New Zealand carbon credit auction fails to clear again

New Zealand's quarterly carbon allowance auction failed to clear today for the second consecutive time this year, with no bids submitted as prices in the secondary market have been below the regulated auction price floor.

A total of 7.6mn New Zealand emissions units (NZUs) were left unsold on 4 September, including 4.08mn remaining from the previous two quarterly auctions of 2024, with the June sale also attracting no bids.

The secondary market closed at NZ$61.95 ($38) on 3 September, the New Zealand Stock Exchange (NZX) and European Energy Exchange (EEX) — which jointly operate the country's Emissions Trading Scheme (ETS) auction — said on 4 September. This is below the regulated auction price floor of NZ$64.

All available units will now be rolled over to the final 2024 auction on 4 December, when around 11.13mn NZUs will be offered. All unsold volumes in the year will be cancelled, adding to the 23mn units that were written off in 2023 as all four auctions that year failed.

The New Zealand carbon market has been struggling with a growing oversupply in recent years. The coalition government, following advice from the country's Climate Change Commission (CCC), announced in August it will more than halve auction volumes over 2025-29 to 21.2mn from 45mn to tackle the situation.

Auction volumes will be 6mn in 2025, with 1.5mn per quarter, while the auction price floor will rise to NZ$68.

By Juan Weik