OUTLOOK: Long-term Australian carbon price, supply and demand outlook

The price of Australian Carbon Credit Units (ACCUs) has risen 11 per cent calendar year-to-date, reaching a record high of $18.50/t in Feb-Mar on momentum that the federal government will adopt a more ambitious net-zero emissions reduction target ahead of the 26th UN Climate Change Conference (COP) in November.

The recent surge in prices suggests that Australian carbon offsets are undergoing a fundamental repricing as the market begins to account for a more ambitious net-zero emissions goal, despite the absence of a policy announcement from the government.

The adoption of a net-zero target will be broadly supportive for ACCU contract prices, underpinned by increasing demand for offsets from voluntary and compliance market participants. Forward prices are, however, subject to the prioritisation of internal abatement opportunities (emissions reductions) over the sourcing of external abatement (offsets), with potential for lower prices should companies focus on internal emissions reductions to more permanently manage their carbon compliance risks.

In this Market Outlook, we present three scenarios for ACCU contract price development, supply, and demand from 2021-30. Analysis assumes the adoption of a net-zero emissions target implemented for industry via the ‘safeguard mechanism’.

Specifically, emissions baselines for covered facilities are set to decline to FY30, aligning to net-zero emissions in 2050. Companies are assumed to face an annual emissions reduction task, with the prioritisation of internal versus external abatement differing in each scenario, translating into a range of forward price outcomes.

To access this Market Outlook, please login below, or contact a member of our team for more information.

To read a summary article of our modelling outcomes, please click here. 

Restricted Access

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

Not a subscriber?

To learn more about our research services for the Australian energy and emissions markets, click the button below, or email our subscriptions team.

Sign up for regular insights

LATEST UPDATES

  • What impact will a net-zero emissions target have on forecast ACCU prices?

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

    The Australian carbon market is undergoing a “fundamental repricing” on the prospect of a national […]

    Research Insights | April 7th, 2021
  • OUTLOOK: Long-term Australian carbon price, supply and demand outlook

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

    The price of Australian Carbon Credit Units (ACCUs) has risen 11 per cent calendar year-to-date, […]

    Research Insights | April 7th, 2021
  • ALERT: Australian CO2 spot price hits record high of $18.50/t, up 12% YTD

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

    The price of Australian carbon credit units (ACCUs) reached $18.50/t on Monday, a record high, […]

    Research Insights | February 16th, 2021
  • EU levy could impose carbon price of A$65-140 on Australian exports, with more climate tariffs to come

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

    The European Parliament’s environment committee last week endorsed the proposed Carbon Border Adjustment Mechanism (CBAM), […]

    Research Insights | February 10th, 2021
  • Australian carbon offset price climbs past $17/t, a 12-month high: Here’s why

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

    The price of Australian carbon offsets broke through $17 a tonne on Wednesday, reaching a […]

    Research Insights | February 4th, 2021
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone