Can I Still Sell My Carbon Credits if a Government Auction Fails?

Government carbon auctions often make the news, particularly when an auction fails to sell any units. But what does that actually mean for the NZU price, and does it affect a forest owner’s ability to sell their carbon credits?

Who Needs to Buy NZUs?

Under the New Zealand Emissions Trading Scheme (NZ ETS), businesses covered by the scheme—such as fuel retailers and electricity generator-retailers—must surrender one New Zealand Unit (NZU) for each tonne of emissions they report.

These businesses can buy NZUs through Government auctions or from existing unit holders in the secondary market.

How Do Government NZU Auctions Work?

The Government schedules four NZU auctions each year and offers a set number of units for sale.

Participants submit bids stating how many units they want and the price they are willing to pay. If enough acceptable bids are received, the auction clears and all successful bidders pay the same final clearing price.

However, bids must meet the Government’s auction floor price. This is designed to prevent the Government from releasing new units materially below its chosen price settings.

Why Do Government Auctions Affect NZU Prices?

The Government controls how many new units are offered at auction.

If fewer units are released, supply may tighten and place upward pressure on prices. If additional units enter the market, that can ease pressure.

Auction settings also send a signal about Government policy and how scarce NZUs may become in the future. This means auctions can influence expectations even when most day-to-day trading happens elsewhere.

Is the Auction Floor the Minimum NZU Price?

No. The auction floor only applies to units sold by the Government.

Privately held NZUs can still trade below this level in the secondary market, where prices are set by buyers and sellers.

This helps explain why the March and June 2026 auctions received no bids. The auction floor was $71 per NZU, while units were available on the secondary market for around $52–$53. Buyers could purchase them more cheaply elsewhere.

What Happens to NZUs That Do Not Sell?

Unsold units may be carried forward to another auction later in the same calendar year, subject to the auction rules. This could increase the number of units available if demand returns.

However, an unsuccessful Government auction does not close or suspend the wider NZU market.

Can Forest Owners Still Sell Their NZUs?

Yes. Forest owners can continue selling NZUs through the secondary market regardless of whether a Government auction clears.

Carbonfields has completed NZU sales throughout the year despite the unsuccessful Government auctions. For landholders, the important distinction is that the auction market and the secondary market are connected—but they are not the same thing.