When systems catch up: what the Productivity Commission report means for biochar and carbon markets

Written on the 21 January 2026 by Patrick Hastings

The Productivity Commission’s final report on the Circular Economy has now been released. For many in the biochar sector, much of its content will feel familiar rather than novel.
That is not a weakness of the report. It is a signal that government frameworks are beginning to catch up with where parts of the market already are.

Biochar as a reference point — not because it’s new, but because it’s durable

The report highlights issues that members will recognise from lived experience: fragmented regulation, inconsistent treatment across waste, agriculture and climate policy, and the difficulty of recognising durable outcomes within systems designed around linear models.

Biochar is a useful reference point in this context — not because it is an emerging technology, but because it is already physical, measurable and long-lived.

As pathways with high permanence and traceability scale, they tend to expose where alignment across policy, regulation and markets matters most. Biochar has been doing this for some time.

This is not a critique of innovation. It is a reminder that durable outcomes test systems differently from short-cycle or avoidance-based approaches.

Circular economy issues are increasingly carbon market design issues

One of the clearest themes in the Productivity Commission’s work is that circular economy challenges cannot be separated from carbon market architecture.

• Where carbon outcomes sit awkwardly between waste regulation, agricultural frameworks and climate policy, investment friction follows. This matters as Australia moves into a phase where:
• demand for high-integrity abatement and removal is rising
• durability and traceability are under greater scrutiny
• Safeguard and ACCU settings increasingly shape market behaviour

The question is no longer whether durable pathways should exist. It is whether systems are sufficiently coherent to absorb them efficiently and conservatively.

What this means for ANZBIG members

For members, this moment reinforces several realities:

• Regulatory clarity, not technology readiness, is now the binding constraint
• Fragmentation increases project risk, transaction costs and delays — even where the underlying science is settled
• Standards, definitions and claims discipline are prerequisites for scale, not optional extras

This is precisely where ANZBIG’s role sits.

Our focus is not on promoting individual projects or accelerating outcomes ahead of policy. It is on making the industry governable, credible and investable by:

• aligning standards with regulatory expectations
• coordinating industry input so regulators hear one coherent voice
• reducing integrity and reputational risk as carbon pathways mature

Looking ahead

The Productivity Commission report does not call for slowdown. It reflects a system adjusting to reality.

As ACCUs, Safeguard and carbon dioxide removal frameworks evolve, coherence will matter as much as innovation. Durable pathways like biochar are already part of that future but only if policy, regulation and standards are aligned.

ANZBIG will continue to focus on that alignment, so members are not each navigating these issues alone.