Australian carbon credits are traded at a price multiple times higher than the current price of U.N. carbon offsets. Kyoto ACCUs may theoretically be exchanged for Kyoto units, the opposite direction exchange swap is, unfortunately, not possible.
Pursuant to media (Reuters Point Carbon) first carbon credits under Australia's domestic emission reduction scheme have traded at a price of A$22, a level almost nine times higher than the current price of U.N. carbon offsets.
As follows from the above, the exchange of Kyoto ACCUs for Kyoto units is under current market conditions entirely beyond profitability (and perspectives don’t seem to be better) but given the unexpected change in circumstances, carbon market sometimes undergoes, it may be useful for somebody dropping a few lines on legal premises for the said Kyoto ACCUs/Kyoto units swap.
Australian carbon credit units (ACCUs) are issued by the Australian Carbon Credits Administrator (the said role is performed from 2 April 2012 the Australian Clean Energy Regulator) on behalf of the Commonwealth. An ACCU which has been issued by the Administrator is personal property and, subject to the relevant provisions, transmissible by assignment, by will and by operation of law. The value of that unit is determined by the demand in the market.
Kyoto ACCUs are separately recognised under the Australia carbon price scheme to enable abatement to be exported, giving Australian abatement providers access to a larger carbon market and to ensure the Australian legislation is consistent with the Kyoto Protocol rules.
Non-Kyoto ACCUs must not be exchanged for Kyoto units, as this abatement will not be reflected in Australia’s Kyoto accounts.
Kyoto ACCUs may be exchanged within the Australian National Registry of Emission Units for the following Kyoto units, subject to the Kyoto rules and any conditions set out in the regulations:
- assigned amount units;
- removal units;
- emission reduction units.
Assigned amount units and removal units may subsequently be converted to emission reduction units, if the project has been approved as a joint implementation project.
Any Kyoto ACCUs may be exchanged for an assigned amount unit.
Kyoto ACCUs that are issued as a result of net removals of greenhouse gases from activities under Article 3.3 of the Kyoto Protocol (afforestation, reforestation and deforestation) may be exchanged for removal units.
Regulations may, however, give effect to any further Kyoto rules relating to the issuance and transfer of removal units – for example there needs to be a sufficient number of Australian removal units in the Registry before exchange can take place.
Kyoto ACCUs may be exchanged for emission reduction units if the abatement was the result of an approved Joint Implementation project.
For instance proponent of the project that avoids emissions from landfill or reforestation project both eligible to generate Kyoto ACCUs may choose to receive these into his Registry account or he may exchange them for assigned amount units, depending on what market he wants to sell the credits into and where he is likely to receive a higher price.
It needs to be underlined that there is a time limit on requests for exchange of Kyoto ACCUs for assigned amount units, removal units or emission reduction units. Requests may only be made before 1 July 2013.