Australia releases consultation on new carbon market infrastructure to boost ACCU liquidity: sources

Australia’s Clean Energy Regulator released a consultation on Oct. 11 regarding the requirements for establishing new market infrastructure aimed at providing participants with greater access to carbon markets and enhancing liquidity in trading Australian Carbon Credit Units, according to market sources.

The consultation seeks to identify the necessities and priorities for establishing a new Unit and Certificate Registry and to test the feasibility of an ACCU exchange trading model.

An ACCU project developer said the new registry will increase the opportunity for new funds to participate in the market, which will, in turn, be good for liquidity.

The new Unit and Certificate Registry will replace the existing Australian National Registry of Emissions Units (ANREU) and connect with other platforms and exchanges to encourage greater investment and stronger trading in carbon and other environmental markets.

ANREU was established to securely track the location and ownership of ACCUs, allowing users to transfer, cancel or relinquish emission units. ACCUs, certified emissions reductions, emission reduction units and removal units were among the units held in this registry.

“[The consultation] should be a good thing for making it easier to own, hold and transact compared to the current quagmire created by the ANREU and delays in becoming an account holder,” the project developer added.

In a previous Platts report on July 5, an ACCU trader emphasized the complexity of setting up a registry account, which is required for the physical delivery of credits in ACCU spot trading. This process involves onboarding multiple counterparties and potential credit risk.

Sources suggested that the new registry will encourage more participants to enter the market, though the volume of ACCU issuances going forward will likely remain unaffected.

Platts, part of S&P Global Commodity Insights, assessed Generic ACCUs at A$36.20/mtCO2e and Human-Induced Regeneration ACCUs at A$36.40/mtCO2e, both 15 Australian cents higher on Oct. 10.