Melbourne Law School - Theses

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Australian Carbon Credit Units in the Blockchain Environment – Legal Issues in Collateralised Financing Transactions

Chan, Ryan ( 2023)

The Australian voluntary carbon offset market and its native tradeable commodity, Australian Carbon Credit Units (‘ACCUs’), serve a critical role in the public and private sector’s emissions reduction strategies. This paper is not concerned with this role. Rather, it builds on the distilled view that ACCUs are a type of financial asset capable of being utilised in a variety of ways in the broader economy. After all, participants who engage with ACCUs or emissions units in general are not necessarily concerned with their carbon footprint, but in its value as an alternative investment vehicle. To date, ACCUs are not just traded on the Australian voluntary carbon offset market, but also through blockchain trading platforms, albeit in a tokenised form. This paper focuses on a particular transaction that has the potential for widespread deployment: transactions where lenders extend financing in exchange for a security interest in ACCUs or tokenised ACCUs.