The Clean Energy Regulator has awarded contracts for 50.5 million tonnes of abatement at an average price of $10.23 per tonne in the third Emissions Reduction Fund (ERF) auction was held on Wednesday 27 and Thursday 28 April.
This result represents an increase in the volume of abatement purchased and a decrease in the average price per tonne, continuing the trend set by the previous auctions.
The CER bought 77 per cent of the volume of abatement offered below the benchmark price at this auction, in line with the variable volume threshold.
Across the whole portfolio from the three auctions held to date, the regulator has committed a total of $1.7 billion to 309 contracts covering 348 projects, which will deliver more than 143 million tonnes of abatement at an average price of $12.10 per tonne.
The CER has published details of all these projects and contracts on a new interactive map of Australia, which provides an ‘at a glance’ view of the location, Australian carbon credit units issued and method type of registered projects.
“Ahead of this auction we informed the market we would not chase volume at the expense of price. The market response resulted in an exceptional outcome on both fronts,” Clean Energy Regulator Chair Chloe Munro said.
Abatement committed at this auction will be delivered under 73 carbon abatement contracts for a total value of $516 million.
“Our objective is simply to purchase as much abatement as we can with the funds available. All three auctions have exceeded our expectations in this regard.
“It’s clear the market is maturing, and finding new opportunities to offer substantial volumes of abatement at lower costs,” Ms Munro added.
Around $816 million of the $2.55 billion allocated to the ERF remains available for future purchases.
THE CER has restated its intention to hold another auction in the final quarter of 2016, adding that it will consider adjusting the format for this auction to achieve even better value.
“The results of this auction provides great encouragement for future participation and reinforces the benefits of vigorous competition,” Ms Munro added.