On 29 July, the Australian Securities Exchange (ASX) launched its Environmental Futures contracts, covering ACCUs, NZUs, and Large-scale Generation Certificates (LGCs). This new offering is set to enhance price discovery and reduce counterparty risks for trading in forward delivered markets, providing more stability and transparency for market participants.
These futures contracts are designed primarily as compliance tools, offering a standardised, exchange-traded alternative to over-the-counter forward markets. Settlement is handled by the ASX, reducing counterparty risk, with daily margin adjustments based on published settlement prices.
Each contract has a fixed volume of 1,000 units, and delivery dates are aligned with relevant compliance deadlines. For example, ACCUs must be settled by 4 March to meet the 31 March compliance date. However, the inability to specify the method of ACCU generation may deter some buyers, with trades likely focusing on lower-cost ACCUs.
Read the The Australian Financial Review article (ACCU price: ASX expands into carbon, gas futures trading in transition payday (afr.com)) to learn more about how carbon and gas trading will be key drivers of the ASX’s growth plans over the next five years. This week’s debut of environmental futures contracts, including large generation certificates, Australian carbon credit units (ACCUs), and New Zealand units, marks a concerted push into opportunities around decarbonisation. The ASX is also working with the Clean Energy Regulator to facilitate direct trading of ACCUs, improving pricing transparency.
As Daniel Sinclair, the ASX’s Head of Commodities, noted, "The path to net zero and the energy transition will be uncertain, and the market is going to need products to manage the risk and the uncertainty that it brings." This move positions Australia to be a significant player in the global carbon credit market, with the potential to become one of the biggest producers of carbon credits worldwide.
At Kakariki, we're thrilled to see these advancements, as they align with our mission to support sustainable investment opportunities and drive the growth of the carbon market. The introduction of ACCU futures is a crucial step toward a more mature and efficient market, and we look forward to leveraging these tools to deliver value to our clients.
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