Carbon market analysts have criticised the government's new expanded credits scheme, casting doubt over its effectiveness.
"Blue carbon" is among a range of new options that can earn credits in Australia's voluntary carbon market, alongside methods involving forestry and biomethane.
The blue carbon method can generate credits from coastal wetland ecosystems by increasing tidal flow, for example through a sea wall, which helps to return the ecosystem to its natural form.
Minister for Industry, Energy and Emissions Reduction Angus Taylor announced on Tuesday that farmers, businesses and industries will benefit from the new methods of offsetting carbon emissions, part of the Emissions Reduction Fund (ERF).
But Polly Hemming from think tank The Australia Institute told AAP the existing carbon market lacks integrity and she has no confidence in the new methods.
"Offsets are being handed out like Monopoly money ... the credit exists but it's not actually purchasing anything real."
Ms Hemming, who until 2020 worked in the federal Department of Industry, helped develop the government's carbon neutral program.
"You have to look at it in a broader context, so if you look at what the government is expecting from soil and blue carbon it is grossly overestimating the capacity of coastal ecosystems."
She said one example where the system fails is where mangroves are growing back anyway due to sea levels rising, and questioned why landowners should be rewarded for that.
"I have huge doubts whether any additional abatement will happen with blue carbon ... when you look at the government's track record for giving offsets to other natural solutions like trees growing back ... it's unlikely that it's project activity that's creating results," she told AAP.
The minister said expanding the eligible projects and supply of Australian Carbon Credit Units (ACCUs) helps Australia achieve its emissions reduction targets.
Other changes include how carbon funding for plantation forestry works, as well as abatement from industrial and commercial processes, and biomethane activities like turning organic waste, animal effluent and wastewater into biogas.
"It will support landholders, communities, and businesses to undertake projects along coastlines and earn ACCUs in exchange for the emissions avoided and carbon stored by these projects," Mr Taylor said.
"The ERF has already delivered more than 100 million tonnes of abatement and these new methods will bring on even more projects and abatement," he said.
The expanded eligibility has been developed by the Clean Energy Regulator, which is in charge of issuing the credit units.
Industry group BioEnergy Australia, which represents 150 organisations across Australia, welcomed the new credit earning methods.
Chief executive Shahana McKenzie told AAP expanding biomethane activities such as capturing and refining biogas from organic waste, animal effluent and wastewater is good news for the sector.
"The new method will allow the capture of biomethane from facilities such as waste water treatment plants and other high methane producing activity and ... it can now be injected into the gas network and for that to be recognised," she said.
"Capturing methane that would otherwise be going into the atmosphere - it's a significant difference in terms of the reduction of that methane being used for energy activities rather than it being emitted, around 20 times."
Ms McKenzie said it also opened up further opportunities for the agriculture sector.
"Hopefully it will really spur on development in this space, there are currently thousands of these projects across Europe and Australia is tipped and ready to start progressing," she said.
The Delorean Corporation is an Australian company focused on processing and diverting organic waste from landfill, including animal effluent and waste water, to generate biomethane.
Managing director Joe Oliver told AAP the new credit earning methods will mean more projects will become financially viable.
"What we're able to do is divert organics from landfill, generate green gas and offset fossil fuel gas, so it's a real emissions reduction and a real driver for offsetting carbon.
"It's great for agriculture ... because the capture of organics, the output of energy and then the output of fertiliser back, means it's a big win around biomethane."
Australian Associated Press
Sign up for our newsletter to stay up to date.