auto_stories Quarterly Carbon Market Report December Quarter 2024

In 2024, schemes administered by the CER are estimated to have reduced emissions by between 69.2 and 100.6 million tonnes of carbon dioxide equivalent (CO₂-e). The estimates use different ways of calculating emission reductions from renewable energy.

Emissions reduction using grid average intensities

Using grid average emissions intensities, there were 69.2 CO₂-e of emissions reductions from CER schemes in 2024. This is 8% higher than the 64.2 million tonnes of CO₂-e reduction in 2023 and in line with our 2023 projection of 2024 emissions reductions. The 2024 is estimate based on:

• The ACCU Scheme issued ACCUs equivalent to 18.8 million tonnes of CO₂-e emissions abatement in 2024. This is 9% higher than in 2023. Each ACCU is equivalent to 1 tonne of CO₂-e emissions reduction.
• The RET is estimated to have contributed 50.4 million tonnes of CO₂-e emissions reduction in 2024. This is 7% higher than the previous year. It includes an estimated:
  • 29.0 million tonnes from the LRET.
  • 21.3 million tonnes from the SRES. This component considers the potential renewable electricity generated by rooftop solar as well as the reduction in electricity consumption from the use of more efficient hot water systems.

This is a conservative estimate as it uses the weighted average emissions intensity of the NEM and SWIS and multiples this by the MWh of renewable generation. The emissions intensity factor was 0.56 tonnes of CO₂-e per MWh in 2024, only marginally lower than the 0.57 tonnes of CO₂-e per MWh in 2023. This emissions intensity factor will fall as the share of renewables in the grid increases.

Emissions reduction using thermal displacement

Using the thermal displacement method, the emissions reduction associated with CER schemes could be as high as 100.6 million tonnes of CO₂-e in 2024.

This estimate is higher than the estimate using grid average emissions intensity as it assumes renewables are fully displacing thermal generation. Thermal generation refers to electricity generated from fossil fuels, such as coal and gas. In 2024, the emissions intensity of thermal generation was estimated to be 0.91 tonnes of CO₂-e per MWh compared to 0.56 tonnes of CO₂-e per MWh for the entire grid. This difference will continue to widen as Australia’s electricity grid decarbonises.

Projected 2025 emissions reduction

In In 2025, schemes administered by the CER are estimated to reduce emissions by between 72 and 117 million tonnes of CO₂-e.

• The 72 million tonnes of CO₂-e is based on using lower range estimates for the ACCU Scheme and the RET (of 19 million and 53 million tonnes of CO₂-e respectively) and the average emissions intensity factor of the grid.
• The 117 million tonnes of CO2-e is based on using higher range estimates for the ACCU Scheme and the RET (of 24 million and 93 million tonnes of CO₂-e respectively) and the thermal displacement method.