Yesterday we published our latest Carbon Market Outlook (CMO) for the Australian carbon market, presenting our detailed modelling and expectations for Australian Carbon Credit Unit (ACCU) and Safeguard Mechanism Credit (SMC) prices over a 10-year horizon, along with underlying supply-demand fundamentals.
Notably, our CMO incorporates the impact of new coal mine methane emissions reporting amendments, actioned earlier this year, which we model will trigger a material change in Safeguard Mechanism covered emissions – and SMC issuance – leading to a notable re-balancing of the market, including forecast ACCU/SMC prices.
New coal mine methane reporting will therefore have significant implications that should be deeply evaluated by all participants.
In this article, we take a closer look at the recent amendments, and discuss the implications for Australia’s carbon market.
A recap of the new coal mine methane reporting amendments
Earlier in the year, the federal government announced amendments to NGER scheme legislation to require open-cut mines covered by the Safeguard Mechanism to transition from the reporting of fugitive methane emissions using state-based emissions factors (Method 1) to site-specific sampling and analysis (Method 2).
The amendments focus on areas identified in the Climate Change Authority’s 2023 review of the NGER legislation, specifically in
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