The New South Wales government's long-promised great koala national park is set to proceed after the Albanese government approved a regulatory change that allows state governments to earn carbon credits by storing carbon dioxide in native forests on public land. The assistant climate change minister, Josh Wilson, confirmed the approval, which unlocks hundreds of millions of dollars for protecting forests previously earmarked for logging.
Carbon Credit Mechanism and Controversy
Each carbon credit represents one kilogram of emissions prevented or removed from the atmosphere, typically through tree growth or landscape storage. However, the use of carbon credits is contentious because polluting companies can buy unlimited credits—also known as offsets—to count as their own emission reductions while continuing to pollute. Scientists have warned that limiting the climate crisis requires rapid direct cuts in emissions, and carbon offsets should be used sparingly.
The NSW government proposed the new carbon credit method and had been awaiting federal approval before delivering its election commitment to add 176,000 hectares of national park near Coffs Harbour. The method could be applied nationwide, but conservative governments in Tasmania and Queensland have rejected using carbon credits to reduce logging, arguing it would cost regional jobs.
Koala Park Details and Safeguards
NSW Labor first promised a koala park while in opposition over a decade ago. In September, the government confirmed its commitment, stating the park would protect old-growth forests, at least 12,000 koalas, and more than 100 other threatened species. Campaigners were concerned that the park's creation might lead to increased forestry elsewhere, but the final design of the carbon credit method aims to prevent this by reducing and capping logging as credits are issued.
The state environment minister, Penny Sharpe, said the carbon credit revenue would benefit regional communities by creating diversified revenue streams and 100 new jobs in the national park. The government will now register its carbon project plan with the federal Clean Energy Regulator.
Mixed Reactions from Conservation Groups
Conservation organisations were divided in their response. Dailan Pugh from the North East Forest Alliance called it a 'gamechanger' that could allow the recovery of an area that had lost half its stored carbon due to logging. The Australian Climate and Biodiversity Foundation, led by former Treasury secretary Ken Henry, described the method as a 'once-in-a-generation opportunity to drive down greenhouse gas emissions'. The Nature Conservation Council welcomed strong safeguards preventing logging from shifting elsewhere, according to campaigner Clancy Barnard.
However, The Wilderness Society opposed the change, arguing it would allow big emitters to continue polluting and called for native forests to be protected without offsetting. Its Tasmanian forest campaigner, Hughie Nicklason, said carbon credit schemes had 'repeatedly been decried as a sham'. NSW Greens MP Sue Higginson criticised reducing forests to 'cash cows and offsets for climate polluters', while former Greens leader Christine Milne accused NSW Labor of 'retrofitting an election promise' and called carbon credits 'shonky and lacking integrity'.
Industry and Political Responses
The Australian Forest Products Association accused the government of prioritising politics over science, arguing the method lacked integrity, transparency, and additionality. Its acting chief executive, Richard Hyett, said he was 'gutted by this controversial decision'. Under carbon accounting rules, credits can only be created if they represent an 'additional' emission reduction—meaning the project would not have happened otherwise. Critics challenged the justification, noting that NSW Labor's public position was that the koala park depended on carbon credits, but government sources indicated it intended to create the park with or without that revenue.
Josh Wilson told Nine newspapers that the Albanese government had 'no plans to end logging' and that using carbon credit revenue to protect forests was 'a voluntary option for state governments to diversify their regional economies'. He said the revenue could be spent on ecotourism and carbon land management.
