What’s next after ‘Carbon Neutral’: how organisations are using carbon credits on their path to net zero

In an era where tangible climate action is no longer optional but expected, the voluntary carbon market (VCM) stands as a powerful mechanism for businesses to step up and set a precedent for ambitious corporate climate action. In Australia, the way organisations engage with the VCM is evolving, moving beyond the use of carbon credits solely to claim “carbon neutrality” under the Australian Government’s Climate Active scheme, towards integrating credits as one part of a broader, science-aligned net zero pathway.  

The Climate Active program is recognising this shift with long overdue reforms proposed to bring the program closer to international best practice. These changes present an important opportunity to strengthen its credibility and ensure it continues to support voluntary corporate ambition on the path to net zero. 

But, while we continue to wait (patiently) for Climate Active reforms, what’s the best way for organisations to remain productive and ambitious when developing their net zero strategy for FY26 and beyond? 

To help, answer this our Head of Customers and Partnership, Brett Giddings and Manager of Corporate Partnerships & Digital Solutions, Rebecca Heard, explore the importance of setting science-based targets, where carbon credits fit into a robust corporate net zero strategy and best practice in communicating impact to avoid greenwashing or greenhushing.  

Voluntary climate action in Australia  

Australia’s voluntary carbon market continues to evolve and mature. The emergence of integrity standards and the growing number of corporates setting science-based targets marks a positive shift. Globally, 95 million carbon credits were retired in H1 2025, the highest half-year figure ever recorded, with higher-quality credits dominating. While voluntary Australian Carbon Credit Unit (ACCU’s) retirements have been softer, total demand for ACCU’s continues to rise, driven by the compliance market. With the value of the ACCU market expected to reaching A$1.1 billion and future demand expected to outpace supply, voluntary buyers are competing alongside compliance entities for quality Australian credits.  

This year we also saw the introduction of mandatory climate-related financial disclosures with a staggered rollout. Large companies are now required to report more transparently on their emissions, climate risks and transition strategies, aligning with international standards. This greater level of scrutiny means carbon credits can no longer be treated as a simple compliance tick-box. Instead, they need to be positioned as part of a credible net zero plan, alongside measurable operational and supply chain reductions. 

Research by Sylvera and Ecosystem Marketplace, also shows that companies participating in voluntary carbon markets are 1.8 to 2 times more likely to decarbonise year on year, invest three times more in emissions reductions across their value chains and are 3.4 times more likely to set science based targets validated by third parties. By ultimately setting a price on carbon, these targets provide an additional financial incentive to achieve their sustainability goals. 

For FY26, this is expected to drive stronger demand for high integrity projects that deliver verifiable outcomes and withstand the test of regulatory, investor and community expectations. In effect, mandatory reporting is accelerating the maturation of the voluntary market, raising the bar for quality, transparency and accountability in how organisations engage with carbon credits.   

Where do carbon credits fit in a net zero strategy 

Carbon credits play a pivotal role in a credible, science‑aligned net‑zero journey. They offer immediate mitigation of residual emissions, allowing organisations to address unavoidable emissions while investing in internal decarbonisation and supply‑chain transformation.  

Net zero means reducing greenhouse gas emissions as close to zero as possible and using carbon removal solutions to offset what remains. The shift towards science-based targets is redefining the use of carbon credits in a corporate climate strategy and provides a more structured approach to improve transparency, ambition and reporting on progress. Best practice net zero commitments are built on four key principles: 

• A long-term net zero goal by or before 2050 

• At least one ambitious medium-term target 

• Coverage of operational, value chain, customer and financed emissions 

• Clear, demonstrable near-term actions 

Science-based targets translate these principles into measurable milestones, ensuring companies decarbonise at the pace required to keep global warming below 2°C. Carbon credits, particularly high-integrity ACCUs, provide a complementary pathway by addressing residual emissions and funding climate-positive projects while the organisation invests in direct emissions reduction initiatives. When used responsibly, carbon credits help organisations show progress, build stakeholder trust and position themselves as leaders in Australia’s transition to a net zero economy. 

We break this down further here. 

Building trust in the Australian carbon market  

Building trust has been a core focus of development in the voluntary carbon market in FY25 and will continue to be throughout FY26, with improved frameworks, continuous project methodology reviews and the introduction of new integrity standards. This year, the Integrity Council for the Voluntary Carbon Market (ICVCM) set a global benchmark with the introduction of its Core Carbon Principles (CCPs), which is starting to provide buyers with clearer confidence that credits represent high-quality climate outcomes.  

Alongside these governance improvements, there has also been a sharp rise in investment in nature-based solutions such as reforestation, savanna fire management and wetland restoration. These projects not only sequester carbon but also deliver co-benefits for biodiversity, cultural heritage and local communities, making them powerful vehicles for building integrity and trust. The growing preference for projects that deliver outcomes beyond carbon reflects both the integrity focus of the market and the increasing sophistication of buyers, as transparency and accountability become central to corporate climate strategies. 

Communicating your impact authentically  

Greenwashing has become an increasingly discussed topic over the past few years with regulators such as the Australian Competition and Consumer Commission (ACCC) providing guidance on environmental claims, encouraging organisations to be clearer and more transparent about how they describe their climate actions.  

The ACCC encourages businesses to share their progress about genuine steps to improve their environmental performance with consumers and says they should feel confident to advertise the environmental benefits of their products and services, and the steps they are taking to reduce their environmental impact without greenhushing.  

When talking about carbon credits to avoid greenwashing or greenhushing claims companies should aim to: 

• Clearly distinguish between internal emissions reductions and purchased offsets 

• Reference credible, verified projects – citing methodology, standards (e.g., VERRA, Gold Standard), and registries 

• Avoid ambiguous language like “neutral” or “offset” without proper context and disclosure 

• Use impact data from the retirement process – TEM provides retirement certificates, registry listing and portfolio-level summaries enabling accurate, verifiable reporting 

This disciplined approach aligns with evolving ACCC expectations and supports transparent, defensible corporate sustainability narratives. 

As Australia’s voluntary carbon market continues to mature, the message for business is clear: ambition must be matched with integrity. Setting science-based targets, using high-quality carbon credits to complement direct emissions reduction efforts, and communicating progress with transparency are now essential elements of a credible net zero strategy. With FY26 bringing greater scrutiny from regulators, investors and the community, organisations that act early and authentically will not only meet their climate commitments but also strengthen trust, resilience and long-term competitiveness in a low-carbon economy. 

Contact our team of carbon experts to explore how voluntary carbon credits can enhance your FY26 net-zero strategy, backed by a rigorous due diligence, meaningful impact, and transparent storytelling.