Voluntary carbon markets are growing rapidly, off a relatively low base, as ambition to offset emissions gains
momentum with corporations, state and territory governments and individuals.
Total Australian unit and certificate cancellations were 2.7 million, up 24% at the end of Q3 compared to 2020. The
ACT government cancellation of 2.2 million LGCs towards its 100% renewable energy target is additional to that
total.
Australian businesses and households are increasingly wanting to procure renewable energy.
In Q3, 1.4 million LGCs were voluntarily cancelled (Figure 4.1). This included GreenPower acquittal of 681,000 LGCs,
representing an increase of 34% from 2020, and the highest volume cancelled against GreenPower since 2017. A new
offering under this program, GreenPower Corporate Direct,
will allow large energy users to have their cancelled LGCs audited by GreenPower and the renewable generator details
published on their website at a reduced cost. The intent is to support the credibility of renewable energy claims by
participants.
By October 2021, voluntary cancellations surpassed the Clean Energy Regulator expectations of 5 million LGCs for 2021
and could exceed 5.5 million LGCs by the end of the year.
Figure 4.1 Voluntary private and state and territory government demand for LGCs
by reason for cancellation, March quarter 2019 to September quarter 2021 (excluding ACT government
cancellations)
Demand for ACCUs as a high integrity carbon offset is also growing with 220,000 ACCUs voluntarily cancelled in Q3
2021, taking total demand for the year to 622,000, up 16% compared to the same period in 2020. If Q4 follows the
seasonal pattern in being the largest quarter for cancellations, total demand for 2021 could exceed expectations of
1 million ACCUs.45
Climate Active accounted for 41% of Q3 cancellations with 90,000 ACCUs (see Figure 4.2) and a total of 338,000 ACCUs
cancelled for 2021, a 6% increase compared to the end of Q3 in 2020.
Figure 4.2 Voluntary private and state and territory government demand for
ACCUs
by reason for cancellation, March quarter 2019 to September quarter 2021
More participants are taking an active role in the voluntary carbon market. A total of 54 entities cancelled ACCUs
during Q3, with 25 entities cancelling ACCUs for the first time. Participants from the finance and utility sector
drove voluntary demand this quarter, accounting for 46% of the cancelled volume. Demand from the finance sector is
likely to grow further with the Commonwealth Bank introducing a new
program which will allow retail customers to view their carbon footprint and offset emissions using ACCUs.
Buyers continued to favour ACCUs from savanna burning and vegetation projects, which accounted for 72% of
cancellations in Q3 (see Figure 4.3). A record number of waste credits (61,000 ACCUs) were also cancelled in the
quarter.
Figure 4.3 Voluntary private and state and territory government demand for ACCUs
by method type, March quarter 2019 to September quarter 2021
Footnotes
45 Q4 2019 and Q4 2020 accounted for 41% and 36% of total voluntary cancellations in
those years.