Australian Carbon Credit Exchange

The Australian carbon credit exchange units price continues to strengthen, boosted by an expected increase in demand for credits as companies work out their options for meeting emissions targets. As more companies commit to ‘net zero’ targets, the change in American leadership renews hope for the Paris Agreement, and climate action moves back to the forefront of the public psyche, carbon offsets are predicted to go from strength to strength.

The carbon credit exchange also announced plans to establish a new unit registry, providing for a more streamlined and standardised process that could help improve market liquidity and transparency. The registry could ultimately support the emergence of futures markets for ACCUs and other carbon market units such as Standardised Measurement Certificates (SMC).

In the short term, it seems likely that demand for ACCUs will be driven by compliance purchasing from larger emitters. These entities will either reduce their emissions at the point of generation or buy ACCUs to meet their compliance obligation. The former option will typically result in a lower cost than the latter. The CER is expected to release a Q1 2023 report that will provide more detail on the factors driving the increase in compliance purchasing.

The Australian Carbon Credit Exchange Units Price Continues to Strengthen

Meanwhile, other sources of demand for ACCUs are expected to remain relatively strong, including international voluntary market demand, Commonwealth purchase and potentially Safeguard mechanism demand. The CER is continuing to review potential options to protect local industry against lower cost imports of carbon emission reductions, such as a carbon tariff.

Australian carbon credits are a way for big emitters to offset the carbon dioxide they produce in their operations. The government sets a floor price – a set number of units per tonne of CO2 equivalent emissions – and businesses can purchase these credits on the open or spot market to offset their own emissions.

A carbon credit is a recognised reduction in greenhouse gas levels resulting from a project that has been independently verified and registered with the Clean Energy Regulator. These projects must have a net positive impact on the environment, and must demonstrate additional social, economic, and indigenous benefits.

For more information on how to apply for Australian carbon credits, visit the Emissions Reduction Fund project register. Once approved, you can sell your credits through the Emissions Reduction Fund, with proceeds used to plant trees in the Yarra Yarra Biodiversity Corridor. You can also find accredited carbon brokers to source and purchase your credited carbon.

The ACCU market is a dynamic space, with new supply sources and buyers entering the market regularly. For example, the Emissions Reduction Fund recently announced a partnership with GreenCollar, a leading carbon management and finance company, to offer project developers the flexibility to exit their fixed delivery contracts early.

This move has opened up a large gap between the fixed delivery contract price and the spot market, meaning that ACCUs can now be bought on the open or spot market for around $12 apiece. This could significantly boost farmers’ revenue from carbon sales.