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ACCU Market Monthly Report - June 2024

ACCU Market Monthly Report - June 2024

This report provides an overview of the month’s Australian Carbon Credit Unit (ACCU) market activity along with key developments and milestones.

ACCU Market Monthly Report - June 2024

Introduction

This report provides an overview of the month’s Australian Carbon Credit Unit (ACCU) market activity along with key developments and milestones.

Please note: This report provides an overview of the key developments in the Australian carbon market. Our in-market team produces daily and detailed updates and trade reports to CORE Markets software subscribers and clients. Contact us to find out more.

ACCU market overview for June '24

ACCU market highlights

  • The ACCU market continues to trade relatively range-bound, but ultimately prices saw a steady climb. Generic spot ACCUs opened at $33.00 and closed at $34.25, whilst Human Induced Regeneration (HIR) spot ACCUs started June at $33.85 and closed at $34.50.
  • Trading volumes in June remained similar to volumes reported in May, with 2.144 million units traded compared to May’s 2.191 million. Generic ACCUs accounted for much of the market, whilst HIR ACCUs only represented around 15.8% of the reported market, a 42% decrease from May.
  • The spot HIR and Generic spread tightened in June to $0.25, compared to May’s $0.75 premium. The spread widened to $0.45 mid-June, where spot HIR reached its monthly peak of $34.95, and spot Generic price traded at $34.50 on the 18th of June.

    The HIR/Generic premium then converged towards the end of the month to $0.25, potentially as a result of low liquidity on the HIRs compared to increased interest in NO AD (No Avoided Deforestation) specific certificates, with 67.7% of Generic ACCUs purchased in June containing the NO AD tag.
  • Steadier price movements and trading volumes over the last month may be a result of uncertainty from awaited developments across multiple methodologies. Furthermore, inventory levels possibly influenced demand in the market, with some entities having acquired sufficient ACCUs to meet obligations for upcoming year.
  • Interest in derivatives have continued in June, with 400k ACCU options having traded. The continued trading of more sophisticated products this year represents an increasing market maturity and an indication of long-term trading engagement by larger entities and financial institutions.
  • June saw further discussions and observations regarding Carbon Abatement Contract (CAC) exits in the Australian market. There have been expectations in some quarters that prices may have softened due to the exit window, but so far this does not appear to be the case. Participants are still closely observing the impact of increased volume from exited CACs.
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

ACCU price

  • Generic spot ACCUs opened at $33.00 on 3rd of June, a slight decline from May’s closing level of $33.25. Price level remained steady until briefly trading up to $33.25 on the 7th. Generic spot ACCUs then dropped to June’s monthly low of $32.75 on the 11th. From here however, prices saw a steady increase to the monthly peak of $34.60 on June of 18th, but after a quick drop to $34.25 prices remained steady and closed out June at this level. This represents an almost 3.8% increase from the start of the month.
  • Human-Induced Regeneration (HIR) spot ACCUs opened at $33.85 on 6th of June, a decrease from May’s closing level of $34.00. HIR spots then traded up to 34.00 on the 7th of June, a price that held until the 13th when it  climbed to $34.25. The HIR spot price reached its monthly peak of $34.95 on the 18th, before settling into the $34.50 level where June closed.

    At the month’s close, the Generic/HIR premium decreased to $0.25, a drop from last month’s $0.75 spread.
  • Other ACCU methodologies traded in June, including a Savanna Fire Management spot trade in 70k at $34.50, as well as Savanna Fire Management with Indigenous co-benefits spot trade in 32k at $50.00.
  • ACCU derivates also traded in June, including a Feb25 $29 ACCU Put option in 150k priced at $1.35 on 6th June; Dec24 $37 ACCU Call in 50k at 1.65 on 12th June; and a Sep24 $36.50 ACCU Call in 50k at $1.10 on 25th June.

ACCU volumes traded

  • In June, 2.144 million ACCUs traded in the reported market, representing an only slight 2.15% decrease from May’s 2.191 million units. Generic ACCUs made up 79.5% of the reported ACCU market, with a total of 1.704 million units traded. Of these, 1.154 million (67.7%) had the ’No Avoided Deforestation’ (NO AD) tag.
  • HIR ACCUs accounted for 338k of reported ACCU trades, representing around 15.8% of the ACCU market in June. This is an almost 42% decrease from May.
  • Peak trading volumes were seen on the 18th of June, with a total of 626k ACCUs having been reported. The most significant of these being various spot parcels in 50k trading at $34.50 and $34.60, but also a spot ACCU Generic/HIR swap in 50k at $0.35.
  • ACCU derivatives traded in June, with the most significant of these being a Feb25 $29 ACCU Put option in 150k priced at $1.35 on 6th of June, and a Dec24 $37 Call option in 50k at $2 on the 18th. ACCU forwards also traded in June, including a Dec24 ACCU forward at $35.00 in 35k on 14th of June, and a Dec24 NO AD forward at $35.25 in 35k on the 18th.
Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast

ACCU supply, issuance & project registration

  • In June, an estimated 1,537,091 ACCUs were issued, a 22.3% increase from May, where around 1,256,253 ACCUs were issued. The Clean Energy Regulator (CER) estimates around 20 million ACCUs to be issued in 2024, compared to 17.2 million issued the previous year.
  • Significant issuances were observed in June. For example, 257,000 ACCUs were allocated to 18 landfill gas projects owned by LMS Energy. Among these projects, the Hallam project in Victoria received over 71,000 units, while two projects owned by landfill gas operator LGI in the ACT and Queensland were issued around 60,000 ACCUs each.
  • Additionally, Emissions Abatement Solution’s Gindalbie Human-Induced Regeneration (HIR) project in Western Australia received a substantial sum of ACCUs, totalling 81,415 units. Another notable project was Weemabah’s Moombidary HIR project in Queensland, which received around 61,500 ACCUs. This project has been ongoing since 2015 and has delivered approximately 829,000 units so far.
  • Furthermore, three projects owned by Corporate Carbon and its subsidiaries were issued just under 60,000 ACCUs, and 13 projects were registered to begin generating ACCUs, including four soil carbon projects owned by AgriProve Solutions. Mitsui, a Japanese company, registered the second phase of its Western Treefarm plantation forestry project near Bunbury, Western Australia. This registration followed the initial phase near Collie in 2022, which had not yet been issued any ACCUs. Mitsui Bussan Woodchip Oceania, the subsidiary responsible for these projects, has a total of five projects registered under the ACCU Scheme, all located in Western Australia.

Stay up-to-date with ACCU market developments

  • Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast.
  • Talk to us about your market approach and how CORE Markets can support your strategic and transactional needs across ACCU market, environmental market and clean energy markets.
  • Request a demo of our carbon markets analytics platform, which includes ACCU market data across major methodologies, including forward price curves.
  • Track the Generic ACCU price, it’s updated on our website each day.
  • Sign-up to receive our regular carbon and clean energy insights – including this ACCU Market Monthly Report – directly in your inbox. Simply click the ‘Subscribe now’ button on the bottom of this page.

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