The first pricing for Safeguard Mechanism Credits (SMCs) has been heard in the Australian carbon market over the course of this week, with several traders commenting on the activity, and a first trade printing on Thursday.
SMCs were first heard bid in the spot market at $24/t on Tuesday, climbing to $28/t and $34/t thereafter, in 25kt. An offer was also heard at $35/t in larger size (100k), a marginal discount to the Generic spot ACCUs and the ASX ACCU March 2025 contract, offered at $35.25/t at the time of writing.
The wide opening bid-ask spread – much wider than the $0.5 – $0.75/t range observed in the Generic ACCU market at close over the week to date – largely reflects the fact-finding mission by opportunistic buyers.
Despite low initial bids, initially equivalent to the soft floor price for CAC exits ($24/t), participants have suggested pricing with low single digit discounts to Generic spot ACCUs is more realistic, with perceived integrity concerns of available units warranting the discount (as discussed in our latest Carbon Weekly report).
Other traders noted some of the impracticalities of trading more novel SMCs, the first units of their kind and first to be issued
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