Carbon Markets

ALERT: Australian carbon price ends 2019 higher as climate policy pressure builds

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

The Australian carbon spot price ended 2019 higher, trading between $17.20-30 in January, just under a 4-year high of $17.50/t recorded in November. The price of Australian Carbon Credit Units (ACCUs) has grown almost 20 per cent from a low of $14.80/t in July 2019, driven by increased demand from state governments and voluntary emissions reductions from large emitting companies.

The prospect of tighter emissions regulation may lead to a more bullish outlook for carbon prices over 2020 as expectations build for a more robust emissions policy framework. While a shift in rhetoric is easier than a shift in policy, the government has enough levers it can pull to curb emissions growth with minimal disruption, particularly via its own safeguard mechanism.

In line with earlier updates, we continue to view emissions from this segment as Australia’s climate Achilles heel, with safeguard covered emissions forecast to surpass electricity as Australia’s largest emitting segment in the early 2020s.

The key issue for policymakers will therefore be the implementation of more robust emissions limits, particularly in the energy, mining and transport sectors, where emissions continue to grow without any hard ceiling or offset mechanism.

Current carbon price represents value 

Recent gains in the Australian carbon price over 2019 (up 12 per cent) have outpaced broader commodity markets, with the Standard & Poor’s Goldman Sachs Commodity Index (S&P GSCI) – comprising 24 commodities from the energy, metals, and agricultural sectors –  returning 7 per cent over 2019.

Restricted Access

Whoops! Access to this post requires a different subscription level.

Tour the EnergyIQ platform

See what you are missing.

Click below to take a tour of our full Energy IQ platform for the Australian carbon and power markets.

Sign up for regular insights

LATEST UPDATES

  • Carbon Markets

    ALERT: Australian CO2 spot price breaks through $19/t to new record high

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

    The price of Australian carbon credit units (ACCUs) continues to break new ground, reaching $19/t […]

    Research Insights | June 10th, 2021
  • Carbon Markets

    RECORDING: Are Australian carbon offset prices already on a net-zero pathway?

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

    In this market update, our Executive Director, Hugh Grossman, discusses recent dynamics in the Australian […]

    Research Insights, Webinars | June 9th, 2021
  • Carbon Markets

    PRICE REPORT: ACCU contracting heats up as local offset prices rise

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

    In Short: The spot price of Australian Carbon Credit Units (ACCUs) grew 0.8% to $18.60/t […]

    Research Insights | June 7th, 2021
  • Electricity

    ‘Tsunami’ of renewables to keep electricity prices low, but headwinds grow for gas

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

    In our latest Australian Electricity Outlook (AEO) for the National Electricity Market (NEM), published on […]

    Research Insights | April 30th, 2021
  • Electricity Outlook

    OUTLOOK: NEM wholesale electricity and LGC price forecast 2021-40

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

    Dear Subscriber, Our latest Australian Electricity Outlook (AEO) for the National Electricity Market (NEM) has […]

    Research Insights | April 29th, 2021
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone