Carbon Markets

Forecast ACCU prices under the Climate Solutions Fund – High road or the low road?

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

In late February the Australian Government announced an additional $2 billion in funding for the Emissions Reduction Fund (ERF), rebranding the scheme the Climate Solutions Fund (CSF).

The additional funding tranche for the ERF could provide $200 million over 10 years, bringing total investment to $4.55 billion (bn) since the commencement of the scheme. Funding will be conditional on the return of the Government at the upcoming federal election, with the Australian Labor Party (ALP) proposing to scrap the framework should it form government.

Below we take a closer look at Australian Carbon Credit Unit (ACCU) pricing dynamics under ERF I, and model possible pathways for price formation under the CSF (ERF II). Specifically, we look at the role of the Clean Energy Regulator in collapsing the current ERF market, and simulate future ACCU price dynamics should the scheme’s benchmark (or celling) price be more efficiently deployed to unlock higher cost abatement projects.

Restricted Access

This is a subscriber report. Please login to access this content.

Become a Carbon Insider today

Unlock our latest analysis, briefings and price information with our new Carbon Insider service.

Click below to see our plans.

Sign up for regular insights

LATEST UPDATES

  • Carbon Markets

    INSIGHTS: Election 2022 – Market impacts, and where to next for the ALP’s “Safeguard Mechanism 2.0”?

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Federal Election has been run and won, with the Australian Labor Party (ALP) confident […]

    Research Insights | May 24th, 2022
  • Carbon Markets

    UPDATE: Carbon Offset Market Report – ACCU spot and forward prices trade higher, premium units trade in volume

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Australian carbon offset market sprung back to life last week, with renewed demand from […]

    Research Insights | May 13th, 2022
  • Carbon Markets

    UPDATE: Election scenarios – Possible outcomes and implications for ACCU prices

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    With just two weeks to run until the Australian federal election, the 47th Parliament is […]

    Research Insights | May 10th, 2022
  • Carbon Markets

    UPDATE: Options market comes to life as buyers hedge against price increases

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The options and futures market for Australian Carbon Credit Units (ACCUs) came to life late […]

    Research Insights | May 9th, 2022
  • Carbon Markets

    UPDATE: Carbon Offset Market Report – Incentive for ERF exit weakens as ACCU market softens, issuance closes in on 110 million

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The local carbon market briefly awoke from its recent slumber over the last week, with […]

    Research Insights | May 5th, 2022
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone