Almost two-thirds of Australian businesses (65%) expect Australian Carbon Credit Unit prices will be above $90 by 2035, compared to current levels of about $40.50, a new survey by the Carbon Market Institute has found.

The survey asked businesses what actions they are taking in response to climate change, and canvassed their views on climate policy.

Respondents include developers of Australian projects that earn ACCUs from greenhouse gas abatement activities, as well as large emitters, financial institutions, consultants, and carbon market intermediaries.

Although the survey is conducted annually, this year marked the first time that businesses were asked about their ACCU price trend expectations.

“Businesses also highlighted the need for stronger climate legislation and policies,” CMI chief executive John Connor said.

“More than two-thirds (72%) of respondents stated that stronger laws and policies are the most important tool to scale up private investment in climate solutions,” he noted.

Connor noted that there is also strong support for expanding the Safeguard Mechanism so that it covers more facilities that have substantial emissions.

“Currently, it applies to slightly more than 200 facilities that emit at least 100,000 tonnes of greenhouse gas annually,” Connor said.

“However, 70% of respondents favour expanding the reach of the Safeguard policy,” he noted. “In addition, a narrow majority of 55% favour setting more stringent emission decline rates.”

“It is clear that businesses are confident that the Safeguard Mechanism has the capacity to play an important role in reducing national emissions, although they consider that there is room for improvement,” Connor added.

“We hope that all politicians can in turn reassure businesses that they recognise the merits of the scheme and are committed to retaining it.”

Connor added that many businesses are worried about slippage in implementing promised ACCU scheme reforms, with 78% agreeing that implementation delays are affecting investment and confidence in the market.

The recent climate talks in Baku were notable for the widespread recognition that high-integrity international carbon markets have a useful role to play in helping the world respond to climate change, he said.

“The same is true of Australia’s domestic carbon market,” Connor said. “Although several reviews have found that the ACCU scheme to be robust and operating well, it is essential that measures to further boost its integrity are implemented as soon as possible.”

In other findings:

  • More than two-thirds of businesses (69%) favour the introduction of an EU-style carbon levy on emissions-intensive imports at the border, to protect Australian industry.
  • Almost three-quarters of respondents (73%) want Australia to establish decarbonisation agreements with trading partners to facilitate an orderly transition and support the transformation of global supply chains.
  • Almost three-quarters of respondents (74%) favour the introduction of mandatory requirements to report nature dependencies and impacts.
  • A majority (60%) consider that Australia would have a stronger influence on international climate policy if it co-hosted COP31 climate talks in 2026.

The 2024 Australian Business Climate Survey is available here.

 

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