Summary The emergence of carbon markets has provided a potential source of funding for reforestation projects. However, there is concern amongst ecologists that these markets will promote the establishment of monoculture plantations rather than more diverse restoration plantings, on the assumption that fast-growing monocultures are likely to store more carbon than restoration plantings. We examined the validity of this assumption for three predominantly rainforest plantation types established in the moist tropical uplands of northeast Australia: monoculture plantations of native rainforest conifers (n = 5, mean age 13 years); mixed species plantations of rainforest cabinet timber species, rainforest conifers and eucalypts (n = 5, mean age 13 years); and, environmental restoration plantings comprised mostly of a diverse range of rainforest trees (n = 10, mean age 14 years). We found that restoration plantings stored significantly more carbon in above-ground biomass than monoculture plantations of native conifers (on average, 106 t vs 62 t carbon per ha); and tended to store more carbon than mixed species timber plantations which were intermediate in value (86 t carbon per ha). Carbon stocks were higher in restoration plantings than in monoculture and mixed species plantations for three reasons. First, and most importantly, restoration plantings were more densely stocked than monoculture and mixed species plantations. Second, there were more large diameter trees in restoration plantings than monoculture plantations. Third, the trees used in restoration plantings had a higher average wood density than the conifers used in monoculture plantations. While, on average, wood density was higher in mixed species plantations than restoration plantings, the much higher stocking rate of restoration plantings meant they stored more carbon than mixed species plantations. We conclude that restoration plantings in the moist tropics of north-east Australia can accumulate relatively high amounts of carbon within two decades of establishment. Comparison with reference rainforest sites suggests that restoration plantings could maintain their high stocking rates (and therefore high biomass) as they develop in future decades. However, because restoration plantings are currently much more expensive to establish than monoculture plantations, restoration plantings are unlikely to be favoured by carbon markets. Novel reforestation techniques and designs are required if restoration plantings are to both provide habitat for rainforest biota and store carbon in biomass at a cost comparable to monoculture plantations.