NSW blocks fossil fuel companies from using koala park carbon credits, exposing flaws in Australia's carbon offset system

The NSW government has barred coal and gas companies from buying carbon credits generated by the Great Koala National Park, dealing another blow to Australia's troubled carbon credit system. The move comes days after the Albanese government abandoned its Climate Active carbon neutral certification scheme. The Australia Institute's Richard Denniss said the decision confirms that Australia cannot offset fossil fuel pollution by simply promising not to chop down some trees. Denniss pointed out that there is no federal law preventing resale of carbon credits to any industry, making the NSW announcement a clumsy state intervention into federal policy. He noted that fossil fuel projects currently buy about two thirds of all Australian Carbon Credit Units sold under the Safeguard Mechanism. The announcement raises questions about whether carbon offsets can genuinely compensate for new gas and coal mine emissions.