The price of Australian Carbon Credit Units (ACCUs) is projected to surge by 75% to AUD 70 per tonne of CO2 equivalent by 2025, according to a report by Australian bank ANZ. The increase is attributed to rising demand from big emitters under Australia’s Safeguard Mechanism and reduced issuance of credits.
Aerial view of the Daintree Rainforest and the Great Barrier Reef, where the rainforest meets the reef, creating a rare natural environment where two UNESCO World Heritage Sites coexist. AI generated picture.
ANZ also raised its short-term price target for ACCUs to $29 (AUD 45) from $26 (AUD 40), forecasting a 63% increase to $42 (AUD 65) by mid-2025. The report highlights compliance-driven demand as the key driver, particularly from entities mandated to meet emissions reduction targets.
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Recent data shows Generic ACCU prices at $26.5 (AUD 41), slightly below the year-to-date high of $27.6 (AUD 42.60) recorded in November. However, supply constraints loom large. Issuance by the Clean Energy Regulator totalled only 14 million tonnes in the first three quarters of 2024, suggesting a shortfall compared to last year’s total of 17.2 million tonnes.
The report also noted that while policy uncertainty ahead of Australia’s 2025 federal election could dampen investor confidence, the expected price surge may counterbalance these concerns. The Coalition, consisting of the Liberal and National Parties, has yet to clarify its stance on the Safeguard Mechanism, drawing criticism for perceived shortcomings in its reforms.
Meanwhile, New Zealand's carbon market is also seeing movement. The price of New Zealand Units (NZUs) hit an eight-month high, trading above $38 (NZD 64) per tonne, amid expectations of tighter supply in 2025. However, uncertainty remains as the government delayed decisions on free allocations for the steel and aluminium sectors until April 2025.
Both markets underline a trend of tightening supply and rising demand, signalling significant shifts in carbon credit markets across the region.
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