2022 was an eventful year for Australia’s ACCU market. The Clean Energy Regulator’s documentasset:Snapshot of Australia’s ACCU Market 2022 highlights key developments and supply and demand factors affecting the ACCU market.

National carbon markets

The Clean Energy Regulator administers national carbon markets for:

• the Emissions Reduction Fund, which supplies Australian carbon credit units (ACCUs)
  
• the Renewable Energy Target, which creates tradable large-scale generation certificates (LGCs) and small-scale technology certificates (STCs).

Participation in the Emissions Reduction Fund is voluntary and provides incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their emissions. The Clean Energy Regulator is the major purchaser of ACCUs, however there is increasing demand for ACCUs from businesses and other levels of government, with some purchasers seeking ACCUs with co-benefits.

The Clean Energy Regulator is in the process of developing an Australian Carbon Exchange that will make the trading of ACCUs simpler, supporting rapidly increasing demand from the corporate sector. It will help foster the growth in Australia’s vibrant carbon markets, where ACCUs credited from approved Emissions Reduction Fund projects can be traded among individuals and businesses.

The Renewable Energy Target consists of two schemes: the Large-scale Renewable Energy Target (LRET) that provides incentives for large-scale renewable energy power stations and the Small-scale Renewable Energy Scheme (SRES) that creates incentives to install small-scale renewable energy systems. Demand for renewable energy certificates is set in legislation each year. However, there is increasing demand from businesses and other levels of government for LGCs to offset emissions.

State and territory carbon markets

State and territory government schemes include the New South Wales Energy Saving Scheme and Victorian Energy Efficiency Target which incentivise the installation of energy efficient equipment and appliances. These schemes supply tradable certificates with demand set in legislation under the relevant state targets.

International carbon markets

International carbon markets include the Clean Development Mechanism and voluntary emissions reduction standards administered by non-government organisations. Demand for international units and certificates in Australia is primarily driven by voluntary emissions reduction ambition, including businesses certifying their actions against the government-backed Climate Active Carbon Neutral Standard (formerly the National Carbon Offset Standard).

All emissions reduction actions are credited according to approved methodologies and cannot be credited under multiple schemes.

The table below lists the units and certificate credited or eligible in each scheme and provides links to scheme information and the relevant registry: