Permanent exit arrangements

The permanent exit arrangement allows fixed delivery carbon abatement contract holders to fulfil their contractual obligations through a discounted exit payment instead of delivering Australian carbon credit units (ACCUs).

Sellers who deliver at least 25% of the outstanding volume of ACCUs (as at 1 January 2025) receive a 60% discount on their exit payment.

The discount acknowledges that market and policy settings have changed since the introduction of carbon abatement auctions and fixed delivery contracts in 2015. 

Before you apply

Eligibility

To qualify, you must have:

• entered into the Fixed Delivery Exit Arrangement Variation Deed, which required:
  • engaging in good faith negotiations to revise the delivery schedule to be consistent and periodic
  • committing to fulfil all outstanding contractual obligations by 31 December 2030
  • accepting that no further changes to the delivery schedule are permitted – this means that the 20% undelivered carry over provision in existing contracts will no longer apply
  • committing to deliver at least 25% of the outstanding contractual volume (as at 1 January 2025) to be eligible for a 60% discount on exit payment
• resolved any outstanding delivery failures and paid any outstanding exit payments
• submitted a benefit sharing declaration form and provided evidence showing you’ve met the benefit sharing requirements (where applicable). 

Fulfilling your contract obligations

To fulfil your contract obligations under the permanent exit arrangement, you must deliver and pay the exit payment with respect to your outstanding contracted volume by 31 December 2030.

We will not negotiate delivery schedules after you have entered into the Fixed Delivery Exit Arrangement Deed. 

This timeframe for fulfilling obligations by 31 December 2030 considers that most fixed delivery carbon abatement contracts were entered into between 2015 and 2020 for initial durations of 7 to 10 years.

Fixed Delivery Exit Arrangement Variation Deed

The objective of the new contract exit arrangements is to provide a consistent, sustainable and equitable approach to managing obligations under fixed delivery carbon abatement contracts. 

The Fixed Delivery Exit Arrangement Variation Deed streamlines and amends some contract terms to reflect the requirements of the permanent exit arrangement. In summary, these changes include:

• a 60% discount on the exit payment after at least 25% of the outstanding contractual volume (as at 1 January 2025) has been delivered – this affects how the exit payment will be calculated upon submission of a Fixed Delivery Exit Application
• a streamlined calculation process for Buyer's Market Damages (BMD) to reduce overall administrative costs where we are required to calculate BMD under the contract
• amendments to the negotiation mandate requiring renegotiation of delivery milestones where a seller has agreed to the permanent exit arrangement terms through the variation deed
• the 20% undelivered carry over provision will no longer be available
• a delivery schedule that provides a consistent and periodic pathway to fulfilling contractual obligations without backloading contracted volume
• delivery schedules can’t be rescheduled once the variation deed is entered into.

Our contract management principles have also been updated to reflect the above changes and to clarify the obligations under the deed. As part of this update, sellers that don’t act in accordance with the agreed variation deed can expect us to seek the full damages outlined in the deed, in relation to the simplified exit payment process.

The execution requirements for the variation deed differ for corporations and individuals.

• Corporations: electronic execution is permitted, provided it complies with section 127 of the Corporations Act.
• Individuals: wet ink signatures are mandatory. This is because carbon abatement contracts are governed by ACT law, and the variation deed cannot be executed electronically under these provisions. 

How to fulfil your contract obligations

Follow these steps to fulfil your contract obligations under the permanent exit arrangement.

Expressions of interest to participate in the permanent exit arrangement have closed.

Example scenarios

Background

Carbon abatement contracts are commercial agreements between the Clean Energy Regulator (acting on behalf of the Commonwealth of Australia) and a seller. Fixed delivery contracts are linked to at least one ACCU Scheme project. However, ACCUs may be sourced from many projects or from the private market to meet delivery obligations.

On 4 March 2022, changes were announced to the Commonwealth Government administration of fixed delivery contracts. Under the initial pilot fixed delivery exit arrangement, the government piloted 4 windows that allowed sellers to meet their contractual obligations without delivering ACCUs. Instead, sellers could make an exit payment based on their contract price and the number of outstanding ACCUs for a given milestone. 

