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Australian carbon credit unit supply

20 December 2018

Data on the supply of Australian carbon credit units (ACCUs) indicates the volume of ACCUs likely to come forward to meet the various sources of demand in the market. There are currently three main sources of supply for ACCUs:

  • existing Emissions Reduction Fund projects
  • new and expanded Emissions Reduction Fund projects, and
  • ACCUs held in the Australian National Register of Emissions Units (ANREU).

Registered Emission Reduction Fund projects

Supply from registered projects has increased significantly from 15.4 million total ACCUs issued by the end 2014–15, to 56.8 million ACCUs by 13 December 2018. As shown in the cumulative registered projects graph below, project numbers have also increased significantly from 278 projects at the end of 2014–15, to 772 projects registered as at 13 December 2018.

While vegetation, waste and savanna burning projects continue to make up a large proportion of the project portfolio, projects registered under methods such as energy efficiency, industrial fugitives and agriculture have increased their share in recent years.

Cumulative projects registered by method type (2012–13 to 2018–19)

*2018–19 data is as at 13 December 2018.

The ACCUs issues by method type graph below shows the number of ACCUs issued has been dominated by vegetation, waste and savanna burning projects with ACCUs issued to energy efficiency projects from 2016–17 and industrial fugitives and transport projects from 2018–19.

While total ACCUs issued reduced by one million in 2017–18 (12.2 million) compared to 2016–17 (13.2 million), issuances for 2018–19 are currently tracking 25 per cent higher than 2017–18 with 5.3 million ACCUs already issued compared to 4.2 million at the same time last year.

ACCUs issued by project method type (2012–13 to 2018–19)

*2018–19 project numbers are as at 13 December 2018.

Emissions Reduction Fund projects supply data

ACCU supply data is published each week on the Clean Energy Regulator Emissions Reduction Fund project register, including a description of the project, project location, project method, whether the project is currently contracted, and the number of ACCUs issued to each project.

New and expanded projects

Additional supply of ACCUs may be required from new and/or expanded Emissions Reduction Fund projects to meet future demand. There are currently over 30 Emissions Reduction Fund methods available to register projects under. It is important to note that supply from new projects is constrained by the lead times for new projects to start generating ACCUs (see current lead times graph below). Emissions Reduction Fund projects generally take between one to two years from the time they are registered before they are issued their first ACCU. Once projects are registered, they may then generate ACCUs from 7–25 years, depending on the method. Current average lead times for projects under different methods (from project registration to first ACCU issuance)

ACCUs in the Australian National Register of Emissions Units

The number of ACCUs held in the Australian National Register of Emissions Units (ANREU) indicates the maximum supply potentially available to the market at a point in time. New supply through issuances of ACCUs occur throughout the year as participants submit claims for units for projects, while demand occurs through ACCU deliveries, surrenders, cancellations and relinquishments.

While a surplus of ACCUs may be available in ANREU at any time, it is not a clear indicator of liquidity in the market. It is likely only a proportion of the ACCUs in ANREU may be available to trade on the secondary market, as some may be held or banked for future demand.

The below table shows the net balance of ACCUs in the market at 13 December 2018 and quantifies the aggregate demand from various sources over the period from 2012.

ACCU market balance as at 13 December 2018

ACCUs issued56,782,453
ERF contract deliveries37,683,131
Carbon pricing mechanism surrender14,458,807
Voluntary and state/territory government796,524
Safeguard mechanism surrender448,097
ACCU relinquishments72,672
Balance3,323,222

The below graph shows how the supply of ACCUs has increased to meet increased demand from 2015–16 to 2017–18.

Historical supply and demand balance of ACCUs

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