European Union Allowance (EUA) prices have seen an 11% increase over Q3, reaching a record high of AUD$99. Increased use of coal-fire power due to high global gas prices is resulting in a surge in demand for EUAs, and a further rise in EUA prices.57
New Zealand emission units (NZU) prices rose over 50% to finish the quarter at AUD$61 following the New Zealand government’s decision to increase the cost containment reserve trigger price (essentially a market cap) for New Zealand ETS auctions from NZ$51 to NZ$70 for 2022. The cost containment reserve trigger price will then rise by a minimum of 10% plus inflation per year out to 2026, which could see the price rise to NZ$110 in that period.58
Certified emissions reduction (CER) units cancelled in ANREU in 2021 totalled 8.7 million at the end of Q3, more than double the volume cancelled over the same period in 2020. It will be interesting to see if this trend continues as transparency of units cancelled increases.
Table 4.2 Domestic and international unit and certificate market spot prices ($AUD)
| Product | Spot price AUD (30 June 2021)59 | Spot price AUD (30 September 2021)60 | Quarterly trend61 |
|---|
ACCU | $19.30 | $26.50 | +$7.20 (+37%) |
LGC (tCO2-e)
| $50.57 | $61.44 | +$10.87 (+21%) |
Energy Saving Certificates (ESC, NSW) | $33.40 | $33.75 | +$0.35 (+1%) |
Victorian Energy Efficiency Certificates (VEEC) | $62.60 | $65.00 | +$2.40 (+4%) |
European Union Allowances (EUA) | $89.12 | $99.03 | +$9.91 (+11%) |
New Zealand Carbon Units (NZU) | $40.60 | $61.60 | +$21.0 (+52%) |
Korean Allowance Units (KAU) | $18.41 | $34.70 | +$16.29 (+88%) |
| Prices for Certified Emissions Reduction (CER) units, Verified Carbon Units (VCU) and Verified Emissions Reductions (VER) units are not available through verifiable open sources. However, market sources suggest CERs are trading in the range of at $2 - $3, VCUs at $4 - $5 and VERs at $5 - $8. |
Footnotes
57 Reuters,
Analysts raise EU carbon price forecasts as gas rally drives up coal power, sourced 14 October, 2021
58Annual updates to emission unit limits and price control settings | Ministry for the Environment
59 Prices are converted to Australian dollars and were correct at time of conversion at 30 June 2021. Data sourced from Jarden, TFS Green, ICE, Korea Exchange.
60 Prices are converted to Australian dollars and were correct at time of conversion at 30 September 2021. Data sourced from Jarden, TFS Green, ICE, Korea Exchange.
61 This is the quarterly trend from the end of Quarter 2 2021 to the end of Quarter 3 2021.