What’s new in the Q3 ACCU Market Forecast Report?

What’s new in our forecast model this quarter

The Q3 edition of the ACCU Market Forecast Report includes several key updates to the forecast model.

These include:

1. Demand side

• Bottom-up approach for determining ACCU demand from Safeguard entities, by reviewing announced and committed physical abatement measures and updating our assumptions to forecast future physical abatement landscape.
• Inclusion of insights related to the abatement potential and timing of physical decarbonisation measures per sector from the Climate Change Authority’s (CCA) Sector Pathways Review 2024
• Assessing the impact of existing and committed Carbon Capture Utilisation and Storage (CCUS) projects on ACCU demand, especially from the Oil & Gas sector.

2. Supply side

• Updating the existing project registry details with the latest data made available by the Clean Energy Regulator.
• Refining assumptions regarding project failure rates and assessing the impact on future ACCU issuances both from existing and new projects.
• Leveraging market price signals as triggers for investment into new projects, considering lead times for issuances.

3. Price forecast

• Development of long-run marginal cost (LRMC) curves for different ACCU methods to inform new project issuances.
• Determining the impact of the issuances from new projects on the spot price forecast considering the supply-demand dynamics and price elasticity per method type.

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Key insights from the Q3 ACCU Market Forecast

This edition introduces several important updates and new insights into ACCU market, across supply, demand, and pricing trends.

These include:

• Peak ACCU demand
  CORE Markets' analysis indicates that demand across all sectors is likely to peak in FY31, a 45% increase from FY26, driven largely by Safeguard Mechanism entities. The forecast report also explores how various ACCU types — such as those generated by Environmental Plantings — are gaining traction due to their perceived alignment with corporate sustainability strategies.

• Safeguard Mechanism demand
  ACCU demand from Safeguard Mechanism entities is expected to reach approximately 30 million units by FY31. The forecast report provides further in-depth detail about the committed and potential physical abatement from these facilities and their expected shift in demand preferences.

• Voluntary ACCU demand
  Voluntary demand for ACCUs is forecast to exceed 7 million units annually by the late 2030s. Corporations are expected to increasingly select higher permanence, sequestration ACCUs from projects with co-benefits that align to their brand values and sustainability goals.

• Projected ACCU supply needs
  More than 170 million new ACCU issuances will be required between FY29 and FY40 to meet future demand, with growing contributions from Soil Carbon and Environmental Plantings. The forecast report provides further detail on the current supply mix broken down by method and how shifting preferences could impact supply dynamics.

• Cumulative ACCU holdings
  By FY26, market participants are expected to hold over 40 million ACCUs, with Generic, and HIR ACCUs accounting for more than 80% of these holdings. The forecast report details an expected supply squeeze in the coming years; however, supply is likely to catch up to cater to the growing demand.

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To view updated charts and learn more about the interaction of ACCU market dynamics, check out this article

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Learn more about the evolving ACCU market

• Request a proposal for the latest version of the ACCU Market Forecast Report here‍
• 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.
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