(17 August 2022 – Australia) Australian enterprises mandated to slash emissions under the new Labor government’s upgraded climate target will not need to turn to international carbon credit schemes to meet their targets according to new modelling by RepuTex.
The carbon market analysis group finding flies in the face of concerns warnings there may not be enough Australian Carbon Credit Units (ACCU) available on the domestic market for local emitters to offset emissions and remain under pollution caps imposed by the government under its expanded “safeguard mechanism”. Acquiring international offsets for Australia’s emissions target would attract criticism from climate advocates who warn it creates a high risk of using fake credits generated by projects that don’t tangibly sequester as much carbon as advertised, are designed to protect forests that never needed protection in the first place, or have been counted against multiple pollution sources.
The new RepuTex analysis shows the 215 high emitting facilities captured by the safeguard mechanism will be able to acquire the full allocation of carbon credits they require from the Australian market. The RepuTex forecast shows that over 200 million tonnes of ACCU will be generated between now and 2030, based on the number of offset projects already registered with the federal government.
“The numbers tell us that the Australian carbon offset market has reached scale. We’ve now had over 115 million ACCUs issued since 2012 and another 200 million are expected to be issued over the next decade. That provides us a very large liquid pool of domestic emissions reductions to support industry decarbonisation” commented RepuTex Executive Director Hugh Grossman.
“We expect ACCUs will be made available above A$30 a tonne. That’s very competitive. It’s really not all that far away from where the carbon price mechanism was back in 2012 and here we are a decade later. If you told companies a decade ago, that they would have access to offsets in 2022 at around $30 a ton, particularly domestic offsets, they would be very happy.
“Given we have such a large pool of domestic offsets, at low cost, and with high co-benefits such as job creation, investment, and environmental benefits, it raises the question, what is the need for international offsets. International offsets may be better suited to a world where Australia scales up its emissions reduction target to a 1.5°C trajectory, or where companies are required to offset their downstream emissions” Grossman added.
“A lot has changed in the last decade, and as things stand today, Australia’s domestic carbon offset market is well positioned to support industry, unlike a decade ago.”