Carbon Markets

BRIEFING: Potential Impact of Landfill Gas Reform Options on ACCU Supply and Market Dynamics

On 3 May 2024, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) published a Reform Options paper to improve the integrity of landfill gas (LFG) crediting, in response to recommendations made in the 2022 Chubb Review. Specifically, the paper outlines the government’s preferred options to increase the default crediting baseline for all LFG projects from 30% to 36%, increasing 1.9% per annum, with many larger, older projects currently receiving baselines of either 0% or 24%, grandfathered in from former schemes.

In this briefing, we consider the impact of the government’s preferred options to improve the integrity of LFG crediting on forecast ACCU supply, and the broader impacts on the ACCU market.

While higher crediting baselines would slightly decrease LFG issuance, modelling indicates that expected crediting extensions for LFG projects – which we assume will be 5 years – would lead to a material net increase in supply from FY25, the point at which many large, older LFG projects reach the end of their current 12-year crediting periods. This large boost in supply would provide well-timed support to the market – coming at a point when we had previously forecast a tightening in market balance – while counterbalancing recent changes to CAC exits (new 20% minimum delivery rule), and flagged delays to the Integrated Farm and Land Management (IFLM) method.

We therefore expect the government’s preferred LFG reform settings to have a material impact on forecast ACCU issuance from existing and new landfill gas projects, with implications for near-term market dynamics.

This analyst briefing (PDF) “Potential Impact of Landfill Gas Reform Options on ACCU Supply and Market Dynamics” is published under our Carbon Intelligence service.

Click below to access this report.

Restricted Access

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

Tour our EnergyIQ platform

RepuTex research insights and market data is published via our EnergyIQ platform.

Click below to learn more about our services.

Sign up for regular insights

LATEST UPDATES

  • Carbon Markets

    UPDATE: Differentials for premium ACCU methods show greater convergence, yet intra-method spreads remain wide

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

    Our latest Carbon Weekly has now been published, reviewing activity in the Australian and international […]

    Research Insights | July 8th, 2024
  • Carbon Markets

    MARKET WRAP: Total volumes slow as derivatives activity falls from record highs, buyers lead prices higher

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

    Total traded volumes across spot and forward markets fell from 2.8 million to 2.2 million […]

    Briefings, Research Insights | July 6th, 2024
  • Carbon Markets Outlook

    OUTLOOK: Long-term Australian carbon price, supply, and demand outlook (ACCUs and SMCs)

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

    Our latest Carbon Market Outlook (CMO) for the Australian carbon compliance and voluntary markets has […]

  • Carbon Markets

    UPDATE: ACCU prices flatline on limited spot trading, financial year gains muted, but options volumes surge

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

    Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and […]

    Research Insights | July 1st, 2024
  • Carbon Markets

    Notice: Welcome to the new RepuTex EnergyIQ platform / extended ACCU datasets

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

    RepuTex has today published an update to its EnergyIQ platform, including expanded data coverage, visual […]

    Notices, Research Insights | June 28th, 2024
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone