Carbon Markets

UPDATE: Prices stabilise after downturn, is Generic / HIR convergence here to stay?

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Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and international carbon markets for the period 2-5 April 2024.

March recorded a monthly high for spot volumes in 2024, with over 2,100,000 units trading, a 14-month high dating back to January 2023. Following a strong downturn in pricing, last week saw prices stabilise, with Generic and HIR prices broadly trading together as the market found a new level between $33.50-34.00. HIR closed the week 0.15 below Generics, as markets tightened across the week. As we flagged in our recent supply outlook, as the supply of low-cost avoidance credits (currently making up the Generic basket) are exhausted by least-cost demand, HIR is the next cab off the rank in terms of the most liquid, low-cost product available. This suggests that while negative media kickstarted the recent downturn, the convergence in pricing may not be a temporary blip. Despite the recent downturn for HIR and Generic prices in the brokered market, developers of more illiquid / premium products remain undeterred, with many sellers favouring long-term offtake agreements.

RepuTex’s Carbon Weekly report analyses recent activity in the Australian and international voluntary carbon markets, including our ACCU spot price assessment by method, spreads, forward activity, traded volumes, and key market developments. Analysis considers the Australian market along with international registries including Verra, Gold Standard, the American Carbon Registry, and the Climate Action Reserve.

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