Australia’s coastline supports a globally significant 12% of the world’s blue carbon mangrove, seagrass and tidal wetland habitat. Since European settlement, however, 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.

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 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.

Compared with terrestrial ecosystems, blue carbon habitats can store carbon more efficiently and are less vulnerable to sudden carbon loss from disturbances such as wildfire. Protecting and restoring these systems is therefore an important strategy for both climate mitigation and adaptation.

When degraded or drained, these ecosystems can release stored carbon back into the atmosphere. Conversely, restoring tidal flows and natural processes can rapidly reinstate their carbon sequestration function, alongside broader ecosystem recovery.

The rich carbon absorption capacity of blue carbon habitats is significant for both the global carbon budget and climate change. When these coastal ecosystems are drained or disturbed – such as for building development or agriculture – they release plumes of carbon dioxide back into the atmosphere, contributing to climate change. Globally, around 50% of blue carbon ecosystems have been lost since preindustrial times.

Conversely, reestablishing and restoring these ecosystems can be a very cost-effective way to boost natural carbon capture to curb climate change. Protecting existing blue carbon habitats, and restoring degraded former blue carbon habitat, is increasingly prioritised as a nature-based strategy to combat climate change. Australia is emerging as a leader in this field.

Protecting and expanding mangrove, wetland and seagrass coastal habitat has many potential benefits beyond carbon capture, if implemented appropriately. For example, mangroves can offer coastal protection against erosion, sea level rise, and flooding and other damage related to storm surge. They can improve water quality, support biodiversity, and provide nursery habitat for many aquatic species, including the young of commercially important fish, boosting commercial fishery productivity.

Restoring tidal wetlands previously drained for agriculture can rehabilitate degraded and acidified low productivity farmland into high value functioning natural habitat. This restoration work can help with improved water quality within the catchment, protection from sea level risk and storm surges, and re-establishment of a productive and ecologically diverse wetland ecosystem.

Restoration work that is Indigenous-led can also have cultural and wellbeing benefits for mob as well as providing employment opportunities in caring for Country.

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.

Indigenous involvement is an important component of effective and equitable blue carbon development. Indigenous-led projects can deliver significant benefits, including: employment and skills development, strengthening cultural practices and knowledge systems, improved wellbeing and connection to Country and long‑term stewardship of ecosystems

Best practice goes beyond participation to support Indigenous leadership and co‑design, ensuring projects align with community priorities.

Restoration work that is Indigenous-led can also have cultural and wellbeing benefits for mob as well as providing employment opportunities in caring for Country.

Research into coastal habitat restoration efforts has identified several key factors for success.

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.

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

The rising temperatures of a changing climate can also impact seagrass habitat.

Seagrass loss has been primarily due to stressors such as poor water quality and agricultural run-off: rather than direct clearing for land use change that has typically affected mangrove and tidal wetland habitat.

Successful restoration therefore depends on:

• addressing underlying stressors before intervention
• stabilising sediments (e.g. using biodegradable materials)
• applying lessons from emerging successful trials

Although historically difficult, an increasing number of successful trials around Australia and New Zealand have explored interventions such as biodegradable hessian or jute to stabilise the seafloor around replanted seagrasses to help the ecosystem to reestablish.

These successes show promise for large scale seagrass habitat restoration in the future.

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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, resulting in 'coastal squeeze'.

This limits restoration potential and must be considered in planning.

Restoration outcomes can vary depending on site conditions, ecological responses, and climate impacts. This creates uncertainty for investors and project developers, highlighting the need for adaptive management and ongoing monitoring.

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

Success depends on integrated approaches that combine improved understanding, engagement and governance, specifically:

• strong scientific understanding
• supportive policy and market frameworks
• clear governance and land tenure arrangements
• meaningful, long‑term partnerships with Indigenous communities.