Carbon Markets

UPDATE: ERF Auction 14 results and issuance update

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

The Clean Energy Regulator has released the contracting details 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. 25 carbon abatement contracts (CACs) were awarded to revegetation, soil carbon, industrial efficiency, and landfill waste gas projects, valued at $131 million. AI Carbon again dominated the latest auction, receiving 11 CACs for delivery of over 4.7 million ACCUs, or 62% of contracted ACCUs. Other notable projects include Orica’s Yarwun Nitrates Decarbonisation Project near Gladstone.

Few ACCUs issued under optional delivery CACs are expected to be delivered to the Commonwealth, with most ACCUs likely to be withheld and sold to private buyers in the voluntary market, provided that the prevailing market price remains higher than the price of optional delivery ACCUs contracted

As noted in our earlier update, 76% of the volume offered at Auction 14 was accepted, indicating that the Regulator continues to use its discretion to limit larger price increases under the scheme. By limiting CACs to well below private market prices, the Regulator therefore continues to restrict the underwriting of higher-value abatement projects. Instead, by selecting the lowest bids, the Regulator continues to entrench a systematic skew toward lower-quality projects that are more likely to represent non-additional abatement.

Restricted Access

This is a subscriber report. Please login to access this content.

Become a Carbon Insider today

Unlock our latest analysis, briefings and price information with our new Carbon Insider service.

Click below to see our plans.

Sign up for regular insights

LATEST UPDATES

  • Carbon Markets

    INSIGHTS: Election 2022 – Market impacts, and where to next for the ALP’s “Safeguard Mechanism 2.0”?

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Federal Election has been run and won, with the Australian Labor Party (ALP) confident […]

    Research Insights | May 24th, 2022
  • Carbon Markets

    UPDATE: Carbon Offset Market Report – ACCU spot and forward prices trade higher, premium units trade in volume

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Australian carbon offset market sprung back to life last week, with renewed demand from […]

    Research Insights | May 13th, 2022
  • Carbon Markets

    UPDATE: Election scenarios – Possible outcomes and implications for ACCU prices

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    With just two weeks to run until the Australian federal election, the 47th Parliament is […]

    Research Insights | May 10th, 2022
  • Carbon Markets

    UPDATE: Options market comes to life as buyers hedge against price increases

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The options and futures market for Australian Carbon Credit Units (ACCUs) came to life late […]

    Research Insights | May 9th, 2022
  • Carbon Markets

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

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The local carbon market briefly awoke from its recent slumber over the last week, with […]

    Research Insights | May 5th, 2022
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone