The latest report by IMARC Group, “Australia Carbon Credit Market Size, Share, Trends and Forecast by Type, Project Type, End-Use, and Region, 2025-2033,” provides an in-depth analysis of the Australia carbon credit market. The report also includes competitor and regional analysis, along with a breakdown of segments within the industry. The Australia carbon credit market size reached 18.35 million ACCUs in 2024 and is projected to grow to 32.16 million ACCUs by 2033, exhibiting a steady growth rate of 6.43% during the forecast period.
Report Attributes and Key Statistics:
Base Year: 2024
Forecast Years: 2025-2033
Historical Years: 2019-2024
Market Size in 2024: 18.35 Million ACCUs
Market Forecast in 2033: 32.16 Million ACCUs
Growth Rate (2025-2033): 6.43%
Australia Carbon Credit Market Overview:
The Australia carbon credit market is experiencing steady growth driven by favorable government policies including Emissions Reduction Fund (ERF) and Safeguard Mechanism creating regulatory framework for Australian Carbon Credit Units (ACCUs) generation and trading, increased corporate commitment to sustainability with businesses across mining, energy, manufacturing, and agriculture adopting ambitious net-zero emissions pledges, and expanded international trade prospects as Australian carbon credits gain global recognition opening new revenue streams. The market demonstrates robust momentum fueled by international climate commitments under Paris Agreement incorporating carbon credits as essential emissions balancing mechanism, land sector involvement with expansive rangelands, agricultural regions, and forests providing natural carbon sequestration opportunities particularly in Northern Australia and Western Queensland, and Indigenous community engagement controlling vast land areas implementing traditional knowledge for sustainable management earning credits while advancing ecological outcomes. Strategic expansion is supported by financial sector engagement with banks, investment houses, and superannuation funds viewing carbon credits as legitimate asset class, carbon credit exchanges and blockchain-based tracking platforms improving transparency and liquidity, and EY analysis suggesting ACCU prices could double to AU$75 before 2035 driven by strengthened demand and supply dynamics.
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Australia Carbon Credit Market Trends:
• ACCU Price Strengthening demonstrating market resilience as Generic spot ACCUs reached AUD 35 in May 2025 climbing from AUD 32.50 in March with four-month high reflecting growing demand
• Land-Based Project Dominance expanding through reforestation, soil carbon increase, and savanna fire management particularly in Northern Australia and Western Queensland leveraging natural resource capabilities
• Financial Asset Integration advancing as institutional investors incorporate carbon credits into diversification strategies, green investment models, and financial risk approaches recognizing long-term return potential
• Indigenous Participation growing with traditional landowners using cultural knowledge for sustainable land management generating credits while achieving ecological and cultural objectives
• Blockchain Transparency enhancing market confidence through digital tracking platforms improving ACCU transaction transparency, verification processes, and market liquidity attracting institutional participation
• Registry Modernization progressing with Clean Energy Regulator implementing enhanced ACCU viewing and filtering by attributes including project methods improving market efficiency from November 2025
• Voluntary Market Growth expanding beyond compliance requirements as corporations pursue ESG goals, sustainability reporting standards, and stakeholder expectations driving voluntary credit purchases
Australia Carbon Credit Market Drivers:
• Emissions Reduction Fund creating substantial demand through financial incentives for businesses, landowners, and communities adopting practices reducing greenhouse gas emissions generating tradeable ACCUs
• Safeguard Mechanism enabling compliance market as baseline emissions for large industrial facilities requiring companies exceeding limits to purchase ACCUs offsetting excess emissions
• Corporate Sustainability Goals motivating credit adoption as ESG standards, sustainability reporting requirements, and stakeholder pressures drive meaningful emissions reduction steps across industries
• International Trade Recognition supporting export opportunities as Australian carbon credits accepted in global markets particularly Asia-Pacific regions with stringent environmental regulations and corporate pledges
• Paris Agreement Commitments facilitating market integration as international climate obligations require demonstrable emissions reductions positioning carbon credits as essential accountability mechanism
• Natural Resource Advantage enabling sequestration projects through Australia’s vast rangelands, forests, and agricultural areas providing perfect locations for nature-based offset initiatives
• Carbon Border Mechanisms driving competitiveness requirements as export-oriented mining and agriculture sectors need low-carbon credentials maintaining access to carbon-vigilant markets like European Union
Market Challenges:
• Price Volatility creating uncertainty as ACCU spot prices fluctuating between AUD 32.50 to AUD 35.50 in early 2025 affecting project investment decisions and long-term planning
• Project Development Complexity constraining participation as regulatory requirements, technical standards, and crediting methodologies create barriers particularly for smaller landholders and communities
• Supply-Demand Imbalances affecting market stability as 2025 ACCU issuances projected 19-24 million units while safeguard entity surrenders reduce ANREU holdings from 49.9M to 46.0M creating pressure
• Verification Standards requiring continuous improvement as ensuring high-integrity credits, preventing greenwashing, and maintaining international credibility demand robust monitoring and reporting systems
• Market Liquidity limiting transaction efficiency despite improvements as relatively nascent market compared to international exchanges creates challenges for large-scale institutional trading
• Indigenous Engagement necessitating cultural sensitivity as expanding participation requires appropriate benefit-sharing arrangements, capacity building, and recognition of traditional knowledge systems
