Q2 2023 | Australia’s Carbon Market Consolidates

Authored by Evolution Trustees.

The federal government released its implementation plan for the Independent Review of Australian Carbon Credits (the Chubb review’) in June 2023. The plan sets out the government’s intended timing and approach for each of the 16 Chubb Review recommendations.

The March 2023 Quarterly Carbon Market Report (QCMR) was released by the Clean Energy Regulator (CER) in May. The report projected ACCU supply scarcity as demand increases in response to the safeguard mechanism reforms.

The  Safeguard Mechanism (Crediting) Amendment Act 2023 passed through both houses of Parliament in late March 2023. This introduced tradable, below-baseline Safeguard Mechanism Credits, creating an additional incentive for driving at-source emissions reductions by covered facilities. Further refinements to scheme rules are expected before they take effect on 1 July 2023.

As for Q1 2023, ACCU spot prices have been consistently in the $33.70-$39.70 range through the quarter. The entry of compliance buyers (safeguard mechanism) remains a key force for local market participants to watch.

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