Integrity concerns have been raised over "junk" federal government carbon credits to offset deforestation in land that was never going to be cleared.
They make up more than 20 per cent of Australia's carbon credit units and the government is spending $310 million to buy 26.3 million of them for projects to avoid deforestation.
But analysis from the Australian Conservation Foundation and progressive Australia Institute think tank indicates credits are being issued for projects where no clearing is intended.
The groups believe this has serious implications for the integrity of the coalition's $4.5 billion emissions reduction fund being used to help Australia meet climate targets.
Australia Institute climate and energy director Richie Merzian compared it to paying non-smokers to stop smoking.
"We need to ensure the integrity standards so companies and individuals, when they purchase a carbon credit, are purchasing an emissions reduction," he told AAP.
Avoided deforestation method credits are issued on the basis that clearing will occur within a certain area over a 15-year period.
Abatement is calculated on the estimated amount of greenhouses gases that would have been emitted if the land was cleared.
The ACF and Australia Institute looked at average clearing rates in western NSW between 1988 and 2013.
They found the rate would need to have increased by between 751 per cent and 12,804 per cent for the assumptions the credits were based on to be accurate.
Based on historic clearing rates, it would take between 128 to 1936 years to clear the areas in question.
Land clearing permits allocated by the NSW government for about 200 million hectares between 2005 and 2010 were bought back by under the federal scheme from 2013.
The assumption was the permits would be used and so buying them back would avoid clearing and additional emissions.
But the report found clearing rates increased in the state's west in the six years to 2019.
"That shouldn't be the case if you're buying this many avoided deforestation credits," Mr Merzian said.
"There's no way of saying they're legitimate emissions reductions. They wouldn't have happened but for the purchase and the tearing up of these land clearing credits.
"It could be junk and it's on the government to justify why it's not."
The report calls for the use of the credits to be ditched and associated projects to be cut off from receiving any others over the 15-year period.
It also wants companies and individuals buying carbon credit units to be warned this specific type does not represent real or additional abatement.
Mr Merzian hopes the findings increase pressure on Australia to up its game ahead of UN climate talks in Glasgow in November.
Australian Associated Press