A contentious plan to create a new koala national park in New South Wales (NSW) is set to proceed after a deal between the Greens and Labor parties, despite opposition from three Greens senators who crossed the floor to vote against the plan. The legislation enables states to earn carbon credits for protecting native forests previously designated for logging, allowing industries to offset their climate pollution.
The regulation, known as a carbon credit method, was introduced by the NSW government and supported by the federal Labor government. It faced a disallowance motion in the Senate brought by the Coalition, who opposed the measure primarily on the grounds that it would harm the forestry industry. The motion was defeated 34-27 after Labor senators, seven Greens, independents David Pocock and Lidia Thorpe, Tasmanian senator Jacqui Lambie, and Liberal senator Andrew McLachlan opposed the motion. The Greens held a decisive role given their split stance on the issue.
The plan involves establishing a 476,000-hectare reserve, including 176,000 hectares of newly protected areas intended to serve as a habitat for koalas and other wildlife. While the Greens broadly support the creation of the park, they have been divided over whether to endorse the carbon credit mechanism as the means to secure its future. Greens leader Larissa Waters said the party had negotiated improvements to the method with Labor but intends to oppose future legislation that would generate a larger number of carbon credits, criticizing the broader system for enabling polluters to rely on offsets rather than cutting emissions directly.
In contrast, Tasmanian Greens senators Nick McKim and Vanessa Bleyer, along with Western Australia’s Jordon Steele-John, voted against the deal, citing concerns over commodifying nature and enabling continued emissions by large polluters. They described the measure as making it cheaper for polluters to avoid reducing their carbon footprint and said they would vote according to conscience rather than party lines. The Tasmanian senators also accused Labor of "holding koalas hostage" by tying forest protection to carbon credit revenue, arguing that intrinsic ecological values should not be monetized.
The carbon credit system awards credits equivalent to one tonne of greenhouse gas prevented or absorbed, but it remains controversial because companies can purchase unlimited offsets rather than reducing emissions outright. Critics, including some conservationists and Indigenous groups, contend that this method creates incentives counterproductive to real climate action, and that the proposed offset scheme for the NSW koala park does not represent genuine additional emissions reductions, given the park was proposed nearly a decade before the offset mechanism.
Several environmental organizations opposing the plan include the Bob Brown Foundation, the Wilderness Society, and the Australia Institute. Former Greens leader Bob Brown publicly supported the three dissenting senators, expressing distrust toward Labor’s commitment to forest and wildlife protection under NSW Premier Chris Minns.
On the other side, many NSW Greens members, national conservation groups such as WWF and Greenpeace, Indigenous organizations, and ecological experts support the deal. They argue that without the carbon credit method, there is no certainty the park will be established, and that protecting hundreds of thousands of hectares of habitat for more than 100 threatened species is paramount.
Under the agreement, the use of carbon credits linked to public forests will be restricted, preventing states from selling credits to coal and gas companies if that is the government's intent, a promise made by Premier Minns specifically regarding the koala park. The deal also increases the required reduction in logging activities to qualify for credits to at least 30% by 2030 and eliminates a loophole allowing regrowing native forests to be treated as plantations for logging purposes.
The debate highlights ongoing tensions within environmental and political circles over the role of market-based mechanisms in conservation and climate policies, with the Greens party facing internal divisions on balancing pragmatic progress against ideological purity.