Participation in the voluntary carbon market was off to a strong start in the first quarter of 2022, with the Clean Energy Regulator’s Quarterly Carbon Market Report (QCMR) revealing record levels of cancellations of carbon units and certificates.
Clean Energy Regulator Chair David Parker said Large-scale Generation Certificates (LGCs) had the largest year on year Q1 increase in both absolute numbers and percentage change. At 1.2 million certificates cancelled, this is more than three times the volume cancelled in Q1 2021.
“The Clean Energy Regulator expects total LGC voluntary cancellations in 2022 will be a further step up from the 5.8 million LGCs cancelled in 2021.”
“Interest in investment in the Emissions Reduction Fund (ERF) continued in Q1 2022 with 122 projects registered, potentially delivering up to 34.9 million tonnes of carbon abatement over their project lifetime.
“The 14th ERF auction held on 5 and 6 April yielded a higher volume than the previous auction - 7.6 million Australian Carbon Credit Units (ACCUs) were contracted for optional delivery at an average price of $17.35. With recent ACCU spot prices at about $36, there is a clear signal for investment in new carbon offset projects.”
Investment in new wind and solar power station projects also trended up over Q1 2022, with total capacity reaching final investment decision (FID) likely to increase again this calendar year.
Mr Parker said Q1 2022 was the third consecutive quarter where more than 1 gigawatt (GW) of wind and solar power stations reached FID.
“Achieving more than 3GW of new projects reaching FID in the 2022 calendar year cannot be ruled out,” Mr Parker said.
The 5-year trend of increasing annual rooftop solar capacity will end in 2022. Mr Parker noted it was always anticipated growth would eventually slow.
“The decline this year is in line with the decline in home improvements spending which boomed during the first 2 years of the pandemic.”
“We estimate added installed rooftop solar capacity in 2022 will be about 2.3 GW. This is still the third highest annual capacity ever and is higher than pre-pandemic installation rates.”
To find out more, read the QCMR.