Australia's ACCU issuance falls 46% MOM in February amid sluggish market

Australia's carbon market saw a sharp slowdown in February, with Australian carbon credit unit issuances dropping 46% month over month, according to Clean Energy Regulator data analyzed by Platts.

Analysis of the data showed that 699,878 ACCUs were issued in February, down from 1,299,000 in January.

All ACCUs issued in February were attributed to vegetation and agriculture project types, with no credits issued to waste projects during the month, the data showed. This marked a notable shift from January, when waste projects received over 500,000 ACCUs across 15 projects, accounting for nearly 39% of total issuances.

In February, a total of 50 projects received ACCUs, with 48 from vegetation projects and two from agriculture projects.

Geographically, Queensland led with 325,847 ACCUs issued across 22 projects, followed by Western Australia with 186,421 and New South Wales with 164,113.

The Generic ACCU, representing a mix of landfill gas, waste and other methodologies traded in the secondary market, remains one of the most liquid segments of Australia's carbon market, despite method-specific price differentials.

Platts, part of S&P Global Energy, assessed benchmark generic ACCUs at A$36.60/metric ton of CO2 equivalent on March 18, down 5 Australian cents/mtCO2e day over day. The Platts generic without avoided deforestation ACCU differential was assessed at 0 Australian cents/mtCO2e.

"The market has been just the same over the past 10-12 days. No real movement in prices or direction, to be honest," a New Zealand-based trader dealing with ACCUs said.

The trader added that entities are likely finished with purchases, and the market may see little activity until the compliance deadline for surrender on March 31, aside from a few sporadic big trading days.

The ACCU market has remained relatively quiet since early February, with minimal volumes traded in the second and third weeks, even as activity in Safeguard Mechanism Credits picked up. The Platts generic ACCU prices have fallen 3.05% since Feb. 2.

Platts assessed SMCs at A$36.45/mtCO2e on March 18, down 5 Australian cents/mtCO2e day over day.