As the design of the National Energy Guarantee (NEG) passes another milestone, and the seventh Emissions Reduction Fund (ERF) auction draws closer, in this update we take a closer look at current and forecast price for carbon offsets in the Australian market.
Following the conclusion of the Carbon Price Mechanism, the ERF has formed the primary market for Australian Carbon Credit Units (ACCUs), with the Clean Energy Regulator entering into contracts to purchase offsets from developers active in the land-use and industrial sectors.
More recently, activity in the secondary spot market has developed, underpinned by large emitters offsetting emissions over their facility baselines established by the safeguard mechanism.
Combined with the upcoming federal election, and the expectation that all sectors will ultimately be required to contribute to Australia’s national target, this has led to increased interest in short and long-term ACCU prices.
So what is the Australian carbon price?
