Australia Carbon Trading and Offsets Market Size, Share, Growth and Forecast, 2025-2035

Safeguard surrenders turn ACCUs into a compliance commodity

The Australia carbon trading and offsets market was valued at USD 812.5 million in 2025 and is projected to increase from USD 939.9 million in 2026 to USD 3.44 billion by 2035, registering a CAGR of 15.51% during 2026–2035. Demand comes from Safeguard facilities that surrender Australian carbon credit units and Safeguard Mechanism credit units each year, from Commonwealth contract deliveries and from corporate buyers that cancel units for voluntary claims. Eastern Australia held the largest regional share, 58.3% in 2025, because most corporate buyers, brokers and intermediaries trade from the eastern capitals. Western Australia is the fastest-growing region at 16.20% a year, as mining and gas facilities face declining baselines. The move of all units into a blockchain registry in November 2025 and the arrival of physically delivered futures have also changed how sellers and buyers settle trades.

Which unit transactions does the estimate count?

The estimate measures the value of transactions in Australian carbon credit units and Safeguard Mechanism credit units, including spot purchases, fixed-price forward deliveries and option premiums. It counts units sold by project developers, financial intermediaries and corporate sellers to Safeguard buyers, Commonwealth procurement programs, non-Safeguard buyers and trading counterparties.

The estimate excludes renewable energy certificates, international units, project development fees and advisory income. The value chain runs from registered projects and the national registry through bilateral deals, brokers and exchanges to compliance buyers, which surrender units to cover emissions above each facility baseline before the April 1 deadline.

ACCU contracts and brokered deals hold most traded value

Why do ACCU contracts dominate traded value?

Based on product type, the market is categorized into ACCU contracts, SMC contracts and mixed ACCU-SMC contracts. ACCU Contracts led with a 78.0% share of 2025 value, because ACCUs remain the main unit that Safeguard facilities surrender and that corporate buyers cancel. Mixed ACCU-SMC Contracts grow fastest at 17.47% a year, as buyers bundle both units to cover each annual obligation at the lowest delivered cost.

How do Safeguard buyers shape unit demand?

Based on customer segment, the market is categorized into Safeguard buyers, Commonwealth procurement, non-Safeguard buyers and trading counterparties. Safeguard Buyers led with a 52.0% share of 2025 value, because 139 facilities surrendered units for the 2024-25 compliance period. Trading Counterparties grow fastest at 16.15% a year, as banks and trading houses warehouse units and hedge forward positions.

Which channels carry most ACCU and SMC volume?

Based on distribution channel, the market is categorized into bilateral OTC, broker-arranged OTC and exchange trading. Broker-Arranged OTC led with a 47.0% share of 2025 value, because brokers match large compliance buyers with project sellers and price method premiums. Exchange Trading grows fastest at 18.06% a year, as cleared futures and spot screens attract mid-sized buyers.

How are ACCU and SMC trades settled?

Based on revenue model, the market is categorized into spot settlement, fixed-price forward settlement and option contract consideration. Spot Settlement led with a 55.0% share of 2025 value, because most buyers take issued units for prompt surrender or cancellation. Option Contract Consideration grows fastest at 17.24% a year, as buyers pay premiums to cap the cost of units they will need after 2027.

Falling baselines and forward buying lift unit demand

How do declining Safeguard baselines lift unit demand?

Each covered facility must close a growing gap between its emissions and a shrinking limit with ACCUs or SMCs, so falling baselines translate directly into purchases. Baselines decline by 4.9% each financial year through June 30, 2030, while trade-exposed facilities can access a lower rate for three years. The Clean Energy Regulator counted 208 covered facilities and 132.8 million metric tons of covered emissions in 2024-25, equal to 29.9% of national emissions. For that period, 139 facilities surrendered 10.8 million ACCUs and 2.6 million SMCs, a 49% rise in total surrenders from 2023-24. As a result, Safeguard buyers hold 52.0% of 2025 value and anchor demand for issued units.

Why is structured carbon procurement gaining ground?

Buyers now lock in forward volumes, option caps and Commonwealth contract units instead of buying only before each surrender deadline. ASX listed physically delivered ACCU futures of 1,000 units each on July 29, 2024, aiming to show annual forward prices out to five years, according to its exchange launch release. The government announced permanent exit arrangements for fixed delivery Commonwealth carbon abatement contracts on Dec. 3, 2025, with a 60% discount on exit fees for sellers that deliver at least 25% of outstanding volume. Units held in the cost containment measure are offered to eligible facilities at A$87.72 for 2026-27. In turn, fixed-price forward settlement holds a large share of value, while options grow at 17.24% a year.

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How does broader credit origination widen supply?

New methods and first-time projects add units from waste, agriculture and native forests to the traded pool, which gives buyers a wider choice of credits. The regulator issued a record 21.7 million ACCUs in 2025 and expects 22 million to 26 million in 2026. Issuance in the first half of 2026 reached 10.9 million, with 1.5 million ACCUs going to projects for the first time, the highest first-time issuance since 2017. The government introduced a method for reducing methane from landfill gas on Nov. 28, 2025, and approved an improved native forest management method on June 25, 2026. As a result, project developers can sell from a wider mix of methods to compliance and voluntary buyers.

