How transparency can bring growth to the ACCU market
The Australian Carbon Credit Unit (ACCU) scheme is crucial to Australia’s decarbonisation strategy. This article uses insights and data from CORE Markets to explore expected developments in the ACCU market and understand price differentials between ACCU method types.
Demand forecasts indicate that the ACCU market is set to grow significantly over the next decade, peaking in FY31, when compliance demand from entities in the Safeguard Mechanism alone is expected to reach ~ 30 million units.
The new ACCU project transparency requirements proposed by the regulator will enhance public confidence in the scheme and support market growth by breaking down information barriers between buyers and sellers.
Project-specific ratings and risk analytics can be applied in any carbon market, helping cut through the complexity and unlock investment decisions. The new ACCU transparency requirements should provide sufficient technical information to enable ratings agencies to enter the market.
Contents
Introduction
The ACCU scheme is Australia’s national carbon crediting programme
The market has grown considerably in recent years, including through demand from voluntary buyers, and is set to continue expanding
ACCU prices are differentiated at a methodology level
Greater project-level transparency is coming to the ACCU market
All carbon projects, including those within the ACCU market, carry risk which can be assessed and quantified
Geospatial analysis can be applied to assess nature-based ACCU projects
Mapping the ratings distribution for sectors in the VCM to those in the ACCU scheme explores the potential similarities between them
Transparency and independent risk analysis will drive long-term market growth