On Friday, the Clean Energy Regulator opened the fourth pilot window for Fixed Delivery CAC exits. The window includes two key changes to previous iterations: To exit, holders must now deliver at least 20% of their scheduled delivery volume. In addition, the exit window covers scheduled delivery milestones between 1st July 2023 and 31st December 2024, i.e., an 18-month window rather than the previous 6-month windows. With the previous pilot exit window ending 30th June 2023, this effectively ensures continuous exit arrangements.
The new ‘minimum delivery’ rule enables the government to accumulate ACCUs to support the operation of the Safeguard Mechanism’s cost containment measure (CCM). As noted in our earlier update, while the new rule will tighten market balance, we continue to expect CAC deliveries will make up a low proportion of total supply over the decade, larger over the next 3-5 years, tempered by increasing growth in CAC non-delivery rates.
In this briefing, we outline the key changes and scenarios for CAC deliveries, and discuss the impacts on market balance and price development.
