Carbon

Carbon markets: ACCU prices edge back towards $30 after crash

Eric Barker, 01/08/2023

THE price of Australian Carbon Credit Units has started to recover after last month falling to its lowest price in more than a year.

ACCUs fell to about $23 last month after the Clean Energy Regulator issued more than one million credits to projects that had been on hold while the Federal Government’s Chubb review took place.

According to Jarden, the ACCU market opened this week at $29.25, which is the highest it has been since the price plummeted last month.

Market Advisory Group director Raphael Wood addressed the supply and demand situation for ACCUs at last month’s Nature Based Solutions conference in Brisbane. He said the market was currently in oversupply.

“The market is in large oversupply and there is a lot of downward pressure keeping prices from rising too much,” Mr Wood said.

“It is not like the European market, I would not look at Europe’s $180 and think that is where our price is going. If you look at Europe, it is either National Park or it is prime agricultural land that is subsidised for production and hard to turn it soil carbon or environmental plantings.

“We have a lot of land and we have the ability to produce carbon at lower cost.”

Mr Wood said the relative oversupply was likely to stay around for the next couple of years before demand significantly increases at the end of the decade.

“Our supply is likely to peak in 2027 at 30m ACCUs and there is not a lot of demand for new projects at the moment,” he said.

“The supply looks like it will tail away after 2027 and that is when there will be demand for new projects.”

Mr Wood said by end of the decade as the Federal Government’s updated safeguard mechanism starts squeeze some companies – demand for ACCUs should significantly outweigh supply.

“If the ACCU price reaches $50, Australia can produce about 45m ACCUs per anum and demand will be at 60m.”

 

 

 

 

 

 

 

 

 

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