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.
The ACCU market saw a sharp increase in trade volumes in September, reaching the highest levels for 2024. Total market activity across both spot and forward markets climbed to 2.55 million units. Generic spot ACCUs opened at A$34.90 (down slightly on August’s close of A$35.25). Prices remained stable until September 9th before trending upwards, reaching a peak of A$37.40 on the 18th. The market then softened to A$36.00 on the 24th, before closing the month at A$36.25, up 2.84% on August’s close.
Human Induced Regeneration (HIR) spots followed a similar trend. Opening at A$35.40, HIR spots matching the August close, and climbed in tandem with Generic ACCUs, peaking at A$37.40 on the 17th. A dip to A$36.10 followed on the 24th, but HIRs recovered to close at A$37.00, marking a 4.4% increase month on month. The HIR premium fluctuated over September, but narrowed toward month’s end, with buyers showing less interest in maintaining the premium as Generics improved.
Trade volumes surged with the spot market recording 2.04 million ACCUs exchanged, while forward trades totalled 507k units. The highest daily volume of Generic spots ever traded occurred on September 12th, with 531k units exchanged, surpassing the previous record set in March. HIR volumes were also strong, with almost 100k units traded on the same day.
The Clean Energy Regulator (CER) issued 3.2 million ACCUs during the month, a significant increase from August, and remains on track to issue 20 million ACCUs by the end of 2024. Savanna Fire Management (SFM) and Human Induced Regeneration (HIR) methodologies led issuances, with SFM ACCUs accounting for 801k units.
For a comprehensive update on the ACCU market, read our September 2024 ACCU Monthly Market Report
Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast
After improving NZ$9.55 across August to close at NZ$62.50, NZUs would go on to find a new level in September, trading in a narrow band over the month.
Markets opened with prices level with August’s close. After June’s declined auction volume, the third auction of the year (September 4th) also failed to clear without a bid for any of the 7.6 million units on offer.
Some market participants saw the result as a positive, perhaps leading to a contraction in the current surplus and an improvement in market dynamics. Traders anticipated that, despite the possibility of a partial clearance at the next auction, the volume would likely be declined, leading to a decrease in supply heading into 2025.
Following the auction, incremental price drops took NZUs to a low of NZ$61.45 on the 17th, before a week of increased trade volume (900k in the week to Sep. 20) spurred improvement in unit prices, trending to a high of NZ$62.60 on the 27th, before settling at NZ$62.15 to close the month.
Late in September, the NZ government released its quarterly Climate Action Plan. Among various measures spanning emissions trading, agriculture and the NDC, the Plan outlined the government’s intention to restrict the inclusion of exotics, such as pine tree plantations, from the Emissions Trading Scheme (ETS). The position has been widely criticised by the forestry sector, describing it as a handbrake on future investment.
The European carbon market, specifically the benchmark EUA Dec-2024 contract, saw some volatility but mostly faced a bearish environment; marked by external pressures and the influence of gas market trends.
The month started with a decline, as prices fell by over 1% on September 2nd. Reduced power sector emissions exerted downward pressure on the market. Dec-2024 closed at €70.30. A brief rebound followed on September 3rd, with prices inching up by 0.2% to €70.43.
On September 4th however, carbon prices dropped by over 3%, closing at €68.16 due to increased auction allowances and weaker demand in the power sector. By the 5th, prices continued to slide, reaching a six-week low of €67.00. The decline persisted into September 6th, with prices falling another 1% to €66.20.
A shift occurred on September 9th, as the market followed the upward trend in the gas sector. EUAs saw a modest recovery, increasing by 0.5% to €66.50. September 10th showed a directionless market, with prices barely moving, inching up by just 0.1% to €66.52.
On the 11th, potentially driven by losses in the gas market, Dec-2024 fell 2% to €64.92, a seven-week low. However, the market rebounded the next day, with prices climbing over 2% to €66.40.
The upward momentum was short-lived as carbon prices dropped again on September 13th, closing at €65.45, reflecting a weaker gas market. This bearish sentiment carried into the next week, with the Dec-2024 closing at €64.99 on the 16th, followed by a 3% decline on the 17th to €63.21, once again pressured by weak economic outlooks and declining gas prices.
An almost 2% recovery followed shortly after, however slipping again on September 19th and 20th, closing at €63.70 and €62.82, respectively, as gas prices fell further. The final week of September saw some recovery, with Dec-2024 closing at €65.24 on the 26th. The month ended on a positive note, with the price rising by 2% on the 27th to close at €66.52.
Throughout September, the European carbon market continued to suffer from fluctuations in gas prices, but also market sentiment around economic outlooks and supply dynamics.
In September, the voluntary carbon market saw a significant rise in issuances alongside improvement in volumes traded, with 22.9 million credits issued in the month, the highest monthly total in three years.
Liquidity in the market saw broad improvement with a surge in volumes transacted with 407k credits were traded, with the majority being C-GEO contracts.
With 10.2 million credits retired the month prior, September saw elevated levels continue with 9.4 million voluntary units retired.
Major deals were reported in removals credits, including Meta’s purchase of 1.3 million units from BTG Pactual, and Google procuring 50,000 tonnes from Mombak. These transactions highlight rising demand from tech companies to mitigate environmental impacts, particularly with the growth of emissions-intensive AI infrastructure.
September saw the upward trend of investor interest in nature-based projects continue. Climate Asset Management (CAM) secured over $1 billion for natural capital initiatives, driven by increasing awareness around biodiversity protection and nature-related reporting standards like TNFD.
Select price movement highlights:
The series of key global summits kicked off this month with New York Climate Week, and the concurrently running World Biodiversity Summit.
Governments and businesses are busy engaging in conversations, pitching ideas and solutions on how to better restore and protect nature.
A future circular bioeconomy vision is on the horizon, with the UN Biodiversity Conference (COP16) commencing on the 21st of October. The event will set the next stage of how the world will operate when considering nature in everything we do.
Update on reporting standards and governing bodies
European Union (EU)
US and Canada
Asia Pacific
There was significant progress in Australian government and business initiatives in September, ahead of the world’s first Global Nature Positive Summit held in Sydney in early October. This includes:
Australian Biodiversity Credits Public Pricing Benchmark
BOS credit trade volume saw a steep increase in September compared to the previous month with a total of 10,342 transactions. About 30% of the trades occurred on 5 September, following the announcement of the Nature Repair Market draft rules. Around 80% of these trades were ecosystem credits. The volume weighted average price (VWAP) of the month is A$3,964.83 per credit and the maximum price traded is A$32,401.37.
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 - September 2024
