(6 June 2022 – Australia) Carbon credit prices could jump by six-fold as a direct result of increasing demand and strengthened net zero 2050 commitments, EY reports.
The EY Net Zero Centre released modelling suggesting the volume of credits required for offsetting purposes by business is expected to increase 30 to 40-fold by 2035 from current levels. This increase in demand, the drive for higher quality credits and the exhaustion of low-cost supply options could see prices rise to US$80-150 per tonne by 2035 (in real 2020 dollars) in comparison to current carbon credit prices closer to US$25 today.
With carbon credits expected to become scarcer and more expensive in Australia and globally, key business decision makers should be clear on decarbonisation strategies and the role of offsets in that strategy.
“If you're going to rely on offsets as a way of meeting this commitment, be very careful because they're going to become more expensive in the very near future. It will force companies to look much more seriously at internal abatement activities because many activities will become more cost effective compared to offsetting” commented EY Net Zero Centre Lead and PJP Partner, Blair Comley.