Carbon Match Market Update: 15 June Auction Clears at $76

Last week’s Government NZU auction has just taken place, clearing at $76.00. That represents a solid result, at a slight discount to the previous month’s average Carbon Match Last/Settle of $76.69.

A total of 6,131,700 were purchased, comprising the scheduled volume for the quarter of 4.825 million and the residual cost containment reserve of 1.3067m.

The Q1 (March) Auction, at $70 flat, cleared at a significant discount to secondary market spot prices, which on Carbon Match, had averaged $78.53 over the month prior.

Despite this, competition for volume took out most of the cost containment reserve (which is essentially an extra 7 million units buffer for calendar 2022, able to be made available at a trigger price of $70). Some 10.4 million units changed hands at the Q1 auction.

The 15 June auction reserve price was expected to be set by default at $70 as required by regulation, given that the secondary market has sustained well above this level since January this year.

It sees the calendar 2022 CCR fully exhausted with two further auctions to go this year.

While last week’s auction saw lower overall levels of participation than in Q1, a greater proportion may be disappointed – it has left 17/26 participants successful in procuring some volume, compared with 30/32 in the Q1 auction. There were 316 bids in total, compared to the 477 bids in Q1. Total units bid for today were 10.05 million – a little less than the 11.73m bid for in March.