Glossary

Explore glossary terms to better understand carbon farming and environmental markets.

Definitions relating to carbon farming and environmental markets.

Abatement: In terms of greenhouse gas emissions, abatement means reducing or avoiding emissions or removing these gases from the atmosphere.

Additionality: A requirement for projects under the Australian Carbon Credit Units scheme, where project activities must be new and additional to activities already being done. Project activities required by law or under another government scheme are not eligible. Projects cannot commence prior to registration with the Clean Energy Regulator.

Australian Carbon Credit Units (ACCUs): An ACCU represents one tonne of carbon dioxide-equivalent greenhouse gas emissions (tCO2e) stored or avoided by a project. ACCUs are a financial product created and issued by the Clean Energy Regulator.

Australian Carbon Industry Code of Conduct: A voluntary, industry-led code aiming to promote market integrity, consumer protection, and appropriate interaction with carbon project stakeholders, including native title holders, representative bodies, land managers, and project owners. The Code is administered by the Carbon Market Institute.

Australian financial services licence (AFSL): A licence that allows people and organisations to provide financial advice and operate in financial markets, including carbon markets. An AFSL is required to provide financial services related to ACCUs.

Australian National Registry of Emissions Units (ANREU): A secure electronic system designed to track the location and ownership of ACCUs. Each project proponent must create and manage their own ANREU account to own, transfer, cancel, or relinquish ACCUs.

Baseline: A baseline is a series of measurements taken before a project is undertaken. These measurements can then be used to measure changes, such as emission reductions or carbon sequestration, resulting from a project.

Biomass: Biomass is organic material that comes from plant or animal matter. A variety of biomass can be used as a fuel source such as agricultural and food waste, energy crops, wood waste, landfill and sewage gases, and organic parts of municipal and sewage waste.

Carbon abatement: A reduction in greenhouse gas emissions and/or an increase in carbon storage that results from project activities. The amount of carbon abatement as a result of project activities is measured from a baseline established before the project starts.

Carbon dioxide (CO2): The main greenhouse gas emitted by human activities. It is one of the main gases emitted from combusting or burning fossil fuels that contain a lot of carbon.

Carbon dioxide equivalent (CO2e): The measure used to compare different greenhouse gas emissions based on their global warming potential.

Carbon estimation area (CEA): The area(s) within a carbon project where the carbon management activities occur (such as planting trees or changing soil management practices), and for which total carbon abatement is calculated. Project CEAs are mapped as part of a project registration.

Carbon farming: Carbon farming refers to land and livestock management and agricultural practices that either increase the amount of carbon stored in vegetation and soils (sequestration) or reduce greenhouse gas emissions from agricultural activities.  

Carbon Market Institute (CMI): The Carbon Market Institute (CMI) is an independent industry association for the carbon market in Australia.

Carbon project: A registered project undertaking verified activities to reduce carbon emissions or sequester carbon, and generate carbon credits. To generate ACCUs, carbon projects must follow an approved ACCU Scheme method and be registered with the Clean Energy Regulator.

Carbon sequestration: The process of capturing and storing carbon dioxide from the atmosphere through the accumulation of carbon in soil or vegetation.

Carbon service provider (CSP):A carbon service provider is a commercial business or organisation that develops and runs carbon abatement projects. They're sometimes called aggregators or project developers.

Clean Energy Regulator (CER):The Australian independent statutory authority responsible for administering legislation to reduce carbon emissions and increase the use of clean energy.

Co-benefits: The social, cultural, environmental, and economic benefits which result from carbon projects, in addition to carbon abatement.

Crediting period: The period for which an ACCU Scheme project can generate and claim ACCUs.

Eligible interest holder: A person or organisation that has a legal interest in the land on which a project is being, or will be, conducted. Project proponents must seek consent from eligible interest holders to register a project with the Clean Energy Regulator.

Environmental Accounting: The practice of including environmental costs and impacts in financial decision-making and reporting.

Environmental markets: Environmental markets allow landholders to earn income by managing, restoring or protecting natural assets on their land. These markets form when environmental benefits, such as carbon sequestration, biodiversity conservation or water quality improvements, are bought, sold or traded. The ACCU Scheme and the NSW Biodiversity Offset Scheme are current 

Fit and Proper Person (FPP) test: A key control to protect the integrity of schemes administered by the CER. It generally considers a person’s past compliance with the law and whether they have the necessary capabilities to participate in a carbon project.

