What’s the value of an Australian Carbon Credit Unit (ACCU)? And what impacts the value of an ACCU? In this article we will look at the different influences that establish the costs of ACCUs, but more importantly, how you can plan your carbon farming projects to maximise benefits and returns.
But first off, it’s important you understand what an ACCU actually is.
What Are ACCUs?
ACCUs are the carbon credits issued by the Australian Government under the Australian Carbon Credit Unit Scheme, regulated by the Clean Energy Regulator (CER). Each ACCU represents one tone of carbon dioxide equivalent (tCO₂-e) either avoided or removed from the atmosphere. ACCUs are earned through establishing carbon farming projects. Once these carbon farming projects are running, they will be audited by the CER, who will determine the amount of ACCUs your project has generated. We go into detail on what ACCUs are in this article.
But first off, it’s important you understand what an ACCU actually is.
Market Types
There are two market types in Australia, the government market and the voluntary market. We’ll be talking about the voluntary market.
The voluntary market allows private buyers (i.e. companies looking to meet ESG goals) to purchase ACCUs to offset emissions. Prices in this market are typically higher than in the government market, particularly for projects with co-benefits that promote biodiversity and climate resilience.
The Method Can Affect the Price
Not all carbon farming methods are created equal. You may have seen some criticism in the media, these were often poorly designed or weakly governed projects that raised legitimate concerns about the credibility of certain carbon methods. In response to this, buyers are paying closer attention to what makes a high-integrity project and are increasingly prioritising high-quality approaches, particularly those with co-benefits.
Different methods also come with different costs, measurement requirements, and timelines; factors that influence buyer perceptions and pricing.
The Value of Co-Benefits
Projects that deliver measurable co-benefits, such as biodiversity measurement, often earn a premium.
Third party certifications such as Accounting for Nature (AfN) can boost your project’s credibility and value in the market. AfN is a framework that measures the condition of natural assets such as vegetation, soil, and biodiversity, using standardised environmental condition accounts. It certifies the broader ecological benefits of a project, which can give carbon credits a premium value to buyers that are seeking offsets supporting measurable improvements to nature.
ACCU buyers are becoming increasingly value-driven; they want high-integrity impact driven projects. If your project is regenerating native habitat for endangered species, producing high quality soil, or creating more resilient land, they are much more appealing than a standard carbon credit.
Buyers also want to invest in a story they can share. Companies are looking for projects that demonstrate tangible benefits, helping them communicate their contribution to climate and nature solutions in a meaningful way.
Different methods also come with different costs, measurement requirements, and timelines; factors that influence buyer perceptions and pricing.
Supply and Demand
The question we often hear is, how much will I earn from my carbon credits? But the answer isn’t that straight forward. Like any market, the ACCU market is shaped by supply and demand.
Corporate demand continues to grow, driven by net zero targets, improved governance and government requirements. At the same time, there is a limited supply of high-integrity credits, particularly those with verified co-benefits. You can read more about this in our recent article.
S&P analysts are predicting that within five years, Australia will face a significant shortage of ACCUs. They have also predicted that the price of carbon credits is set to hit $60 or more within the next 5 years. Read the full S&P Global article here.
Following international trends, Australia’s carbon credit demand is increasing, but there are not enough high-quality projects being developed. This imbalance is creating upward pressure on ACCU prices.
The Safeguard Mechanism reforms require Australia’s largest emitting companies to reduce their emissions, or purchase offsets like ACCUs. This is expected to further increase demand and create stronger pricing for high-integrity credits.
Start Sooner to Reap the Benefits
With carbon prices forecast to rise and demand growing for quality, nature-linked ACCUs, now is the ideal time to start your carbon farming project.
At the Carbon Farming Foundation, we support landholders at every stage of the process, from navigating the initial registration to supporting audits and ensuring you receive the best possible return on your investment. All of our projects are high-integrity and designed to deliver real, measurable co-benefits. Unlike other carbon service providers, we let landholders own all the carbon credits they earn. It’s no wonder that 100% of our customers recommend our services.
Explore our carbon farming services here.
Ready to get started? Reach out to our expert team for a free consultation here.
