What’s shaping the ACCU market, and is Trump part of it?

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Understanding the real forces behind ACCU prices, project activity, and carbon credit confidence in 2025

This update is aimed at developers, traders and industry watchers who want a clear, current view of what’s driving the ACCU market in 2025. If you’re new to carbon credits or a landowner curious about how the market works and what it means for you, start with our beginner’s guide, Understanding prices in the carbon credit market. This deeper dive covers compliance demand, supply bottlenecks, pricing trends and emerging risks shaping the market today.

The Australian carbon credit market has had no shortage of turning points lately. From Safeguard Mechanism reforms to method updates, price caps, project delays, and even rising tariffs on imports to the US, there’s a lot going on, and it’s reshaping how people think about ACCUs (Australian Carbon Credit Units).

If you’re involved in land, industry or carbon trading, this article will help you make sense of what’s influencing the ACCU market now, what’s just noise, and what’s worth keeping your eye on heading into 2026.

Let’s start with demand

The Safeguard Mechanism is the main driver. From July 2023, around two hundred large emitters (energy, mining, manufacturing), have been required to reduce emissions by about 4.9% per year, with penalties for missing targets. That’s created a rise in demand for ACCUs, especially from businesses that aren’t able to commit to further cuts of on-site emissions, but still need to meet their baselines. In other words, compliance activity is dominating the market.

In the Quarterly Carbon Market Report for March 2025, from the Clean Energy Regulator(CER):

 

In the March quarter 2025, 30.9 million ACCUs were traded, with 90% of surrenders linked to Safeguard Mechanism compliance.

 

Not voluntary offsets, not speculation, just compliance. It’s a big shift from previous years when voluntary buyers and government auctions made up a larger part of the picture.

Supply isn’t keeping up

While demand is increasing, the number of new credits being issued is not keeping up. In 2024, about 17 million new ACCUs were issued, while more than the 8.4 million were surrendered by Safeguard entities. Many polluters however, overperformed on emissions reductions and leaned on cheaper Safeguard Mechanism Credits (SMCs).

Although it might look like there is enough supply going forwards, this is misleading. The market is being propped up by temporary factors that will not last as baselines tighten and SMC stockpiles are drawn down.

The CER is speeding up approvals and has been busy updating methods, but there’s still a bottleneck in new projects. We are seeing this particularly in soil carbon and reforestation, where the complexity of methods, combined with start-up and auditing costs, make for slow progress. There are also those waiting for clarity on the new Integrated Farm and Land Management method before they take any action.

The Regulator has noted slower-than-expected credit issuance and project registrations. Market analysts - including Evolution Trustees, Market Advisory Group and Reputex - have observed hesitancy among carbon project developers due to method uncertainty, land access issues and unclear forward pricing. Simply put, if developers cannot confidently predict future ACCU prices to base investments and contracts on, committing capital to new projects becomes more risky. That uncertainty is slowing the pace of new credit generation.

What about prices?

Spot prices for generic ACCUs climbed above $42 earlier this year but have since dropped to around $35. That dip reflects a temporary oversupply, mainly due to lower-than-expected surrender numbers and the widespread use of cheaper SMCs.

Importantly, higher quality units, like those from environmental planting projects, are holding their value and attracting strong buyer interest. These projects are likely to remain in demand as integrity comes more into focus.

There’s also a price cap now, with the government introducing a Cost Containment Measure. If ACCU prices rise above AUD 82.68 per tonne in 2025–26, liable entities under the Safeguard Mechanism can buy fixed-price credits directly from the CER. These can only be used for immediate surrender rather than resale, putting a limit on how far market prices can climb.

That’s helped reduce speculation and volatility, but the core value drivers -credit quality, future compliance pressure, and tight supply - are still influencing the price outlook.

So, does Trump matter?

The short answer: not really, at least not yet.

As of late July 2025, Trump has re-signed executive orders enforcing a 10% baseline import tariff for most countries, and higher 15-20% tariffs for others. Australia is currently holding steady at the 10% rate, so our exporters are bracing, but not panicking. Sectors like beef, wine and aluminium are watching closely.

But this doesn’t directly touch carbon markets. ACCUs are part of Australia’s domestic compliance system which means they’re not traded internationally. There’s no export market for ACCUs as yet, and voluntary US offset buyers typically look to their own registries.

That said, there are indirect links worth noting:

  • If tariffs slow economic growth or shift commodity trade flows, demand for energy and materials in Australia may fall.

  • If that affects output from major emitters under the Safeguard Mechanism, it could lower the number of ACCUs they need to buy.

  • On the flipside, international uncertainty could also drive more interest in local decarbonisation and resilience, especially if companies want to de-risk future export bans or carbon border adjustments.

Trump’s tariffs aren’t having a direct impact on Australia’s carbon market right now, but they’re part of the larger economic picture influencing how businesses plan their investments, including in carbon.

What’s next?

A few things to watch as we head towards 2026:

  1. New methodologies
    The updated soil carbon method and proposed biodiversity co-benefit approaches could open up new project types, if the Regulator can streamline the process. Keep an eye on avoided clearing, integrated farm systems and updates to plantation rules.

  2. Liable entity strategies
    Large emitters are getting more sophisticated. Some are buying early and locking in contracts, while others are sitting back, watching prices and relying on a price cap. Either way, the regulated companies now set the tone.

  3. Project developer response
    With prices rising and supply short, developers have room to move, but they need better land access, faster approvals and more upfront clarity. We may see new models emerge to address the shortfalls.

  4. Nature repair overlap
    The Nature Repair Market is meant to be voluntary, but if credits in this space gain more traction, we could see new pricing models and stacked benefits that change how ACCU project returns are assessed.

  5. Global pressure
    Whether it’s Trump, carbon border taxes in Europe or emerging international frameworks, the trend is toward embedded emissions scrutiny. This means more companies judged not just on their direct emissions, but on the emissions hidden in the things they buy and sell. Companies won’t just need credits, they’ll need the right ones, with traceability and integrity.

A final thought

The ACCU market isn’t niche anymore. It’s becoming a mainstream compliance tool, a way for companies to improve their reputation, and a real source of income for landholders. But as it grows, things are getting more complex and the risks are increasing.

If you’re in the market now, as a carbon project developer, credit buyer or just a curious observer, it pays to understand what’s driving value. At the moment, the market is being moved by compliance needs, tight credit supply, and how much confidence buyers have in the credits themselves.

Tariffs and geopolitics might make headlines, but the core story is still local. It’s still land-based and it’s moving fast.

It’s important not to confuse low surrender numbers with weak demand. Many polluters overperformed in cutting emissions this year and opted for cheaper SMCs instead of ACCUs. That’s a short-term blip, not the full demand picture.

Projects with stronger integrity, like environmental planting, are also likely to see more demand over time, as buyers grow more selective and quality becomes a bigger part of price.

References

Want to know more?

If you’re new to carbon credits or a landowner curious about how the market works and what it means for you, start with our two part beginner’s guide, Understanding prices in the carbon credit market.

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