The federal government recently delivered on its core election promise to repeal the Carbon Price Mechanism, eventually gaining the support of the Senate crossbench after a turbulent sitting fortnight.
All eyes now turn to the likely ‘replacement policy’ to control domestic emissions growth, with the government beginning to explore a compromise with the Senate in order to pass the first phase of its Direct Action Plan, the Emissions Reduction Fund (ERF).
In our Carbon Market Tracker for July, we analyse short and long term supply of ACCUs under the CFI and Emissions Reduction Fund.
While medium term demand continues to create an uncertain outlook for ACCUs, over the past month there has been an increase in avoided deforestation projects registered, with nine new projects added to the offset registry. Combined with existing projects, this may amount to more than 2 million additional ACCUs from avoided deforestation in FY15. For the first time growth in sequestration projects is expected to outpace the waste management sector, which will add under 1.5 million credits in FY15.
