For the three months to the end of March, more than 280,000 Australian Carbon Credit Units were cancelled, a 62 per cent jump on the first quarter last year, the regulator said in its latest report. The bulk of the cancellations (more than 70 per cent) came from corporations and other organisations, illustrating the growing demand from business for carbon credits.Cancelling, or retiring, carbon credits takes them out of circulation and offsets carbon emissions.Meanwhile, a record 3.2 million ACCUs were transacted through the Australian national registry of emissions units over the three months.“These developments reflect a worldwide trend of corporations driving voluntary net emissions reduction,” the regulator noted in its report.“The Clean Energy Regulator has been informed by reliable sources (that) there are many large entities looking for the opportunity to contract large volumes of ACCUs.”This is likely to have been influenced by reports of very little available supply in the reported spot market, the regulator added.“The question is whether they will be prepared to pay the price premium project proponents will want to make it worthwhile for them to apply in the exit arrangements.”Voluntary cancellation of Large-scale Generation Certificates, or LGSs, to prove use of renewable electricity, is also ramping up materially, the regulator noted.While 5.8 million LGCs were voluntarily cancelled in 2021, already 1.2 million certificates were cancelled in the March quarter alone – which is typically the quietest period of the year. It was also four times the previous first-quarter record.The Clean Energy Regulator expects total LGC voluntary cancellations through 2022 will exceed the near 6 million LGCs cancelled in 2021, chair David Parker said. Interest in the Emissions Reduction Fund also continued in the first quarter, he added.“With 122 projects registered, (this will) potentially deliver up to 34.9 million tonnes of carbon abatement over their project lifetime.“The 14th ERF auction held on 5 and 6 April yielded a higher volume than the previous auction – 7.6 million Australian Carbon Credit Units were contracted for optional delivery at an average price of $17.35. “With recent ACCU spot prices at about $36, there is a clear signal for investment in new carbon offset projects.”Australian carbon credit prices staged a major recovery after Labor’s electoral win last month, jumping 20 per cent in the immediate aftermath. But prices remain nearly 40 per cent lower than February levels, when the market crashed after former energy minister Angus Taylor allowed fixed carbon contract holders to exit their deals with the Commonwealth to access higher prices in the secondary market.