The fourth pilot window trialled a partial delivery requirement where sellers had to deliver at least 20% of their milestone before being eligible to exit the remaining milestone volume. The process was conducted in accordance with existing carbon abatement contract terms. 

The pilot fixed delivery exit arrangement was in response to a maturing ACCU market with many buyers and provided an orderly transition towards a more flexible contract management framework. To support this transition and mitigate instability generated by these changes, we also agreed to temporarily reschedule delivery milestones, with the most recent extension to the end of 2025. 

This new permanent exit arrangement process allows government to maximise ACCU supply for the Safeguard Mechanism, while also providing increased flexibility in how sellers use their own generated ACCUs to best position Australia in meeting emissions reduction objectives.

Safeguard facilities and permanent exit arrangements

Exiting a contract delivery milestone does not count as delivery of ACCUs to the Commonwealth for the purposes of the Safeguard Mechanism (i.e. ‘deemed surrender’) and will not reduce the net emissions number of a safeguard facility.

The facility emissions can only be reduced through:

• surrender of ACCUs and Safeguard Mechanism credit units to the Commonwealth by the facility
• sale of ACCUs to the Commonwealth under an eligible carbon abatement contract.

For more information about the Safeguard Mechanism, please contact safeguardbaselines@cer.gov.au.

Market information

The volume of ACCUs released under exit arrangements are published on the carbon abatement contract register to support transparency and inform market decisions. 

To further support this market transparency, we have added the following data to the contract register from August 2026:

• outstanding contract volume as at 1 January 2025 – shows the baseline volume of ACCUs remaining under fixed delivery contracts 
• ACCUs delivered since 1 January 2025 – shows progress towards eligibility for discounted exit payments 
• ACCUs exited since 1 July 2026 – shows the volume of contractual obligations met through the permanent exit arrangement rather than through ACCU deliveries.

The additional information published on the contract register is intended to provide greater insight into ACCU supply and demand dynamics across the market while balancing commercial sensitivities. 

Carbon abatement contracts are commercial arrangements, and participation in the permanent exit arrangement is voluntary. Consequently, there are limits to the information we can publish about the circumstances or decisions of individual contract holders. 

As this information is provided for all eligible fixed delivery contracts, it should not be used to infer whether a particular seller has entered into, or intends to use, the permanent exit arrangement. Delivery schedules, exit outcomes and contract performance vary across contract holders, reflecting individual commercial circumstances and agreements negotiated with the Clean Energy Regulator on behalf of the Commonwealth.

Where ACCU deliveries or exits are not shown against a particular contract, this may reflect a range of factors, including agreed delivery schedules, project development timelines, or the availability of ACCUs. For example, some projects may not yet have begun reporting and claiming ACCUs. Where a seller is unable to meet their delivery obligations, we may enter into good faith negotiations to revise delivery schedules, consistent with our contract management principles.

The volume of ACCUs released from contractual obligations should also not be assumed to represent ACCUs immediately available to the market. Sellers may have existing commercial arrangements with private buyers, meaning ACCUs released from contractual obligations may not become available on the spot market.

The Quarterly Carbon Market Report provides further information on ACCU holdings and trading.

Market projections

To further support market transparency, every 6 months we publish projections of expected ACCU deliveries and exits under fixed delivery carbon abatement contracts. These projections represent the minimum volume of ACCUs expected to be delivered or exited over the following 6 months based on contractual commitments at the time of publication. Actual volumes may be higher where sellers deliver ACCUs or submit exit applications ahead of schedule.

Projections are updated in February and August each year and are accompanied by actual delivery and exit outcomes for the previous reporting period. This provides a continuing view of how contractual obligations are being fulfilled through ACCU deliveries and the permanent exit arrangement through to 2030.

Projected deliveries over next 6 months (Jul–Dec 2026)

Previous deliveries following the announcement of the permanent exit arrangement

Previous exit windows

Insights from previous exit windows have shaped the development of the permanent exit arrangement. This new process marks a significant shift from the traditional implementation and management of fixed delivery carbon abatement contracts, offering greater flexibility for eligible sellers. 

Outcomes from previous exit windows are detailed below.