The spot price for Australian carbon credit units (ACCUs) jumped 10.5% on Friday to $28.75/t, a new record high, as the market continues to be buoyed by demand from high emitting companies. RepuTex’s ACCU spot price assessment, which compiles aggregate data from market participants, has now grown 74% calendar year-to-date.
As we have noted in recent updates, strong gains are primarily being driven by larger compliance buyers continuing to accumulate ACCUs to surrender against their multi-year baselines. Increased demand ahead of the Feb-22 compliance deadline under the safeguard mechanism, amid a tight supply setting, has created a bullish environment for spot prices and forward contracting, which we expect to continue.
As noted in our latest Carbon Market Outlook, higher prices have also begun to attract increased interest from investors and speculators. In particular, investor participation is expected to strongly influence price development over the medium-term. As participation grows, potential remains for a positive feedback cycle to take hold in the ACCU market, with increased corporate-led demand for ACCUs triggering higher prices, encouraging the increased participation of investors.
With the current tight supply setting expected to persist, we continue to see further upside in the ACCU spot price, with
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