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The latest publication by Vivek Dhar, CBA's Director Mining and Energy Economics, "ACCU markets look balanced from 2023-24 to 2029-30," discusses changes in the carbon market and future uncertainty surrounding carbon markets.

To reach net zero by 2050, the global community needs to both reduce and remove carbon emissions. And carbon reduction will be achieved through a combination of new technologies and practices, as well as major demand shifts. The Australian Carbon Market is centred on the creation, sale, purchase and surrender of the Australian Carbon Credit Units (ACCUs).

Consumers or businesses that want to offset their emissions can purchase credits from project developers, this may either be organisations and institutions voluntarily electing climate targets (being the voluntary market), or high emitting facilities obliged to surrender ACCUs in order to reduce their emissions and stay below their baselines.

Vivek explains the recent changes to the Safeguard Mechanism imply a significant increase in Australian Carbon Credit Unit (ACCU) demand from 2023-24 to 2029-30. He also discusses the Chubb Review’s conclusion that the ACCU framework is “essentially sound” suggests that new ACCU supply should not be too adversely impacted, and CBA’s view that the ACCU markets will be balanced from 2023-24 to 2029-30.

Read the full report

CBA’s Global Economic and Markets Research (GEMR) team publishes a wide range of economic and financial research each week covering the latest data, trends, policy developments and topical issues in Australia and other major economies. To access these publications please visit the GEMR website.

Our Economic Expert

Vivek Dhar has worked as Commonwealth Bank’s lead mining and energy commodities strategist since late 2014 after working as a junior analyst for 4 years. Prior to working at Commonwealth Bank, Vivek interned at Deutsche Bank and Siemens. He holds a Bachelor of Engineering (Electrical) and a Bachelor of Commerce (Finance and Economics) from the University of Melbourne.

To learn more from leading industry experts about Australia’s transition to a net-zero economy, head to CommBank Foresight™ – insights for future-facing businesses.

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Things you should know

  • The information presented is an extract of an Economic Insights report and provides only a summary of the named report. Please use the link provided to access the full report, and view all relevant disclosures, analyst certifications and the independence statement.

    The named report is not investment research and nor does it purport to make any recommendations. Rather, the named report is for informational purposes only and is not to be relied upon for any investment purposes.

    This extract has been prepared without taking into account your objectives, financial situation (including your capacity to bear loss), knowledge, experience or needs. It is not to be construed as an act of solicitation, or an offer to buy or sell any financial products, or as a recommendation and/or investment advice. You should not act on the information contained in this extract or named report. To the extent that you choose to make any investment decision after reading this extract and/or named report you should not rely on it but consider its appropriateness and suitability to your own objectives, financial situation and needs, and, if appropriate, seek professional or independent financial advice, including tax and legal advice.

    Global Economic and Markets Research is a business unit of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 (Bank). The Bank and its subsidiaries, including Commonwealth Securities Limited ABN 60 067 254 300 AFSL 238814, Commonwealth Australia Securities LLC and CBA Europe Ltd are domestic or foreign entities of the Commonwealth Bank Group of Companies.