Forward abatement estimate (FAE): The estimated number of ACCUs that a project will generate throughout its lifetime.

Free, prior and informed consent (FPIC): A principle used in development projects worldwide advocating for the right to self-determination for Indigenous people. Consent for projects should be:

free from coercion;
sought and provided prior to a project starting;
informed through accessible communication, and
given with collective consent from the Indigenous community.

Greenhouse gases (GHGs): Greenhouse gases (GHGs) are gases that trap heat in the atmosphere. The most common GHGs include carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O). The accumulation of GHGs in the atmosphere is driving climate change. GHGs are released into the atmosphere through human activity such as deforestation, landfills, and burning fossil fuels and through natural processes like wildfire, decomposition and volcanic activity.

Indigenous Cultural and Intellectual Property (ICIP): Refers to the rights Indigenous peoples have to their tangible and intangible cultural and intellectual heritage. ICIP includes traditional knowledge, cultural expression, objects, secret and sacred material, as well as documentation of Indigenous peoples' heritage in all forms of media.

Industry body: An organisation that represents and supports the collective interests of businesses, professionals, or stakeholders within a specific industry. Industry bodies may set standards, provide guidance, and advocate on behalf of their sector.

Insetting: Insetting is a strategy that focusses on reducing greenhouse gas emissions or storing carbon within an organisation’s own value chain, rather than through purchasing credits generated by others. .

LOOC-C tool: A tool for landholders to explore eligible carbon project types and estimate the potential carbon abatement of a carbon project. The calculator was developed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

Methods (ACCU scheme methods): Detailed rules and processes for carrying out a carbon project under the ACCU Scheme, and for measuring the resulting reductions in carbon emissions. Methods are administered by the Clean Energy Regulator as part of the ACCU Scheme.

Learn more about ACCU Scheme methods

Natural Resource Management Plan (NRM plan): A plan that outlines the long-term actions a region will take to support healthy and resilient landscapes and improve natural resources. Every NRM region in NSW has a Regional NRM plan. Carbon projects must align with the relevant regional plan.

Nature Repair Market: A voluntary national biodiversity market scheme where landholders and project developers can earn and sell biodiversity certificates by restoring or protecting nature on their land. Approved projects, like planting native vegetation or improving habitat—are registered under strict standards.

Offsetting (emissions): Offsetting is when an organisation compensates for its own emissions by buying carbon credits. The greenhouse gas emissions produced in one place are considered to be “offset” by reducing or removing emissions elsewhere. .

Offsets report: A report submitted to the Clean Energy Regulator that includes an explanation of carbon project activities and calculations of carbon abatement achieved during the reporting period.

Permanence obligation: The ACCU Scheme requirement for project proponents to maintain a carbon project and ensure carbon stored or sequestered remains for a set period of time (see permanence period).

Permanence period: The time period (25 or 100 years for most ACCU projects) that permanence obligations apply to a carbon project.

Plant community type: A classification of vegetation based on the dominant plant species and ecological characteristics of a specific area.

Project agents: Entities who can act on behalf of landowners in administering carbon projects by providing reports on projects, submitting applications for carbon credits, and dealing with the Clean Energy Regulator. This can include carbon service providers.

Project aggregators: Entities who can coordinate the aggregation of multiple pieces of land to form one carbon project under a carbon method. They are legally responsible for the aggregated project.

Project proponent: The person or organisation legally responsible for carrying out a carbon project and the entity that receives any ACCUs.

Reporting period: The period of time that is covered in an offset report.

Stacking: Stacking means creating and selling more than one type of environmental credit from the same piece of land or project. For example, where a carbon project also improves biodiversity by replanting native forest and woodland ecosystems it could potentially earn both a Nature Repair Market biodiversity certificate and ACCUs.

Voluntary carbon market: Refers to the portion of the carbon market where companies, organisations or individuals purchase carbon credits voluntarily to offset their greenhouse gas emissions without being legally required to do so.

Updated January 20, 2026