Why do the 2035 target and registry upgrade add momentum?

Buyers now face a longer compliance path and a simpler way to hold and move units, which supports steady growth in trade. The government set a 2035 target of a 62% to 70% reduction on 2005 emissions on Sept. 18, 2025, according to the Prime Minister's announcement. The regulator migrated 177,672,533 active and previously cancelled ACCUs into its blockchain registry in November 2025, along with the history of more than 2,000 accounts. The new registry holds ACCUs and SMCs in one place and adds multi-factor checks on transfers. In turn, exchange trading grows at 18.06% a year, the fastest channel during 2026–2035.

Futures, SMC banking and post-2030 limits reshape trade

How is the rise of cleared ACCU futures changing trade?

Buyers can now hedge future surrender needs with standard listed contracts instead of only negotiating bespoke forward deals. CME Group launched CBL ACCU futures based on the Xpansiv CBL spot market, and five contracts first traded as a block between Freepoint Commodities and Mercuria on Oct. 14, 2024, according to CME Group. ASX introduced a temporary fee waiver on its environmental futures to build early liquidity. The exchange also noted that about half of all ACCUs sat in the accounts of Safeguard or related entities. As a result, ACCU exchange and brokerage venues gain share from bilateral deals, although broker-arranged OTC still holds 47.0% of 2025 value.

Why is SMC banking an emerging shift in supply?

Many facilities that earn SMCs keep them for later years instead of selling them to other emitters, which marks a shift in how this unit reaches the market. The regulator issued 6.7 million SMCs to 54 facilities for 2024-25, down from 8.3 million to 64 facilities a year earlier. Only 2.6 million SMCs were surrendered for 2024-25, and SMC holdings stood at 11.0 million at the end of June 2026. SMC spot prices tracked ACCUs closely, reaching A$39.25 on Aug. 14, 2026, against A$39.03 for generic ACCUs. In turn, SMC contracts grow faster than ACCU contracts, as banked units return to market when baselines tighten.

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Can post-2030 baseline settings open new demand?

A steeper decline rate after 2030 would raise the number of units that facilities must buy each year, which makes the review a key demand signal. The department released its Safeguard Mechanism review consultation paper on Aug. 7, 2026, with a focus on the 2030-35 baseline decline rate. The regulator reported that ACCU holdings outside the cost containment measure reached 61.2 million at the end of June 2026, yet net growth in holdings slowed to 0.4 million in the first half, according to its June quarter 2026 market report. That compares with 5.1 million in the first half of 2024. As a result, sellers holding inventory can expect firmer demand as surrenders catch up with supply.

Is there an opening in data-rich offset portfolios?

Buyers increasingly want unit-level method, location and co-benefit records before they pay premiums for credits. Carbon pricing revenues exceeded US$100 billion in 2024, and about 28% of global emissions are now covered by a carbon price, according to the World Bank. The same release said compliance demand for carbon credits almost tripled, while voluntary demand growth was negligible. In Australia, non-Safeguard cancellations fell to 0.3 million ACCUs in the June quarter of 2026. In turn, sellers that pair registry data with emissions accounting tools can win compliance buyers that must explain their unit choices.

Unit surplus, method reviews and thin screens weigh on value

How does a large unit surplus weigh on prices?

ACCU issuance still outpaces Safeguard surrenders and voluntary cancellations each year, which keeps a large inventory in seller accounts. As a result, generic spot prices stayed near A$38 in mid-2026, which limits the value of each traded unit for developers and intermediaries. Sellers respond with forward contracts, method premiums and Commonwealth exits, which help them place volume at better terms. This pressure should ease only when annual demand overtakes supply.

Why do method reviews slow some project sales?

Buyers hesitate when a crediting method faces new limits or integrity questions, which slows some project sales. The independent assurance committee found in April 2026 that the soil carbon method needed strengthening, and soil carbon project registrations fell to their lowest level since 2023. In turn, sellers of affected units face longer deal times and wider spreads. Developers respond with tighter sampling and clearer project data, which help restore buyer confidence in forestry and land-use credits.

How does thin screen liquidity limit exchange growth?

Large compliance buyers still prefer negotiated deals that move size without shifting prices, which keeps screen activity light. As a result, listed futures and spot contracts can trade only a few blocks on many days, which deters new participants. Exchanges respond with fee waivers, market makers and block trade facilities, which help build depth over time. This challenge favors venues that can attract bank and trading house liquidity.

Why does policy uncertainty after 2030 delay contracts?

Buyers cannot yet price the baseline decline rate that will apply from 2030-31, which delays some long supply contracts. In turn, many facilities sign shorter forward deals and keep options open, which reduces the volume of multi-year supply agreements. Developers respond with flexible delivery schedules and price collars, which share risk with buyers. This uncertainty should ease once the Safeguard review sets post-2030 settings.

Eastern buyers lead while western emitters grow fastest

Why does eastern Australia hold the top share?

