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Australia’s carbon markets on track in 2021

Australia’s carbon markets are on track to meet 2021 estimates according to the Clean Energy Regulator in its June Quarterly Carbon Market report (QCMR).

Total emissions reduction from the Emissions Reduction Fund (ERF) and Renewable Energy Target (RET) schemes are forecast to reduce carbon dioxide equivalent (CO2-e) emissions by at least 57 million tonnes for the year.

Chair of the Clean Energy Regulator, David Parker, said the outlook for emissions reductions in 2021 was bright. June was a record Australian carbon credit unit (ACCU) quarter with supply increasing by 5.7 million units to achieve a first half result for 2021 of 8.8 million, up 5% over the same period in 2020.

Mr Parker noted the ERF recorded its 1,000th project on 26 August, with more registrations expected ahead of the 13th ERF Auction scheduled for 13 and 14 October. The September quarter is also expected to see a large number of projects registered ahead of the 13th ERF Auction scheduled for 13 and 14 October 2021. Project applications for the auction closed 25 August.

“Future supply also looks healthy with new and varied methods expected to materially contribute beyond 2022.”

“Quarter 2 investment in large-scale renewables was strong. We saw a big jump in capacity reaching final investment decision (FID) with 725 megawatts (MW), up from a low of 19MW in the previous quarter”.

Mr Parker welcomed the quarterly result but cautioned it is annual and multi-year trends in capacity reaching FID that provide the most reliable indicators of any changes in renewables investment.

“The Regulator is expecting the capacity reaching FID will strengthen in the second half of 2021 and into early 2022. It maintains its estimated range of 2 to 3 gigawatts of capacity reaching FID this year,” Mr Parker said.

Small-scale rooftop solar accelerated in the quarter with an estimated 800 MW installed, up 18% on the June 2020 quarter.

Mr Parker said that while COVID-19 lockdowns in some jurisdictions meant total capacity installed by the end of the year was now likely to be just over the 3 gigawatts, 2020 had demonstrated the ability of the solar industry to rebound strongly once restrictions are eased.

Voluntary demand for Australian units and certificates also continued to strengthen with 530,000 ACCUs and Large-scale Generation Certificates (LGCs) cancelled in the quarter, up 39% from the June 2020 quarter. This excludes 2.2 million LGCs cancelled by the ACT Government against its 100% renewable electricity target.

More information can be found in the Clean Energy Regulator’s Quarterly Carbon Market report – June Quarter 2021

Source: Australian Government

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