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

While recent growth in the price of ACCUs has been strong, increasing 21% year-to-date to $20/t, local prices remain well below international levels, such as European Union Allowances (EUAs) in the EU ETS, where prices have grown 65% year to date to €54 (A$85), or over 240% from a low of €15.71 in Mar-20.

One of the key drivers of record EUA prices is the increasing role of investors, with speculative (long) positions in the EU ETS growing from 7% in Jan-18 to 33% in May-21, while long positions in the California ETS have similarly grown from 12-27% YTD.

While