Offset credits can be generated by abatement activities which stop or reduce greenhouse gas emissions. The CPRS will not include offset credits. The Government is of the view that offsetting should only be adopted where coverage under the Scheme is not possible.

This means it will not be possible to create offsets credits to sell to participants who have a liability under the Scheme. Participants in the Scheme will only be able to meet their obligations through purchase of permits or approved international units. Offset credits will be considered again in 2013, when a final decision will be made about whether they should be included in the CRPS.

Permits will be known as carbon pollution permits or Australian emission units. However, participation in the voluntary offsets market may still be possible. The voluntary market involves businesses who buy carbon credits to offset the emissions caused by their products and services and meet corporate commitments to carbon neutrality. The Government has released a Discussion Paper on a National Carbon Offset Standard, for use in the voluntary carbon market which can be viewed at the Department of Climate Change website.