Australia’s coastline supports a globally significant share of the world’s blue carbon ecosystems including mangroves, seagrass meadows, saltmarsh and tidal wetlands. These habitats play an important role in climate regulation, biodiversity conservation and coastal resilience.

Blue carbon refers to atmospheric carbon dioxide (CO₂) absorbed and stored in the vegetation and sediments of coastal ecosystems. These habitats cover a relatively small area globally – about 5% of the sea floor by area – yet they account for a disproportionately large share (about half) of carbon burial capacity due to their deep, waterlogged soils, which slow decomposition and lock away carbon over long periods (centuries to millennia).

Since European settlement large areas of these ecosystems have been lost; approximately half of Australia’s mangrove and tidal marsh habitat, and approximately a quarter of its seagrass habitat. The protection of existing blue carbon ecosystems is increasingly recognised as an important component of climate adaptation, biodiversity conservation and coastal management

When blue carbon coastal ecosystems are drained or disturbed – such as for building development or agriculture – they can lose ecological function and release plumes of carbon dioxide back into the atmosphere, contributing to climate change.

Conversely, reestablishing and restoring these ecosystems can help to reinstate their capacity to store carbon as well as provide other ecosystem services.

Australia has been investing in blue carbon accounting and restoration approaches. The Emissions Reduction Fund's tidal restoration method enables eligible projects to generate carbon credits by restoring tidal inundation to previously drained coastal wetlands.

Carbon markets can provide a source of funding for habitat restoration and ongoing management. However, project viability depends on a range of factors, including restoration costs, monitoring and reporting requirements, governance arrangements and land tenure considerations.

Blue carbon restoration may also generate broader environmental, social and cultural outcomes. Indigenous-led projects, for example, can support employment, strengthen cultural knowledge and contribute to long-term stewardship of Country. Best practice increasingly supports Indigenous leadership, co-design and equitable benefit sharing throughout project development and implementation.

Habitat restoration has a nationally significant carbon sequestration potential. Australia has pioneered implementing blue-carbon-based strategies to help meet its carbon commitments under the 2016 Paris Agreement.

In 2019, Australia was the first country to comprehensively inventory its blue carbon storage at the national level. It remains one of the few countries to include blue carbon within its Nationally Determined Contributions (NDC) to mitigate and adapt to climate change.

The Federal Government supports various initiatives that aim to promote blue carbon ecosystem conservation and restoration, including enabling blue carbon projects to claim carbon credits for the carbon that they sequester.

The first blue carbon method under the Emissions Reduction Fund (ERF) is for tidal restoration of blue carbon ecosystems. The method supports projects to claim carbon credits for re-establishing tidal inundation – by removing a sea wall, levee or bund – to coastal wetlands that were either previously partially or completely drained.

Registered tidal restoration blue carbon projects in Australia can claim carbon credits by calculating the amount of carbon abated by their project using the ERF’s carbon accounting model (BlueCAM). The carbon credits can be sold directly to the ERF, or to a secondary market to businesses seeking to offset their carbon emissions.

These mechanisms aim to incentivise restoration as well as help to fund long‑term ecosystem management.

Additional methods are being explored to expand the scope of blue carbon accounting through vegetation protection, grazing exclusion, and broader habitat restoration.

For example, research is collecting baseline data for a blue carbon method based on restoring wetland habitat by fencing the area to exclude damage-causing farmed and feral non-native ungulates such as cattle and pigs.

Meaningful Indigenous involvement is an important component of effective and equitable blue carbon development. Best practice goes beyond participation to support Indigenous leadership and co‑design, ensuring projects align with community priorities.

Indigenous-led projects can deliver significant benefits, including:

• employment and skills development
• strengthening cultural practices and knowledge systems
• improved wellbeing and connection to Country
• long-term ecosystem stewardship and monitoring
• opportunities to participate in emerging carbon markets.

Projects should also consider Traditional Owner rights, Native Title interests and equitable benefit-sharing arrangements from the earliest planning stages.

Research has identified several factors that improve coastal habitat restoration efforts. In tidal wetland regeneration, for example, these factors include the following.

• Select the right site, which includes avoiding sites with excess erosion or sediment deposition
• Select the right plant species for the region, and minimising stress on plants such as poor soil nutrients or the impact of herbivores.
• Use strategies such as planting in high density clumps, with high species diversity, and fertilising the soil.
• Consider projected climate change – note the poleward shift of ecosystems due to rising temperatures – to future-proof restoration efforts at certain points along the coast.

Long-term monitoring and adaptive management are also important because restoration outcomes can vary considerably among sites and over time.

Seagrass restoration is often more complex and costly than other blue carbon interventions.

Historically, seagrass loss has primarily been due to chronic stressors such as poor water quality and agricultural run-off: rather than direct clearing for land use change typically experienced in mangrove and tidal wetland habitat. Therefore, successful restoration therefore depends on addressing underlying stressors before intervention begins.

Effective approaches may include:

• improving water quality
• reducing catchment-derived pollution
• stabilising sediments using biodegradable materials
• applying lessons from successful pilot projects.

Recent restoration trials in Australia and New Zealand have demonstrated encouraging results, highlighting the potential for larger-scale seagrass restoration in suitable locations. For example, interventions explored include biodegradable hessian or jute to stabilise the seafloor around replanted seagrasses to help the ecosystem to reestablish.

Unclear or overlapping land ownership - particularly around the dynamic coastal boundary between public and private land along the shoreline - can complicate restoration and raise questions about carbon credit ownership.

In most Australian states and territories, the ‘mean high water mark’ defines the legal boundary between private property and public land along the coast. This ambiguous and dynamic boundary can result in a lack of clarity as to whether mangrove and tidal wetland habitats are located on public or private land, or straddle both.

Early clarification of tenure – boundary ambiguity and legal rights, including rights of Traditional Owners – should be clarified through contractual agreements at the start of any blue carbon habitat restoration project.

This step adds time and expense; researchers have called for policy and law reform to reduce this barrier to blue carbon ecosystem restoration.

Urban development and infrastructure can prevent coastal ecosystems from migrating inland as sea levels rise. Known as 'coastal squeeze', this can reduce future habitat extent and limit restoration opportunities. It should be considered during project planning and site selection.

Restoration outcomes can vary depending on site conditions, ecological responses, and climate impacts. In addition, future risks such as sea-level rise, marine heatwaves, cyclones and changing sediment regimes may affect long-term ecosystem condition and carbon storage.

This uncertainty can present challenges for investors and project developers, reinforcing the need for adaptive management, robust monitoring and realistic expectations about project performance over time.

Blue carbon restoration presents a significant opportunity to deliver climate, biodiversity and cultural benefits simultaneously. However, achieving these outcomes requires more than efforts in ecological restoration alone.

Success depends on integrated approaches that combine robust scientific knowledge, supportive policy and carbon-market frameworks, clear governance and tenure arrangements, and meaningful, long-term partnerships with Indigenous communities.