Australia's carbon credits scheme will be independently assessed following concerns raised about its integrity.
Energy and Climate Change Minister Chris Bowen on Friday announced the "comprehensive" review, to be led by former chief scientist Professor Ian Chubb.
A panel of four experts will examine the scheme after experts questioned the integrity of credits used by companies to balance their books on emissions.
The review delivers on an election promise following claims by an ex-chair of the federal emissions reduction assurance committee, Andrew Macintosh, that Australian carbon credits are a "fraud on the environment".
Professor Macintosh's research published earlier this year found up to 80 per cent of the units do not represent new or real cuts and major emission reduction methods are flawed in design or the way they are administered.
"Concerns have been raised recently about several aspects of Australia's carbon crediting system, including the integrity of its key methods and the Australian carbon credit units (ACCUs) issued under it," Mr Bowen said in a statement.
"The government wants to make sure it remains a strong and credible scheme supported by participants, purchasers and the broader community.
"The review will achieve that goal."
The panel will undertake a six-month review of the scheme and is expected to provide a report and recommendations to the government by year's end.
Carbon credits are used by companies to offset greenhouse gas emissions.
The government supports this "but we must do more to unlock the full potential of the carbon credit system" Mr Bowen said.
"There are concerns ACCUs can have unintended impacts, particularly on agriculture," he told the Carbon Market Institute on Friday.
"The review will address these questions."
The additional panel members will be announced later this month.
The review will also involve public consultation on the scheme to hear from academics, industry, First Nations groups and states and territories.
Australian Associated Press
