INSIGHTS: What’s the long-term shape of Australia’s carbon market through to 2050?

The government’s 2026–27 review of the Safeguard Mechanism will begin next month, informing how Australia’s carbon market will be aligned to the country’s 2035 emissions target under the Paris Agreement. As the review begins, market participants are increasingly considering a more fundamental question: what will the long-term shape of Australia’s carbon market look like as we move deeper into the post-2030 period?

To provide greater visibility into these dynamics, on Tuesday, RepuTex released its new Long-term Carbon Market Outlook to 2050 (LT CMO), extending our forecast framework over a 25-year horizon to provide a complete view of how Australia’s carbon market may evolve through to 2050.

For the first time, extended analysis enables us to examine what happens next within Australia’s carbon market – including how price formation may evolve as the market moves deeper into the post-2030 period, the key sources ACCU supply, and when we are likely to see large-scale industrial decarbonisation.

Below, we discuss the key themes emerging from our new 2050 price forecast.

1. The Safeguard Mechanism review will recalibrate, not overhaul the market

As a political construct, policy settings have an outsized influence on all emissions markets.

The 2026–27 Safeguard Mechanism review therefore shapes as a