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What are carbon credits? And why did the price just crash?

What are carbon credits? And why did the price just crash?

In just three days, the Morrison government’s new carbon market rules have stripped $18 off the carbon spot price, which stood at $47 a tonne last Thursday.

Updated

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The price of Australia’s boutique carbon credits crashed 38 per cent to $29 in three days following the Morrison government’s move to relax rules to let carbon offset project developers break long-term contracts to cash in on high spot prices.

The cost of Australian Carbon Credit Units – a special category of carbon credits created under the controversial federal emissions reduction fund scheme – stood at $47.10 a tonne on March 3.

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Elouise Fowler
Elouise FowlerReporterElouise Fowler is a journalist for The Australian Financial Review based in the Melbourne office. Connect with Elouise on Twitter. Email Elouise at elouise.fowler@afr.com.au

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Original URL: https://www.afr.com/markets/commodities/chevron-wins-carbon-market-turmoil-explained-20220307-p5a2ia