RepuTex has today launched an update to its Australian Carbon Credit Unit (ACCU) forward price assessments to extend our daily forward curves to 84-months (7-years) – enhancing transparency with monthly, quarterly and semi-annual granularity – while establishing a standardised approach to estimate costs of carry.
In the fast-growing ACCU market there is a critical need for accurate and reliable forward price assessments. Market participants, including project developers, traders, and financial institutions, rely on forward prices to make informed decisions regarding long-term contracts, investments, and risk management strategies.
Forward curves also provide an independent input to support P&L valuations and (mark-to-market) fair value financial disclosures.
While liquidity continues to build in the over the counter (OTC) ACCU market, a number of challenges continue to impact forward trading, including price variability and sparce contracting over longer tenors. In particular, the lack of a standardised approach to estimate costs of carry has led to inconsistent pricing across the ACCU forward market, contributing to low liquidity.
This reflects a need for more consistent benchmarks to price forward deliveries, helping participants to better manage price risk and mark the value of their positions, while providing improved pricing transparency and certainty in long-term pricing.
Inefficiencies continue
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