ACCU Market Monthly Report - July 2024

ACCU market overview for July 2024

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ACCU market highlights

• Generic spot ACCUs remained range-bound in July, with the monthly high and low slightly up from June. The market opened at $33.75 and closed at $34.50 for Generic units, while Human Induced Regeneration (HIR) spot ACCUs also opened with a trade on the 4th at $33.75 and closed at $34.50.
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• Trade volumes in July were substantially lower than previous month's, totaling 1.2m units traded compared to 2.144m in June. Generic ACCUs accounted for three-quarters of total trade, as 200k HIR ACCUs were exchanged in the same period, comprising 16.7% of the market (up 5.5% from June).  
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• With respect to HIR premium over Generic spots, the spread sat at $33.75 and $33.50 respectively ($0.25), reaching its peak of $0.50 on July 18th ($34.75 vs $34.25). It then narrowed to $0.30 on the 25th, before Generic spots reached parity on the 30th, where prices remained tied for the rest of the month.
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• While the market did see some volatility across the month, it was within a reasonably narrow band. This happened despite ongoing discourse about the potential ACCU volume that could come to market via the 18-month long Carbon Abatement Contract (CAC) exit window. In July, the CER issued 1.074m ACCUs, down a third from June (1.54m).
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• Trading of derivatives saw a sharp decrease in July, limited to one trade of 50k at $30.00 on the 1st. This is a departure from recent trends, with growing interest in more sophisticated products resulting in substantial volumes traded across April, May and June (350k, 499k, and 400k respectively).
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Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast

ACCU method-specific price movements and volumes traded

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ACCU price

• Generic spot ACCUs opened at $33.75 with a trade on Monday July 1st, down nearly 1.5% from June’s closing price of $34.25. What then followed was period of some volatility within the range, as the market then fell to what would prove to be the monthly low of $33.00, before rebounding to $34.40 the next day, and reaching the monthly high of $34.75 on the 8th. Prices then proceeded to declined steadily until July 22nd, landing at $34.00. Minor fluctuations followed on July 30th, dropping to $33.80, before an increase to $34.50, rounding out the month at the last traded price of $34.25. This is an increase just shy of 1.5% from July’s opening.
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• Human-Induced Regeneration (HIR) spot ACCUs opened at $33.75 on July 4th, a decrease of 2.2% from June’s closing level of $34.50. On July 10th, prices returned to $34.50 before another increase took spot HIRs to their monthly high of $34.75. Prices broadly held at this level until the 18th of July. The next trade of spot HIRs took place on July 25th, priced at $34.10, before increasing to $34.25 on July 30th, with both HIR and Generic spots increasing to $34.50 on the 31st to close the month.
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• The spot HIR premium over Generic spots reached its peak of $0.50 on July 18th ($34.75 vs $34.25). The difference then narrowed to $0.30 on July 25th, before reaching parity on the 30th, where it ended the month.
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• Other ACCU methodologies traded in July, including an Environmental Plantings spot trade of 11,500 units at $49.00 on July 2nd, and a Savanna Fire Management spot trade in 15k at $35.00 on the 15th.
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• Interestingly the ACCU market maintained its recent range despite ongoing discussions about potential carbon abatement contract (CAC) volume that could potentially come to market following the opening of the 18-month exit window from 1st July 2023 to 31st Dec 2024. The Clean Energy Regulator suggested up to 15m ACCUs would be eligible for CAC exists during this window, while suggesting 9-15m of these could make their way to market.

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ACCU volumes traded

• In July, 1.2 million ACCUs traded in the reported market, representing a substantial decrease of 44% from June’s figure of 2.144 million. Generic ACCUs made up 76% of the reported ACCU market, with a total of 913k units traded. Of these, nearly 59% (538k) were tagged ‘No Avoided Deforestation’ (NO AD).
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• HIR ACCUs accounted for 200k of reported ACCU trades, representing 16.7% of the ACCU market in July. This is an increase of 5.5% from June.
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• Peak trading volumes were seen on the 11th of July, with a total of 220k ACCUs reported. The most significant of these were a trade of 50k Generic spots (NO AD) at $34.75, followed by a 35k parcel of Generic spots at $34.25. July 30th saw the month’s largest trade, a 70k Generic spot at $33.80.
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• ACCU swaps also traded in July, the most significant being a 50k HIR/NO AD parcel at $0.30 on July 11th.
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• In terms of forward market activity, a Dec24 NO AD forward was reported on the 11th in 25k at $35.00.
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• ACCU derivates traded less frequently than in June, with one Feb25 expiry $30 Put option in 50k agreed at $1.00 on July 1st.

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Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast

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ACCU supply, issuance & project registration

• In July, 1,074,530 ACCUs were issued, a decrease of 35.6% on June’s total issuance, where approximately 1.54m ACCUs were minted. The Clean Energy Regulator (CER) aims to issue at least 20m ACCUs this year, compared to 17.2m in 2023. At month’s end, the CER had issued approximately 8.68m units, about 43% of its expected yearly issuances.
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• 40% of July’s total issuances were allotted to three projects. The Moquilambo Avoided Deforestation Project was the beneficiary of the largest individual allocation, earning approximately 75k ACCUs. It has been issued more than 1 million ACCUs since its registration in 2015.
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• Another significant allocation was Shell’s Out Performers Energy Efficiency project, awarded 62k ACCUs. Shell has earned 105k ACCUs from the project since its inception in 2019. The Wanjina-Wunggurr (Native Title) Aboriginal Corporation RNTBC also earned over 60k ACCUs for a Savanna Fire Management project in W.A. The project has earned the Corporation 283k ACCUs since its creation in 2014.
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• July also saw new projects added to the CER’s registry. Five new projects — three Soil Carbon schemes, and two vegetation initiatives (Plantation Forestry) — will now be eligible to receive ACCUs.

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