Carbon markets: trading volumes slow with review uncertainty

Eric Barker, September 16, 2022

city emissions

CARBON trading has slowed in recent weeks as the Federal Government’s review of the carbon farming framework heads into a public submission phase.

The price of Australian Carbon Credit Units (ACCUs) recovered increased slightly this week to $29.50 after a drop last month, which was put down to renewed criticism of the industry.

Market forecasting service Reputex Energy said while prices have seen little movement in recent weeks, volumes traded have been low. The update said it was partially due to traders watching public auctions in New Zealand and uncertainty due to the government’s Chubb review.

The Chubb review is the independent review the Federal Government called after criticism was made about the integrity of certain methods under the Emissions Reduction Fund. Reputex said the future impact of the review on the carbon market was still unknown.

“It remains to be seen how or if forward supply will be constrained, subject to how quickly the market is required to transition to a “high integrity” system,” the report said.

“In parallel, generic volumes comprised over 85pc of the market in the last week as the Safeguard Mechanism reform gathers momentum.”

Some project developers have told AgCarbon Central the Chubb-review has made them apprehensive to jump into new Human Induced Regeneration (HIR) projects – which have commonly been in popular in parts of Western Queensland and New South Wales. To the contrary, government data has shown new projects being registered.

European markets have crashed in recent weeks, with the European Union Allowance (EUA) December 22 contract closing on 13 September €69.75, almost 30pc below the record €98.01 record it set on 19 August.

Analysts and European media are reporting the increased uncertainty from the Russia/Ukraine war has triggered a mass liquidation of credits.

  • Submissions to Chubb review close on September 17 this week. Click here for more information.



Grain Central: Get our free news straight to your inbox – Click here


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Grain Central's news headlines emailed to you -