Green Energy: Could carbon credits be the next boom market?
Energy
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Forget copper and iron ore, could planting trees and storing carbon be the next boom market?
Carbon prices in the EU’s long established Emissions Trading Scheme have sailed through the roof in 2021 as investor pressure grows and emissions reductions targets gain increased corporate traction.
The price of carbon has soared to records not seen since the launch of the market in 2005 of over 50 euros a tonne, with some especially above-consensus analysts predicting it could climb as high as 110 euros by the end of the year.
Carbon price futures in 2021. Pic: Ember Climate/Intercontinental Exchange
13 April 2021
The Australian carbon market is undergoing a “fundamental repricing” on the prospect of a national net-zero emissions goal;
Prices for Australian Carbon Credit Units (ACCUs) could more than double by 2030, rising to a range of $20-45/t
While a net-zero target will be a supportive factor for local prices, offsets are unlikely to be used as a permanent replacement for emissions reductions. This could result in more muted demand, and prices at the lower end of the anticipated range.
In our latest Carbon Market Outlook, last week, we present our expectations for Australian Carbon Credit Unit (ACCU) prices, supply, and demand from 2021-30, including scenarios for the adoption of a net-zero emissions target for industry.