Eastern Australia held a 58.3% share of 2025 value and grows at 15.20% a year, because corporate buyers, brokers and trading counterparties arrange most unit purchases from the eastern capitals. Safeguard facilities in New South Wales, Victoria and Tasmania surrendered about 2.5 million ACCUs for 2024-25 across 55 facility entries, led by 1.89 million in New South Wales. As a result, the zone combines steady compliance demand with the deepest pool of voluntary and intermediary buyers.

What drives unit purchases in Queensland?

Queensland held a 19.0% share of 2025 value and grows at 15.80% a year, because coal mines and gas plants in the state face declining baselines. Queensland facilities surrendered 3.98 million ACCUs and 1.26 million SMCs for 2024-25, the largest ACCU total of any state, across 70 facility entries. The state also hosts supply, including an LMS Energy landfill gas project that has received 16,019 ACCUs. In turn, Queensland acts as both a major buyer and seller zone.

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Why do large mining and gas emitters make the west fastest?

Western Australia held a 16.0% share of 2025 value and grows fastest at 16.20% a year, because mining and gas facilities carry the largest covered emissions of any state. Western Australian facilities reported 47.2 million metric tons of covered emissions for 2024-25 across 81 facility entries. They surrendered 3.2 million ACCUs and 0.75 million SMCs for the same period. As a result, falling baselines add more purchases in this zone than in any other.

How do South Australia and the NT contribute?

South Australia and the Northern Territory held a 6.7% share of 2025 value and grow at 15.70% a year, because the zone has fewer covered facilities. Northern Territory facilities reported 7.3 million metric tons of covered emissions for 2024-25, while South Australian facilities reported 4.2 million metric tons. The regulator credited carbon capture and storage at the Moomba plant with lowering oil and gas emissions intensity. In turn, the zone buys fewer units per facility than the larger states.

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Futures listings, registry migration and contract exits

Blockchain registry and delivered futures support trade

• Blockchain registry ledgers hold ACCUs and SMCs in one Unit and Certificate Registry built on Trovio's CorTenX service, which adds richer unit data and multi-factor checks on transfers.
• Physically delivered futures settle into registry accounts at expiry, which lets buyers hedge future surrender needs and still receive real units for compliance.
• Electronic spot screens match standard ACCU contracts anonymously and provide the reference price that CBL ACCU futures settle against.
• Direct soil and biomass measurement supports issuance for soil carbon and avoided deforestation projects, which must prove carbon gains with field sampling before units are credited.

Developers, offset retailers and exchanges compete for flow

Competition combines project developers that originate units with offset retailers, brokers and exchanges that move them to buyers. GreenCollar works with land managers on carbon farming projects, while Select Carbon offers human-induced regeneration, soil carbon and environmental planting projects. AgriProve registers and manages soil carbon projects for farmers across Australia, and LMS Energy captures landfill methane at 68 sites across Australia, including a Queensland project that earns ACCUs. Climate Friendly offers carbon farming, savanna fire management and carbon credit trading services. Corporate Carbon provides project services and ownership models, and CO2 Australia delivers large revegetation projects. South Pole offers ACCU purchasing and project development, and Tasman Environmental Markets sells ACCUs and other offsets to businesses. Xpansiv runs the CBL exchange and owns an Australian environmental brokerage. Rivals compete on method mix, delivery reliability, price transparency and contract structuring for Safeguard buyers.

Which developers, sellers and venues handle ACCU flow?

Credence Research view on ACCU and SMC demand

Credence Research's view is that Australian ACCU and SMC demand will rise steadily because Safeguard baselines keep falling while emitters still lack affordable onsite abatement at scale. ACCU contracts remain the core of traded value, yet SMC bundles, options and exchange trading add the fastest growth. The current unit surplus keeps prices moderate for now, although slower growth in holdings points to tighter balances later this decade. Sellers with diverse methods, reliable delivery and clear project data should gain the most share by 2035.

How the ACCU and SMC transaction estimate was built

The report uses 2025 as the base year on a calendar basis, and market values come from the Credence Research model. That model combines regulator data on unit issuance, surrenders, holdings and spot prices, exchange releases on contract launches, and international agency data on carbon pricing. Segment splits and zone growth rates are Credence Research estimates, while zone shares follow the client-provided split. Sources used are regulator releases and data tables, government announcements, exchange and company releases and international agency publications, and no interviews or surveys were used.

Post-2030 baseline settings decide demand to 2035

The Australia carbon trading and offsets market is expected to reach USD 3.44 billion by 2035, a 15.51% CAGR during 2026–2035, as Safeguard baselines tighten and more buyers secure units through forwards, options and cleared futures. Growth should be strongest in mixed ACCU-SMC contracts, exchange trading and Western Australia, because these areas gain most from hedging needs and large emitters. A unit surplus, method reviews and post-2030 policy uncertainty could slow some sales, while the 2035 target should support demand after 2030.

Note: The depth of individual sections depends on data availability for this market. Volume, capacity, trade and other unit-based metrics are included where applicable.