OUTLOOK: Medium-term Carbon Market Outlook – Technical Report, Mar 2024

Our latest Carbon Market Outlook (CMO) for the Australian carbon compliance and voluntary markets has now been published.

This quarterly CMO presents our expectations for Australian Carbon Credit Unit (ACCU) and Safeguard Mechanism Credit (SMC) prices, along with underlying supply-demand fundamentals over a 10-year horizon.

Analysis presents our Central Case forecast, or in-house view of market development. This is complemented by scenario analysis which considers alternative pathways for market development, along with key economic, market, and policy sensitivities.

Specifically, High/Low scenarios evaluate the pace and scale of decarbonisation by Safeguard Mechanism facilities – the material driver of carbon credit demand and price development, along with sensitivities for forecast supply.

Part one of this CMO summarises our key outcomes. Part two discusses our methodology and modelling approach. Part three presents our medium-term outlook for the Australian market, including compliance demand, other sources of demand, supply, market balance, and forecast market prices (10-yr). Part four discusses alternative scenarios and risks to presented outcomes. An appendix lists more detail about our modelling assumptions and key inputs.

Note: this CMO integrates the outcomes of our latest Carbon Supply Outlook (CSO, February 2024), which provides an in-depth view of our supply assumptions and forecast outcomes.