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.
December saw another robust month for ACCU trading activity, with volumes totalling 3.82 million units, making it the second-highest month of the year despite the typical holiday slowdown. The first half of December was particularly active, accounting for 73% of the month’s trade volume.
Spot market prices retraced November’s highs, with Generic, No Avoided Deforestation (No AD) and Human-Induced Regeneration (HIR) spot ACCUs opening at $40.10, $40.00, and $40.75 respectively. Consistent price softening across December saw the market retreat below $40.00 early in the month, with the spot market closing lower at $36.50 (Generic), $36.50 (No AD), and $36.75 (HIR). Despite the substantial month-on-month price differential, the spread between Generic and HIR ACCUs remained at parity across December, continuing the trend of recent months.
Issuance slowed in December, with 505k ACCUs generated by December 18th, leaving the Clean Energy Regulator (CER) 2.55mil units short of its revised 2024 issuance target of 19mil. HIR projects contributed the majority of issuance at 59% (300k), while Landfill Gas projects accounted for 35% (89k). The CER attributes the shortfall in both issuance to lower-than-expected unit generation from new projects.
Carbon Abatement Contract exits flatlined at year’s end, ticking higher to 3.995mil. This remains well short of the CER’s revised target window of between 7and 13mil.
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The New Zealand ETS started the month with the final auction of 2024, achieving a partial clearance of the 11.1mil units on offer.
4mil allowances were cleared across twenty successful bids from ten market participants, at a price of NZ$64.00 each. The remaining 7.1mil NZUs that were not sold are now removed.
December saw greater volatility in the market, with the spot closing at NZ$64.40 on the 4th. Following the quarterly auction, NZUs plummeted to NZ$60.00, before rebounding to close at NZ$64.25 on the 16th.
The volatility continued across the second half of the month as prices first softened to NZ$61.70, rebounding to NZ$62.90 on Christmas Eve and ending the year at NZ$64.00.
Following December’s quarterly auction, it was announced that the Q125 auction, to be held in March, would reduce the total number of allowances to just 1.5mil, with 2025’s total reduced to only 6mil across four auctions.
The reduced auction volume signals the prospect of a supply/demand shift that could lead to tighter market dynamics in the year ahead.
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European Union Allowances (EUAs) demonstrated significant volatility in December, particularly with the outgoing Dec-24 contract. Early in the month, colder weather and reduced wind generation drove gains of €0.43 to €68.83, while a drop in gas prices later applied downward pressure, landing at €68.49 on the 4th.
Mid-month, prices fluctuated sharply around the December options expiry, reflecting shifts in gas demand and regulatory sentiment. A sharp sell-off followed on December 10th, with prices dropping 3% to €66.37, driven by bearish gas sentiment and regulatory uncertainty.
Following a rebound driven by colder temperatures, the market peaked at €68.63 on the 12th. The final session for Dec-24 was marked by heavy trading and notable price declines, dropping a substantial 3.7% to close at €66.10.
The Dec-25 contract displayed steady growth in the latter half of December, following the expiry of the 2024 benchmark. After bottoming out at €64.05 on the 17th, the market strengthened to the monthly high on the 31st at €73.62, before closing the year at €73.00.
The voluntary carbon market ended the year with a welcome surge in retirements, following the trend from 2023. Despite falling just short of the yearly record, December’s heightened retirement activity ultimately reached 22.8 million credits, a significant improvement on November’s 14.8 million but short of December 2023’s figure (37.1mil). The yearly retirement figure sits second-highest overall (162.6mil approx.), falling just shy of 2023’s record-breaking total.
3.3mil Mai Ndombe REDD+ credits of varying vintages were retired in the month. Other projects with significant retirements across December included a V23 Indian cookstoves project (830k), and 385k from the V19 Katingan Peatland Restoration project. As in recent months, oil major Shell was responsible for approximately one-third of all retirement activity for the month (7.4mil credits). This brings Shell’s yearly figure to 14.1mil credits, around 9% of all retired credits across the four major registries.
Amid growth in retirements, the International Civil Aviation Organisation (ICAO) announced the eligibility of four new standard bodies to supply credits to the UN offsetting scheme, fuelling demand and price growth across included credit types. The news spurred rallies on the 9th in ICE’s Dec-25 and Dec-26 futures contracts, settling US$1.00 and US$1.25 higher to hit US$15.50 and US$15.00 respectively. Platts valued Phase 1 CORSIA spot credits at US$20.00 mid-month, up US$5.00 from the start of December.
Despite trading broadly sideways over the second half of the year, important developments across 2024 have given market participants cause for optimism for the coming year. The IC-VCM’s introduction of the high-integrity CCP label, alongside the breakthrough on Article 6 at COP29 and, late in the year, the admission of eligibility for various credit types to the ICAO offsetting scheme mark significant milestones that could drive renewed interest and investment in the voluntary carbon market.
Progress continued in biodiversity research and policy developments around the world in December.
As entities await the continuation of COP16 in February 2025, the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) released report on the complex interconnections between environmental, social and economic crises. Three years in the making, the report is said to be the most ambitious scientific assessment every undertaken of these interconnections.
In Australia, the Victorian state government released a consultation on how renewable energy developers can start measuring, reporting and actioning their biodiversity footprint. This is a positive step towards increasing awareness and demand for nature positive projects.
Australia and New Zealand
There were no major developments in relation to the Nature Repair Market in December. The Nature Repair Committee held a meeting on early in the month with a full agenda. It covered previous consultation outcomes, revisions to the Biodiversity Assessment Instrument (BAI) and guidance material, revisions to the Replanting Native Forest and Woodland Ecosystems method and its supporting documents, demo of the Platform for Land and Nature Repair (PLANR) website and a meeting with the Queensland Land Restoration Fund about the role of biodiversity in accrediting carbon project co-benefits.
The Department of Climate Change, Energy, the Environment and Water (DCCEEW), in partnership with CSIRO, is creating an Ecological Knowledge System (EKS). The EKS is a dataset that can be used to model biodiversity and restoration options for the NRM.
Australian Biodiversity Credits Public Pricing Benchmark
Following the passing of the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024, further amendments to the Biodiversity Conservation Regulation 2017, which detail the operationalisation of the Bill, are currently underway. Consultations are expected to commence between now and June 2025.
The NSW Biodiversity Offset Scheme celebrated surpassing 100,000 hectares in total areas contracted as Biodiversity Stewardship Agreement sites. The last reverse auction results in October 2024 received 69 bids covering more than 26,500 credits, where 5,000 of these credits have been approved for purchase, totalling the purchased value to around $23 million. In the first 2 months of the year, successful applicants will be contacted by the Biodiversity Conservation Trust to be made a buying offer.
In the Credits Transaction Register, 17,808 credits were traded in December, bringing the total credits traded for the year to 101,894, almost 40% less than 2023 figures. In terms of price, the volume weighted average price (VWAP) for all credits in December was $2,798.60, with the maximum price traded at $7,765.51.
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.
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Global Environmental Markets Report - December 2024
Designed for decision-makers with carbon market exposure, the ACCU Market Forecast Report serves as a critical tool for investors, project developers, and sustainability leaders. As new data and insights become available, we incorporate them into our forecast model. See what’s new in the Q3 forecast model.
