Carbon Match Update

Posted: 13 Apr 2023

The Climate Change Commission (CCC) has released its updated advice on recommended unit volumes and price settings for the NZ ETS for 2024-2028, to be tabled today by Minister Shaw.

When the CCC's inaugural NZ ETS unit limits and price control settings advice (for the 2023-2027 period) was published on 27 July last year, NZU prices skyrocketed $10 to $82.

By year end, however, it emerged that the Government had decided not to follow certain key aspects of that advice in relation to price settings. Prices then dropped $10 to $75 and so far 2023 has seen NZU prices falling away, briefly touching a 2023 low of $54 on Carbon Match on 31 March.

Today's CCC recommendations have driven renewed buying interest, albeit that there is a lot to digest, and of course a consultation to follow from MfE sometime this quarter. (The Government must make decisions on the settings in time for the regulations to be updated by 30 September, such that new settings will come into force on 1 January 2024.)

This time around, the Commission has maintained similarly strong recommendations on price settings but now proposes quite significant additional reductions in the planned volumes scheduled for auctions in the 2026 and 2027 years.