses whose stakeholders prioritise development co-benefits alongside climate outcomes.
About Carbonhalo's Carbon Credit Program
Carbonhalo calculates the volume of credits a business needs based on the residual emissions identified in the completed GHG inventory. The residual emissions figure is the portion of the gross Scope 1 and 2 emissions that the business has identified as currently unavoidable. Carbonhalo does not recommend retiring credits against all gross emissions — only against the residual emissions that cannot currently be reduced. The credit calculation is documented in the Metrics and Targets section of the AASB S2 report.
All credits provided through Carbonhalo are retired — not transferred or held — on their relevant registry at the point of client use. For ACCUs, retirement is recorded on the Australian National Registry of Emissions Units (ANREU). For VCS credits, retirement is recorded on the Verra Registry. For Gold Standard credits, retirement is recorded on the Gold Standard Impact Registry. Retirement is a permanent, irreversible action — it removes the credit from the registry and prevents any other party from using it. Carbonhalo provides the client with registry-confirmed retirement certificates for each credit retired, which form part of the audit-ready AASB S2 working papers.
No. Carbon credit sponsorship through Carbonhalo is integrated into the compliance program — it is not a separate product or purchase. Once the baseline GHG inventory is complete, Carbonhalo’s team presents credit options based on the client’s residual emissions profile and sustainability strategy. Credit selection, retirement, and disclosure documentation are all managed within the existing compliance engagement and reflected in the AASB S2 sustainability report without requiring a separate agreement or platform.
Offset Certification
Every program is tailored to the industry sector and includes three core program components designed to empower your members with professional climate reporting capabilities.
Australian Carbon Credits
Australian carbon credits are administered by the Australian Clean Energy Regulator and reside on the Australian National Registry of Emissions Units (ANREU).
International Carbon Credits
Offsets that are retired outside of Australia meet one of more of the following standards: VERRA, UNFCCC and Gold Standard. Businesses may choose to combine Australian carbon credits with International carbon credits within the Carbonhalo platform.