OUTLOOK: Long-term carbon price, supply and demand outlook (Q4 FY19-20)

As the federal government considers major changes to its climate policy framework, including crediting Safeguard Mechanism facilities for emissions below their baselines and a long-term emissions target ahead of COP 26, the long-run price of Australian Carbon Credit Unit (ACCU) offsets remains a key signal for investment in large-scale emissions abatement, and a benchmark for price formation of potential new Safeguard Mechanism Credits (SMCs).

In particular, the Paris Agreement is a key driver of our long-term offset price expectations, with the long-run price underpinned by the cost and availability of external offsets to meet a 1.5-2°C carbon budget between 2015-50.