The Australian Carbon Exchange will operate in a similar way to online stock exchanges, but in the purchase, clearing and settlement of Australian carbon credit units (ACCUs) and potentially other types of carbon units and certificates.

Development of an online carbon exchange will support Australian industry by increasing market transparency including pricing, lowering transaction costs and reducing red tape. It will also accelerate emissions reduction and provide a boost to Australia’s economy.

The exchange 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 (ERF) projects can be traded among individuals and businesses.

The proposed exchange market will make a significant contribution toward the government’s aim in “Streamlining private sector action to support emissions reductions”, a deregulation measure announced in the 2020 Federal Budget. One of these deregulation measures will see the Clean Energy Regulator halving the time taken to develop new ERF methods and reducing the time it takes to assess applications for registering new ERF projects and issuing ACCUs. This will lead to increased and faster supply of ACCUs.

Facilitating a carbon exchange and increasing the supply of ACCUs will support businesses and governments in delivering against their voluntary emission reduction commitments at the lowest possible cost. It is estimated that by 2030, the exchange will save business up to $100 million in transaction costs associated with trading ACCUs.

Its development also responds to a key recommendation in the King Review that promotes initiatives that encourage additional sources of low-cost abatement.

For further information, watch the industry briefing on Expressions of interest for an Australian carbon exchange - YouTube we delivered on Tuesday 11 May 2021.

Status

Find out more about the 3-year development of an Australian Carbon Exchange in the project timeline.

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