When Australia's Minister for Energy and Emissions Reductions Angus Taylor arrives in Madrid, he will be paying close attention to debate around "carry-over credits".

Key points: Australia must reduce its emissions under the Paris Agreement by 452 million tonnes and wants to use credits for 411 million tonnes of that goal

Australia must reduce its emissions under the Paris Agreement by 452 million tonnes and wants to use credits for 411 million tonnes of that goal Under the Kyoto Protocol, Australia was one of only a few nations allowed to increase its emissions

Under the Kyoto Protocol, Australia was one of only a few nations allowed to increase its emissions Australia claims it should be credited for not reaching its ceiling for extra emissions, and use those credits to not have to reduce emissions by as much in the Paris Agreement

He is in Spain for COP25 — the 25th meeting of the Conference of the Parties to the United Nations Convention on Climate Change.

The world is there to nut-out the rules for implementing the historic Paris Agreement, which aims to stop global warming at well below 2 degrees Celsius.

Among those rules to be worked out, is whether or not Australia will be allowed to use "carry-over credits" to meet its pledged emissions reductions.

They are credits claimed by Australia for having come in under earlier emissions targets.

On the weekend, the Government released its emissions projections.

They showed that in order to meet our promised target of 26 per cent below 2005 levels by 2030, Australia is relying on a large number of these credits — 411 million tonnes to be precise.

Our actual emissions over the period to 2030 are set to drop by only 16 per cent below 2005 levels.

So what are these "carry-over credits" that are supposed to get us the rest of the way?

Back in 1997, Australia signed the Kyoto Protocol. As part of that, we were one of only a small number of developed countries allowed to increase our emissions.

We set a target to limit increases to 8 per cent above 1990 levels throughout the period 2008-2012.

That was incredibly easy to achieve. By not doing much — mostly by limiting land clearing in Queensland — Australia never got close to that ceiling.

As a result, the Government claims to have saved up 128 million tonnes of credits.

In the next period, Australia agreed to an emissions budget, which was equivalent to dropping emissions to 5 per cent below 2000 levels by 2020.

Again, that was a very conservative target. And again, Australia is going to beat that.

We will beat it by so much that Australia claims to have banked another 283 million tonnes in credits.

Where does that leave us?

Our next period is 2020 to 2030. Under the Paris Agreement we've promised to cut our emissions to 26 per cent below 2005 levels.

That amounts to a reduction of 452 million tonnes over the period — 411 million tonnes of which are going to be made up of credits.

Critics argue this goes against the point of the Paris Agreement.

Using those credits doesn't change the actual emissions emitted by Australia and doesn't help the world get closer to net zero emissions in the second half of the century, which was agreed to at Paris.

Others, like the Climate Council, argue it's a very creative form of accounting.

For one thing, the Paris Agreement period is not under the Kyoto Protocol, so it's not clear why credits from Kyoto would count towards Paris.

What's more, if the 2020-2030 period were under the Kyoto Protocol, a third of the credits wouldn't be usable since Kyoto only allowed credits to be carried forward one period, not two.

But last weekend, it was revealed there was a chance the use of those credits would be banned.

An option, currently on a draft agenda for debate at the meeting, is a rule that will completely ban the use of such credits.

If that happens, Australia would need to actually lower its emissions to meet the target.

Before the debate, it's likely other options will be put on the table for discussion, and that option could be removed.

It's possible that all credits, or those from the second Kyoto period, could be allowed.

Mr Taylor called the credits an "overachievement".

"I look forward to showcasing Australia's enviable record as a world leader in renewable energy investment, our 411 metric tonnes of CO2 overachievement of our Kyoto 2020 target, and our fully costed plan to meet our Paris commitment," he said in a statement.

Greens MP Adam Bandt called the "carry-over credit" idea "dodgy accounting".

"The rest of the world does not want Australia to use this dodgy accounting trick to meet its already pathetically low targets," he said.

The argument over carryover credits was not resolved before the closing plenary of the conference on Thursday evening local time.

The negotiations are scheduled to continue into Friday and potentially into overtime over the weekend.

But if no decision is made on how to handle the issue at the conference, it could remain unresolved for a year.