• Regulatory Evolution creating adaptation requirements as policy changes, methodology updates, and international alignment demands ongoing compliance investments from project developers and participants
Market Opportunities:
• Technology-Based Sequestration developing carbon capture and storage, direct air capture, and blue carbon projects complementing nature-based solutions addressing hard-to-abate sectors
• Agriculture Carbon Farming expanding through soil carbon programs, regenerative practices, and livestock emissions reduction offering significant opportunities for rural landholders generating supplementary income
• Renewable Energy Integration combining clean energy projects with carbon credit generation creating dual-revenue streams while supporting Australia’s clean energy transition and climate targets
• International Credit Trading capitalizing on cross-border carbon market mechanisms leveraging Australia’s proximity to Asia-Pacific regions and competitive advantage in high-quality credit production
• Corporate Offtake Agreements establishing long-term purchase contracts providing price certainty for project developers while ensuring supply security for corporations pursuing net-zero commitments
• Blue Carbon Projects developing coastal and marine ecosystem restoration including mangroves, seagrass, and salt marshes offering substantial sequestration potential with biodiversity co-benefits
• Indigenous Land Management scaling traditional fire management, land restoration, and biodiversity conservation projects creating employment, preserving culture, and generating carbon credits in remote regions
Browse the full report with TOC and List of Figures: https://www.imarcgroup.com/australia-carbon-credit-market
Australia Carbon Credit Market Segmentation:
By Type:
• Compliance
• Voluntary
By Project Type:
• Avoidance/Reduction Projects
• Removal/Sequestration Projects Nature-Based
• Technology-Based
By End-Use:
• Power
• Energy
• Aviation
• Transportation
• Buildings
• Industrial
• Others
By Regional Distribution:
• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia
Australia Carbon Credit Market News:
May 2025: Generic Australian Carbon Credit Units climbed to four-month high reaching AUD 35.50 per tonne CO2 equivalent demonstrating market strength and growing demand for land restoration project credits.
April 2025: ACCU spot market strengthened across all categories with Generic ACCUs increasing AUD 1.65 to close at AUD 35.00, while HIR and No AD markets showed similar positive trajectories.
Q1 2025: Clean Energy Regulator reported ACCU issuances on-track to meet projected 19-24 million range with high crediting application volumes likely translating into stronger issuances throughout year.
Q1 2025: Safeguard mechanism holdings in ANREU fell from 49.9 million to 46.0 million driven by entity surrenders demonstrating active compliance market participation.
2025: EY Net Zero Centre analysis suggested ACCU prices could double to approximately AU$75 in real dollars before 2035 driven by strengthening demand and supply dynamics.
Key Highlights:
• Comprehensive market analysis projecting steady growth from 18.35 million ACCUs in 2024 to 32.16 million ACCUs by 2033 with 6.43% CAGR
• Detailed examination of government policy framework through Emissions Reduction Fund and Safeguard Mechanism creating regulated environment for ACCU generation
• Strategic assessment of ACCU price trends reaching four-month high of AUD 35.50 in May 2025 with EY forecasting potential doubling to AU$75 before 2035
• In-depth analysis of land sector opportunities in Northern Australia and Western Queensland leveraging rangelands, forests, and agricultural areas for sequestration
• Regional market evaluation covering Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, Western Australia
• Indigenous participation insights highlighting traditional knowledge integration for sustainable land management generating credits with cultural and ecological co-benefits
• Financial sector engagement assessment revealing institutional investors viewing carbon credits as legitimate asset class for diversification and long-term returns
Frequently Asked Questions (FAQs):
Q1: What are the primary factors driving Australia’s carbon credit market growth to 32.16 million ACCUs by 2033?
A1: The market is driven by favorable government policies through Emissions Reduction Fund and Safeguard Mechanism creating ACCU generation framework, increased corporate sustainability commitments with businesses pursuing net-zero emissions offsetting unavoidable emissions, and international trade recognition enabling Australian credit exports to global markets. Land sector involvement leveraging vast natural resources, Indigenous community engagement implementing traditional management practices, and financial sector recognition of carbon credits as asset class with EY forecasting prices doubling to AU$75 before 2035 contribute to the 6.43% growth rate.
Q2: How are government policies and regulations supporting carbon credit market development?
A2: The Emissions Reduction Fund provides financial incentives for emissions reduction practices enabling ACCU generation, while Safeguard Mechanism sets baseline emissions for large industrial facilities requiring companies exceeding limits to purchase ACCUs creating compliance demand. Clean Energy Regulator implements enhanced registry systems with improved ACCU attribute viewing from November 2025, Paris Agreement commitments incorporate carbon credits as essential emissions balancing mechanism, and carbon border adjustment mechanisms drive export sector participation ensuring low-carbon credentials for international market access.
Q3: What opportunities exist for carbon credit market expansion across project types?
A3: Technology-based sequestration including carbon capture and storage and direct air capture address hard-to-abate sectors, agriculture carbon farming through soil carbon and regenerative practices offers rural landholder supplementary income, and blue carbon projects restoring coastal ecosystems provide substantial sequestration with biodiversity benefits. Indigenous land management scaling traditional fire management and restoration creates employment while preserving culture, international credit trading leverages Asia-Pacific proximity, and corporate offtake agreements provide long-term price certainty supporting project development across compliance and voluntary market segments.
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