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4. International carbon units and certificates

International carbon unit spot prices fell across the board in the later part of Q1 2022, negating initial gains made throughout January and February. New Zealand units (NZUs) were the only unit to close out the quarter with gains on Q4 2021 prices (see Table 4.1 below).

European Union Allowances (EUA) fell sharply in late February as the distribution of the 2022 free allocation coincided with the Russian invasion of Ukraine sparking fears of an energy crisis. This triggered a sell-off by financial participants who do not have a compliance requirement, seeing prices fall 39% from €95.07 in 12 days, before recovering €18.18 by the end of Q1 2022.

There has been a surge in voluntary cancellation of Certified Emission Reduction (CER) units with 2.6 million units cancelled in Q1 2022, a 65% increase on Q1 2021. This shows an increase in net emissions reduction activity by entities with a preference for low-cost international units. As mentioned in Chapter 1, the Clean Energy Regulator believes there are a range of factors that may shift some CER demand to ACCUs.

Table 4.1: International unit prices
ProductSpot price (31 Dec 2021)Spot price (31 Mar 2022)Quarterly changeSpot price (31 Mar 2022) Australian dollar terms
European Union Allowances (EUA)€80.65€76.48-€4.17 (-5.2%)$115.35
New Zealand Units (NZU)NZ$68.5016
NZ$76.00NZ$7.50 (10.9%)$70.20
Korean Allowance Units (KAU)₩34,000₩22,700-₩11,300 (-33.2%)$24.79

Footnotes

16 Price as at 23 December 2021 as this was the last published price date available in 2021.


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