Carbon Markets

UPDATE: Carbon Offset Market Report – ERF price rises as ACCU market reaches election crossroads

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The Clean Energy Regulator has announced the results of the 14th ERF auction, with 7.6 million ACCUs contracted at an average price of $17.35/t, a 2.5% increase on Auction 13. Contracted volumes again failed to exceed 10 million, with the Regulator continuing to use its discretion to limit larger price increases, ultimately restricting the underwriting of higher value projects. The ACCU spot price fell 1.6% on the week with traded volumes increasing, yet market action remains slow after a heated February and March. While much of the downside risk appears to be priced into the ACCU market following the recent changes to the ERF, the 2022 federal election is likely to again impact prices. All eyes are therefore on May 21 as proponents begin to form a view of market development, and how prospects for more robust compliance demand under the ALP’s re-worked Safeguard Mechanism may impact market fundamentals.

This report analyses current activity in the Australian and international voluntary carbon markets, including spot and forward price dynamics, offset issuance and voluntary cancellations. Analysis considers Australian Carbon Credit Units (ACCUs) and voluntary offsets across key international registries including Verra, Gold Standard, the American Carbon Registry, and the Climate Action Reserve.

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