The Australian Carbon Exchange project started in 2021. This project aims to:
- facilitate the emergence of an Australian Carbon Exchange to create a centralised, standardised, regulated marketplace, making it easier to trade Australian carbon credit units (ACCUs)
- develop a new, modernised Unit and Certificate Registry.
As part of this project, in December 2023, we announced that:
- we'll be working with Australian Securities Exchange (ASX) to develop a proposal for a suitable carbon exchange model for which we will undertake market consultation
- we contracted Trovio Group to develop a modernised Unit and Certificate Registry.
Unit and Certificate Registry
Work is well progressed on the new Unit and Certificate Registry – a fundamental part of the modernisation and consolidation of our IT systems.
The registry is being built on Trovio’s CorTenX – a scalable, customisable and interoperable digital registry technology designed exclusively for environmental assets. This is the ideal foundation for trading in carbon, renewable energy, and nature repair markets, fostering market innovation and growth.
The registry will provide a modern, secure, single place to hold and transfer multiple unit and certificate types. It will provide a significantly improved and seamless user experience.
The registry will also have the capability to integrate with external digital trading platforms, including the potential for exchange-trading of units and certificates.
We expect to release the initial version of the registry, ready for the issuance of Safeguard Mechanism credit units, in November 2024.
Consultation on integration of the registry with other digital platforms and a proposed carbon exchange model
We're now ready to explore how our Unit and Certificate Registry could work with other existing (or future) digital platforms and support the exchange trading of ACCUs.
We're consulting on a design of carbon market interoperability with the registry and a proposed carbon exchange model that is designed to:
- support market liquidity
- provide greater transparency and standardisation
- increase market access
- encourage the development of more sophisticated financial products and instruments.
The proposed exchange model would operate similarly to the cash equities market. ACCUs can be traded, cleared and settled using existing market infrastructure with an end-to-end solution. This would include connectivity with the new registry.
As part of this consultation, we're seeking to get a current understanding of market benefits and potential operating models. To have your say, visit carbon market infrastructure for holding and trading certificates and units.
Procurement timeline and milestones
The Australian Carbon Exchange project started in 2021.
The procurement process was made up of 2 parts:
- Part A: development of the Australian Carbon Exchange.
- Part B: development of a new and improved Unit and Certificate Register.
Respondents could respond to part A, part B, or both parts A and B.
Expression of interest (EOI)
The EOI period was 28 April 2021 to 20 June 2021. On 11 May 2021, we ran an industry briefing on the EOI process.
After the EOI period closed, we shortlisted 13 parties to participate in the Request for Proposal procurement stage. This included:
- 2 parties for part A
- 6 parties for part B
- 5 parties for both parts A and B.
This meant we could receive 7 tenders for Part A and 11 tenders for Part B.
Request for Proposal (RFP)
We released the RFP on 31 March 2022. We granted an initial 4-week extension to the deadline, followed by a further 2-week extension. These extensions were requested by potential tenderers.
The RFP period closed 11 July 2022.
Public Interest Certificate
On 30 June 2022, we issued a Public Interest Certificate in relation to the Australian Carbon Exchange procurement process.
Issuing a Public Interest Certificate means the procurement process can continue if there is a complaint. Issuing a certificate is a normal part of time-sensitive, important procurement processes.
We issued the certificate because the Australian Government wants to take quick action to address the climate crisis. If the procurement was suspended for a long time, it could affect Australia's ability to meet its climate commitments.
For more information about Public Interest Certificates, visit the Department of Finance procurement complaints webpage.
Outcome
In December 2023, we announced:
- Part A: The procurement process was closed without a successful tenderer being selected. We will be working together with Australian Securities Exchange (ASX) to develop a proposal for a suitable carbon exchange model for which we will undertake market consultation.
- Part B: We contracted Trovio Group to develop a modernised Unit and Certificate Register.