Signals and shifts: What Q3 2025 reveals about Australia’s ACCU market

What's new in the Q3 ACCU forecast model

The Q3 model reflects several important updates across policy, supply and demand assumptions. These changes reflect new public data, emerging project trends and a clearer national emissions trajectory following the announcement of Australia’s 2035 NDC target.

A key shift this quarter is a refined assumption on post-2030 Safeguard baseline decline rates.

While the final settings remain subject to the Safeguard Review, Australia’s 2035 NDC to reduce emissions by 62-70% from 2005 levels provides a clearer policy signal.

In this quarter’s release, we evaluate the impact of a steeper post-2030 SGM decline rate - aligned with Australia’s NDC - on the long-term ACCU demand, particularly between 2030 and 2035.

Additional updates include:

• New and evolving methods – incorporation of the potential impact of existing projects transitioning to the proposed Landfill Gas and Savanna Fire Management methods.
• Updated supply-side activity – integration of the latest CER project and issuance data, including signals from new registrations such as Environmental Plantings and Soil Carbon.
• Revised technology cost assumptions – new inputs from AEMO’s IASR and CSIRO’s GenCost Report, informing long-term abatement cost scenarios and broader market context.

Together, these updates sharpen the long-term outlook.

The revised Safeguard baseline decline rate assumptions materially influence the timing and scale of expected ACCU demand, while supply-side adjustments improve visibility of potential constraints and the role of new project development across the 2030s.

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Quarterly signals and market activity

Q3 activity reflected stronger positioning from compliance buyers, softer voluntary demand and ongoing shifts in project activity.

Key public signals include:

• ACCU holdings reached 56.8 million, driven primarily by compliance entities accumulating units ahead of future obligations.
• Issuance volumes eased from Q2 levels but were around 10% higher year-on-year, with vegetation and waste projects remaining the main contributors.
• Voluntary retirements fell sharply after last quarter’s highs (down 61% from Q2)
• Compliance retirements remained steady.
• Registrations for Environmental Plantings and Soil Carbon projects increased through the quarter, adding to the pipeline of nature-based supply.
• Deliveries into the CCM continued to grow, though at a subdued pace, reflecting ongoing price sensitivity.

Overall, the quarter showed a mix of stronger compliance positioning and moderating voluntary procurement.

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Key insights from the Q3 ACCU forecast

Demand outlook

The model continues to show the Safeguard Mechanism as the dominant source of ACCU demand, supported by smaller but meaningful contributions from voluntary and state-led procurement.

Updated policy assumptions, including a steeper post-2030 baseline decline rate, shape how demand evolves across the forecast horizon.

Key modelled insights include:

• Higher long-term demand: The updated assumption of a steeper post-2030 Safeguard decline rate is the key factor behind the significant increase in projected ACCU demand compared with our Q2 modelling. This adjustment reflects the stronger policy signal provided by Australia’s 2035 NDC, which the FY26/27 Safeguard Review may address by revising post-2030 baseline decline rates to align with the new commitment.
• Peak demand occurring later: Under the updated scenario, annual demand is expected to peak in FY38, later than previously anticipated. The later peak reflects two interacting factors: stricter compliance requirements under the 2035 NDC, and the time it takes for industrial abatement technologies to be deployed at scale. Together, these conditions extend reliance on offsets.
• Growing role for voluntary demand: In the later years of the forecast, voluntary commitments and corporate decarbonisation targets contribute a growing share of total demand, as Safeguard demand begins to ease.

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Supply outlook

The supply outlook reflects the interplay between existing project output, new project development, method transitions and policy signals.

The Q3 model incorporates updated assumptions about project transitions, crediting periods and how the market is likely to respond to price signals and the influence of regulatory settings across the 2030s.

Key modelled insights include:

• Existing supply and holdings meet demand until FY31. Under current assumptions, existing projects and accumulated holdings are sufficient to meet modelled demand through to FY31. Beyond this point, new issuance becomes increasingly important for maintaining market balance.
• Significant new supply required through the 2030s. Between FY32 and FY40, the model indicates a need for substantial new ACCU supply to meet demand growth. Generic and Environmental Plantings methodologies provide the largest contributions in this scenario, reflecting their current scale, method availability and development pipelines.
• New/updated methods could support short- to medium-term supply. Transitions of existing Landfill Gas projects to the proposed new method are expected to add supply in the near-term. This is particularly important for the 74 projects whose crediting periods end in CY26 and account for roughly 80% of annual landfill gas issuances. Existing Savanna Fire Management projects transitioning to their proposed new methods are also expected to increase supply, albeit at a slower pace due to the need to renegotiate consent from native title holders, which can extend project timelines. Together, these method updates help ease some of the supply pressure as the market approaches the mid-2030s inflection point.

Together, these insights highlight the importance of timely investment in new project development and method availability, particularly as compliance requirements tighten and existing project output begins to plateau.

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What does this mean for ACCU price dynamics?

The Q3 forecast produces a wider range of potential price outcomes across ACCU method types, reflecting increased uncertainty across both supply and demand.

Price trajectories in the model are shaped by the interaction between evolving compliance requirements, the timing of new project development and changing buyer preferences.

Key modelled insights include:

• Greater variability in long-term price pathways.
  The revised post-2030 Safeguard baseline decline rate assumption and updated supply outlook increase the spread of scenario results, particularly through the mid-2030s when demand peaks and new supply becomes more critical.

• Heightened price sensitivity at supply–demand inflection points.
  As existing supply is drawn down and holdings are used to ease tightening conditions, modelled prices become more sensitive to the volume of new projects entering the market. This reflects increased exposure to both method-level and market-wide scarcity, as well as heightened sensitivity to buyer behaviour.  

• Persistent premiums for certain ACCU types.
  Differentiation between ACCU types is expected to continue, with nature-based units likely to attract higher prices in modelled scenarios where voluntary demand strengthens or buyers prioritise co-benefits and reputational considerations.

Overall, the Q3 model highlights the need for buyers and project developers to plan fora broader distribution of price outcomes, particularly as long-term policy settings and supply development timelines continue to evolve.

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Interpreting the signals

The Q3 market forecast provides a clearer view of how updated policy signals, project activity and market behaviour are shaping long-term ACCU market dynamics. The model signals stronger potential demand, a greater dependence on new supply in the 2030s, and a broader distribution of price outcomes, reflecting rising uncertainty in the supply–demand balance.

The key message for market participants, is that long-term planning now requires a closer understanding of how policy, supply development and buyer behaviour interact across multiple scenarios.

The Q3 2025 ACCU Forecast is part of CORE Markets’ Carbon Intelligence Package – a digital subscription that integrates the quarterly forecast with live market prices, analytical tools and deep market insight. It is designed to help participants make informed decisions and align procurement, investment and compliance strategies in a changing market.

Learn more here or contact our team