This report is produced monthly and provides a high-level overview of the key developments in select compliance and voluntary carbon and biodiversity markets.
In this month's Global Environmental Market Report, we cover key developments in select compliance carbon markets and provide an overview of the month in the voluntary carbon market.
The coverage also includes an update on emerging biodiversity markets.
*Please note: This report is designed to provide a high-level overview of the key developments in compliance and voluntary carbon markets. 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.
This month we cover key developments in the Australian, New Zealand and European compliance carbon markets.
November saw a strong month for ACCU trade volumes, reaching 4.5mln units exchanged, up by over 1mln on October’s total. Spot trading dominated the month, with 1.6mln No Avoided Deforestation (No AD) ACCUs exchanged, up from 600k in October, and Generic spots improving from 285k to 1.15mln. Human Induced Regeneration (HIR) trading volumes remained stable at 521k units. Early November saw sustained buying pressure push No AD (A$42.70) and HIR (A$42.75) to their highest since March 2022, before retreating to $40.55 and $40.65 respectively by month’s end.
Issuance rose sharply with a 117% increase on October’s figure to reach 2.43mln ACCUs created. Landfill Gas projects led the issuance, producing 917k units, while Avoided Deforestation ACCUs rebounded to 340k after a quiet October. HIR projects issued 856k ACCUs, maintaining elevated issuance levels.
The Clean Energy Regulator’s revised issuance forecast of 19mln units for 2024 is now within reach, with annual issuance nearing 16mln. Carbon Abatement Contract exits were unmoved in November, at 3.74mln.
November also brought updates to the Environmental Plantings methodology, aiming to boost accessibility and integrity, while a delay to the Integrated Farm and Land Management methodology raised concerns over the stability of future supply.
For a comprehensive update on the ACCU market, read our monthly ACCU Market Monthly Report
Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast
Login into the CORE Markets platform for more data, insights and history. Don’t have an account? Learn more
In November, New Zealand Units (NZUs) saw growth for a fourth consecutive month, as market levels adjusted in anticipation of the quarterly auction in early December. November marks the first time since March that NZUs have traded above the NZ$64.00 level.
The market opened at NZ$63.70, five cents higher on October’s close. Prices saw growth early in November, reaching NZ$63.95 on the 6th. NZUs hovered within a five-cent differential until the 21st where greater buyer flow saw prices lift.
With 75,000 units reportedly exchanged on the 25th, increased activity saw the NZ$64.00 level finally breached on the way to the monthly-high of NZ$64.10 on the 26th. Prices hovered within a five-cent band for the remainder of the month’s trading, closing November at NZ$64.10.
With a partial clearance of the December auction (4mln out of 11.1mln available), NZU ETS participants look ahead to 2025 and the prospect of tighter market dynamics.
Login into the CORE Markets platform for more data, insights and history. Don’t have an account? Learn more
European Union Allowances (EUAs) experienced volatility across November, reflecting broader trends in natural gas and energy markets.
The benchmark Dec24 contract began the month at €63.78, reflecting a modest decline from the previous month’s close. After bottoming out at €62.37 on the 6th, EUAs lifted to reach €68.80 on the 11th, driven by colder temperatures and lower renewables output.
After a brief dip to €65.39 on the 13th, the market quickly rebounded with the Dec24 contract climbing to a monthly high of €71.54 on the 25th, spurred by bullish sentiment around gas supply and EU auction adjustments.
In the final days of November, bearish pressure from improved energy fundamentals saw prices retrace earlier levels, with the Dec24 contract declining to €68.40 by the close on the 29th.
After a quiet start to November for the Voluntary Carbon Market (VCM), retirements recovered with a surge of 7mln across the final week, bolstered by a contribution of 1.25mln retirements from a Brazilian deforestation project (REDD VCS 981).
While volumes were improved on November 2023, liquidity remained low across the month. It is broadly anticipated that a December pick-up in activity, driven each year in retirements and corporate buying, might serve to tighten market dynamics. After healthy retirements in October (13.8mil) and a strong final week in November bringing November’s total to approximately 17mil, analysis from Carbon Pulse found that some 28mln retirements would be required across December to surpass last year’s figures.
Prices softened in November, with the CBL GEO Dec24 futures contract dropping to its lowest point of US$0.10 on the 10th, as traders shifted positions to the 2025 benchmark. A strong second-half to the month saw the contract lift before month’s end, to close at US$0.40. The N-GEO Dec24 contract followed a similar curve, bottoming out around the 11th at US$0.21, before picking up to end the month at US$0.35.
Earlier in the month, news of an agreement at COP29 on some of the most contentious clauses in Article 6 sparked optimism among international carbon market participants, signalling the end of nine years of negotiations. Agreement was achieved on language stipulating the authorisation of ITMOs (6.2) and the UN’s role in crediting and quality assurance (6.4).
Elsewhere, the UN International Civil Aviation Organisation (ICAO) granted full approval of several crediting standard for CORSIA Phase 1 (2024-2026): Verra, Gold Standard, Climate Action Reserve and Global Carbon Council. These standards now join the ART Trees and American Carbon Registry as eligible to supply credits under Phase 1 of the CORSIA international aviation offsetting scheme. An estimated 64-162mln credits may be required for Phase 1 of the scheme.
After a month full of progress in October, biodiversity market participants are bringing the COP16 Biodiversity key takeaways into action.
For country participants involved in the negotiations, discussions will continue around unresolved COP16 agenda items in February 2025 at a follow-up meeting in Rome.
Here are some of the key outstanding outcomes from COP16:
European Union (EU)
Australian Biodiversity Credits Public Pricing Benchmark
The NSW Government made progress in reforming the Biodiversity Offset Scheme. It has now passed the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Act 2024. This act improves the integrity of the scheme’s outcome by raising the ambition, transparency, and efficiency of the processes and helping projects be more independent.
The NSW Biodiversity Offset Scheme (BOS) credit trades saw some growth in volume traded compared to the previous month, however much lower compared to last year’s performance. A total of 12,270 credits were traded in this month. Almost 80% of credits traded are ecosystem credits and about 20% are species credits. The volume weighted average price (VWAP) of the month is A$3,531.63 per credit and the maximum price traded is A$ 16,900.
Biodiversity and nature markets are a quicky evolving space. The CORE Markets team has released an introductory guide on the topic. Learn more here
The events outlined in this month’s update highlight the evolving nature of global carbon and environmental markets and the complexity of the net zero transition.
To discuss your unique requirements, get in touch with our team today to explore how we can help.
Global Environmental Markets Report - November 2024
