The forward price of Australian carbon credits has hit a record high as companies lock in supply of the offset agreements several years in advance to prepare for the prospect of a Labor government mandating emission reductions.by 2050, allowing Australian corporates to determine their own timetables and the instruments they use for emission reductions.
“There has been an uptick in demand from companies to build their pipeline of ACCUs in the advance of an election,” said Hugh Grossman, executive director, Energy and Carbon Markets, at RepuTex Advisory.“If there is a change of government, there could be a tightening of the market, and they are aware of that and the majors are beginning to get out ahead of that.”
The price of ACCUs – which offset a corporate’s emissions – rose 180 per cent last year, such was the demand, and analysts see ongoing support for prices.Labor proposes to gradually ratchet down the “baselines” – effectively carbon caps – under the Safeguard Mechanism. Its 45 per cent economy-wide target that will be the starting point and concessions to so-called energy intensive, trade exposed industries will be negotiated sector by sector, in some cases plant by plant.
Federal Energy Minister Angus Taylor has criticised the policy, which he has described as a “stealth” carbon tax.