Scott Morrison – PM’s climate ambition heats up investment in Australia’s carbon market
Mr Morrison stopped short of committing to a firm deadline. The federal government’s climate commitment is unchanged: to reach net zero emissions by sometime in the second half of this century.
Nevertheless, large corporates and big emitters were snaffling up carbon credits while they were cheap, Mr Grossman said, under the expectation Australia would eventually set a cap on emissions or regulate emitters — and cause the price to rise.
“For those companies, today’s carbon offset prices therefore represent value, with early movers snatching up offsets at a notable discount to long-run price scenarios,” he said.
Carbon credit investment is voluntary for Australian emitters. But large emitters and corporate investors are increasingly enthusiastic about the Australian Carbon Credit Units.
RepuTex forecasts Australian carbon prices to reach about $18 a tonne on the back of growing expectations for increasing climate policy ambition.
“The interest in carbon credits undoubtedly rose after Scott Morrison’s change in language towards a 2050 [target], and that will rouse the interest of speculative investors, and potentially, motivated high emitters,” Market Advisory Group managing director Raphael Wood said.
Mr Wood said in January that investment in Australia’s carbon market was doubling each year.
“We were seeing around 100,000 tonnes of credits each month going through the registry in 2018. That went to about 250,000 tonnes a month in 2019. If you take three months after COVID out, in March, April and May last year, we are now seeing 350,000 tonnes to 400,000 tonnes a month.”
Carbon credits are generated by projects that sequester carbon by re-growing vegetation or investing in large-scale protection of forests to lock in ongoing carbon capture that could be lost to land clearing.