RECORDING: Could the Australian carbon offset price eventually “do a Europe”?

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.

Comparably, Australian investors are just starting to pay attention to carbon units as a low-carbon asset play, or as a fundamental hedge against climate risks in other asset classes. As uptake develops to similar levels seen in international markets, investor participation is likely to strongly shape ACCU offset prices over the decade.

In this event,