ACCU Market Monthly Report - March 2025

ACCU market overview for March 2025

• March was a busy month for the Australian Carbon Credit Unit (ACCU) market, which has been sensitive ahead of the May 3 federal election. Following a mid-month slump in market activity, trade volumes of ACCUs and Safeguard Mechanism Credits (SMCs) surged to 3.69mil exchanged across derivatives, spot and forward tenors, in the final weeks of March, driven by unexpected momentum in the SMC market with volumes contributing more than 200k to the monthly total.  
• This market sensitivity was compounded by rhetoric from Liberal-National Party Coalition members stating intentions to soften the Safeguard Mechanism if elected, as well as higher than anticipated SMC issuance volumes in February for the FY24 compliance period. Both factors have placed downwards pressure on prices in the spot market across Generics, No Avoided Deforestation (No ADs), and Human-Induced Regeneration (HIR) ACCUs.  
• However, the outlook for scheme fundamentals is generally positive for the period following the election and over the mid-term. This has in part been indicated through more call option interest seen in the market in recent weeks. Participants who closely watched the polls and betting markets reserved some confidence in the ongoing operation of the Safeguard Mechanism.
• Despite a tight political race, the low likelihood of a Coalition majority government is positive for market confidence, as explored in the election deep dive available to our Carbon Intelligence Package subscribers.

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Method-specific ACCU price movements and volumes traded

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ACCU price

• ACCU prices were weighed by the impending election, with betting markets fluctuating across the month as to the likely victor, and participants watching closely.
• The spot price continued to soften across March, with Generic and HIR markets opening at the monthly high of $34.00, $0.50 higher than February’s close, and No AD ACCUs rallying to hit $34.50.  
• The Generic spot market closed the month at $32.50 on the 27th, while trades in No AD and HIR spots on Monday 31st saw some recovery to close the month at $33.00 and $33.25 respectively.
• Markets for premium methodologies remained quiet across March.

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ACCU volumes traded

• Though the forwards markets saw little volume across the month, large options parcels were exchanged with expiries in the back-half of 2025. Put spreads were printed at levels below the spot market level for mid-year expiry, but a bullish tone prevailed across 1 million units’ worth of call trades.  
• Despite the spot market profile softening across March, trade volumes were bolstered over the month by compliance buying and optionality.  
• As in 2024, market activity was bolstered by compliance buying ahead of the yearly March deadline. Though market activity has remained elevated since Q4 2024 (3.693 million ACCUs exchanged across all markets in March, compared to the 2024 monthly average of 2.326 million), volumes have remained low of November’s peak of 4.378 million.
• Generic No AD ACCUs comprised 74% (1.61 million) of total spot activity, following the trend from recent months. However, with Generic ACCUs dominating the options markets (1.15 million exchanged), Generic units ultimately comprised 41% of all ACCUs traded in the market.

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For more data and market commentary, explore our Carbon Intelligence Package, a digital subscription for deep market insights, cutting edge financial and physical data, advanced analytical tools and access to market experts.

ACCU price forecast

To help market participants better model their commercial position, the CORE Markets team has developed a unique method-specific ACCU price forecast.

We believe demand preferences will vary among buyer groups, the costs of developing new ACCUs will vary by methodology and that this will be reflected in the market for the foreseeable future.

The CORE Markets ACCU price forecast is created by our environmental markets advisory team with data from our carbon analytics platform.  

The model is continuously tested and refined with the help of an expert industry working group.

In addition to the base model, the CORE Markets team can provide a full suite of scenario analysis forecasts on a bespoke basis.

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Available exclusively to Carbon Intelligence Package subscribers. Learn more

ACCU demand

ACCU demand trends are considered in detail in our monthly analysis as available to Carbon Intelligence Package subscribers.

This includes:

• ACCU retirements
• SMC market activity
• Method-specific ACCU demand forecast
• Compliance hedging strategies

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Learn more about the Carbon Intelligence Package

ACCU supply

ACCU issuances

The CER’s most recent issuance period covered mid-February to mid-March and appeared to strengthen over recent months. 1.243 million units were issued to fifty proponents, across eighty-six individual projects.  

Terra Carbon was the single largest generator, with 304,000 ACCUs issued across twenty-eight projects. The Bareeda Regeneration Project, administered by FC McKerrow Family Trust, generated the most units of any individual project, with 52,000 issued across the period. At 45,000 units issued, the Consolidated Pastoral Company Beef Herd Project generated substantial volume over the period, using the recently suspended beef cattle herd management methodology.

Human Induced Regeneration (HIR) ACCUs had a particularly strong showing in March, comprising 50.1% of the total issuance (623,000 units). Avoided Deforestation ACCUs were also generated in large volumes, with 444,000 comprising nearly 36% of the total. Following strong issuances in previous months, premium methodologies (SFM, landfill gas, native forest from managed regrowth, alternative waste, etc.) were only produced in limited quantities.

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Carbon Abatement Contracts

For commentary on Carbon Abatement Contracts and the projected volumes of ACCUs in the Cost Containment Mechanism, explore our Carbon Intelligence Package - a digital subscription for deep market insights, cutting edge financial and physical data, advanced analytical tools and access to market experts.

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ACCU supply forecast

ACCU supply trends are considered in detail in our monthly analysis as available to Carbon Intelligence Package subscribers.

This includes:

• ACCU by-method supply forecast  
• Spotlight on the ACCU methodology pipeline

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Learn more about the Carbon Intelligence Package

Other market developments

• Reduced audit requirements for low-risk EP: In late March, the CER issued a new Audit Threshold Instrument which aims to ease administrative burden on smaller project developers by allowing some projects to forego auditing requirements. It permits a single- or zero-audit schedule for proponents for low-risk projects from the following methodologies: plantation forestry, environmental plantings (2014), and environmental plantings (2024). A project may be categorised as 'low risk' if it fulfils additional eligibility criteria specific to each methodology, with the aim of better facilitating remote monitoring and project quality assurance, in the absence of the more rigorous audits.
• As part of the latest budget, the Albanese Federal Government announced expansions of $2bn for both the Clean Energy Finance Corporation and the Green Aluminium Production Credit. Elsewhere, the Opposition was quoted anonymously as saying that their recently announced gas strategy “would benefit from a relaxation of Labor’s Safeguard Mechanism.” Further details on the changes intended by the Coalition are scant, but participants are watching keenly for any further announcements.

Stay up-to-date with the ACCU market

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