Overview
The concept of “stacking” carbon credits has gained increasing attention as developers seek to maximise land value, diversify revenue streams and enhance ESG outcomes. In Australia, this issue is particularly relevant for renewable energy developers – especially proponents of large-scale solar farms – who are exploring whether generation assets can be co-located with land-based carbon sequestration activities on the same or adjacent land.
This article considers whether, and how, land sequestration projects may be stacked with renewable energy projects, with a focus on Australian Carbon Credit Unit (ACCU) eligible activities and the regulatory principles that govern such arrangements.
What Is Carbon Credit Stacking?
Carbon credit stacking refers to the generation of multiple, distinct environmental credits from the same land area or project footprint, where each credit reflects a separate and independently verifiable environmental outcome. Critically, stacking must be distinguished from ‘double counting’, which occurs when the same environmental outcome is credited more than once – a practice that undermines market integrity and is prevented under the ACCU Scheme in connection with ACCUs.
Examples of stacking could include:
- carbon sequestration credits (such as ACCUs generated from reforestation or soil carbon projects – we discuss more about approved methodologies in our article here); and
- other environmental credits, such as state-based biodiversity or ecosystem service credits.
When appropriately structured, stacking can deliver:
- improved project economics through diversified income streams;
- more efficient land use, particularly for large-scale solar assets;
- enhanced ESG and sustainability outcomes, supporting investor and offtaker expectations; and
- greater resilience to changes in energy or carbon markets.
Renewable Energy Projects and Carbon Credits: A Different Regime
In Australia, renewable energy projects (such as solar farms) typically participate in the Renewable Energy Target (RET) and generate Large-scale Generation Certificates (LGCs) (noting that the RET framework is being replaced by the Renewable Electricity Guarantee of Origin certification framework – we discuss this in more detail in our publication here). These certificates reflect the generation of renewable electricity. By contrast, ACCUs are issued for verified emissions reductions or removals, in accordance with legislated methodologies under the ACCU Scheme.[1] While a solar farm cannot generate ACCUs for its electricity generation, land-based sequestration activities co-located with a solar project may potentially be eligible for ACCUs, provided they independently meet all ACCU Scheme requirements and represent genuinely separate environmental outcomes.
This distinction is critical: the ACCUs would not be generated from the renewable electricity generation (which is prohibited), but rather from distinct land management activities that sequester carbon, such as:
- Environmental plantings on non-panel areas, perimeter areas or adjoining land parcels;
- Soil carbon sequestration projects integrated with continued grazing or agricultural use beneath or between panel arrays (in agrivoltaic models); or
- Human-induced regeneration of native vegetation in areas not required for solar infrastructure.
The long-awaited Integrated Farm and Land Management (IFLM) method is currently open for consultation in draft.[2] If adopted within a commercially viable construct, this method is anticipated to provide both enhanced investment return certainty for ACCU project developers and the ability to further enable stacking of various co-located ACCU generating projects.
In such arrangements, revenue would be derived from two fundamentally different activities:
- Electricity sales and LGCs from the solar farm’s renewable generation; and
- ACCUs issued for eligible carbon sequestration activities occurring on the same or adjacent land.
Case Study: Blind Creek Solar and Battery Project
The Blind Creek Solar Farm & Battery project is an agrisolar development on pastoral land near Bungendore, New South Wales, Australia. It combines a large‑scale utility solar farm (approx. 300 MW) with co‑located battery storage (~243 MW/486 MWh) while retaining and enhancing agricultural and ecological uses of the land
Project Structure & Co‑Location:
- Developed by local landowners together with renewable energy investors, the project sits on over 600 hectares of historically grazed farmland and is said to avoid 600,000 tonnes of CO2 emissions.[3]
- The design intentionally allows sheep grazing, regenerative agriculture practices, soil carbon sequestration activities, biodiversity restoration, and solar generation to coexist.[4] For example, grass species suited to partial shade are planted under panels to support grazing, with normal grass species planted in between panels.[5]
- Environmental rehabilitation efforts include revegetating creek lines, creating conservation zones equal to 15% of the property total area, and planting more than 14,000 trees.[6]
Conclusion
In Australia, stacking carbon credits from land sequestration projects with solar developments is feasible in principle, but requires careful regulatory navigation and disciplined project design.
As Australia’s carbon markets mature and policy frameworks evolve, the intersection of renewable energy and carbon sequestration will likely receive continued regulatory and market attention. Successful stacking arrangements will be those that prioritise integrity over aggressive crediting, transparency over ambiguity, and long-term sustainability over short-term revenue maximisation.
The overarching principle remains constant: every tonne of carbon sequestered or emissions avoided should be counted once, claimed once, and contribute meaningfully to genuine climate action. Developers who embrace this principle whilst creatively structuring multi-benefit projects will be best positioned to navigate Australia’s evolving carbon landscape.
[1] Clean Energy Regulator, How to participate in the ACCU Scheme (Web Page, 31 October 2025) <https://cer.gov.au/schemes/australian-carbon-credit-unit-scheme/how-to-participate-accu-scheme>.
[2] Department of Climate Change, Energy, the Environment and Water, ACCU Scheme – Draft Integrated Farm and Land Management (IFLM) Method Consultation (Web Page) <https://consult.dcceew.gov.au/accu-scheme-draft-iflm-method>.
[3] Blind Creek Solar Farm, Homepage (Web Page, 2025) <https://www.blindcreeksolarfarm.com.au/>.
[4] Blind Creek Solar Farm, Refocusing our farm (Web Page) <https://www.blindcreeksolarfarm.com.au/refocusing-farm>.
[5] Ibid.
[6] Ibid.
