The Australian carbon credit market is projected to expand from USD 20.6 million in 2026 to USD 33.3 million by 2034, a compound annual growth rate of 6.17%. This growth is driven by the reformed Safeguard Mechanism, which requires Australia's largest emitters to reduce baselines by 4.9% annually, creating steady demand for ACCUs. In FY2024, 142 facilities surrendered 7.1 million ACCUs and 1.4 million Safeguard Mechanism Credits to meet their obligations. Supply is also shifting. Removal and sequestration projects now lead project types at 48.6% of the market, with human-induced regeneration and soil carbon projects across NSW, Queensland, and WA rangelands dominating. Compliance buyers account for 62.3% of the market, while the power sector leads end-use demand at 28.4%. Institutional investors like the Meldora platform and Cibus Carbon are entering the space, and the Clean Energy Regulator is upgrading its registry to improve transparency. Integrity concerns around methods like human-induced regeneration and regulatory complexity for smaller landholders remain key constraints. The recent 2026 Climate Change Authority review of the ACCU scheme and ongoing scrutiny of the Improved Native Forest Management method could shape future supply and confidence.
