Carbon Markets

UPDATE: Carbon Offset Market Report – Incentive for ERF exit weakens as ACCU market softens, issuance closes in on 110 million

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The local carbon market briefly awoke from its recent slumber over the last week, with prices declining on low traded volumes, while one forward transaction was recorded. At current low prices, it remains to be seen how many developers will be incentivised to exit their existing ERF contracts, particularly where proponents face more complex ‘benefit sharing’ consultations. Growing complexity, cost, and delays in applying to exit the ERF (and low prices) may therefore incentivise some proponents to deliver against their existing ERF contracts – or simply trigger their non-delivery clauses – an ironic twist which highlights the inefficiency of new ‘ERF exit’ rules. Local ACCU issuance continues to build, closing in on 110 million, while voluntary cancellations have jumped in April. Internationally, voluntary offset prices have grown over the week, with the largest gains for higher quality nature-based sequestration activities, driven by a strong increase in corporate demand.

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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