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Australia's carbon credit surge: record issuance reaches unprecedented heights

Australia has witnessed a historic surge in the issuance of Australian Carbon Credit Units (ACCU), each representing one tonne of CO2. The latest data from the Clean Energy Regulator (CER) reveals a remarkable increase in ACCUs, with 7 million issued in the July-September period, surpassing the 6.2 million issued from January to June.

Australias carbon credit surge_ record issuance reaches unprecedented heights_A huge tree in Gondwana Rainforests of Australia_visual 1 A huge tree in Gondwana Rainforests of Australia. AI generated image.

This surge is attributed to a 72% rise in credits held by entities under Australia's safeguard mechanism, reaching 5.4 million in September from 3.1 million in July. The Quarterly Carbon Market Report from the CER, released on December 6, suggests that some entities may be strategically accumulating ACCUs in anticipation of future compliance obligations.

Read more: Preserving paradise: Western Australia's pledge to protect native forests

This accumulation has driven total ACCU holdings up by 21%, from 27.6 million on June 30 to 33.5 million on September 30. Despite this, the prices for ACCUs remained relatively stable, trading between $20 to $22 for most of the quarter.

Read more: How are carbon credits issued?

Interestingly, the CER revised down its 2023 ACCU supply forecast from 18 million to 17 million due to extended audit times for gateway audits of human-induced regeneration ACCUs. Generic ACCUs last traded at $21 on December 6.

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