Forecasting future credit prices in the BOS scheme
Every serious position in the BOS scheme is a bet on the future
The BOS scheme timeframes are long, and its markets are unusually thin:
Development lead times run to years. Feasibility and planning begin three to five years before approval and construction, and the offset obligation is priced into decisions made well before any credit changes hands.
Supply cannot respond quickly. A landholder assessing a Biodiversity Stewardship Agreement is typically two years — and a substantial upfront spend — away from credits being issued and available.
Thin markets turn on a single pulse. Many credit markets are inactive or lightly traded, then reshaped by a large demand event. Conditions can transform in a quarter or grind out over five to ten years.
The decisions that will define this market in 2028–2030 are being made right now.
As far as we can tell, no forward view of where this market is going is currently available, unless you build it yourself which is time consuming and risky for most market participants.
What makes the future
Forecasting is a decision input in any market. No one predicts the future perfectly, but good decisions depend on a defensible view of where things are heading and what will move them.
What’s needed is a structured, evolving view of current and future market conditions, and of the factors that will drive them. This piece explains why that matters, how we're approaching it, and where we need the market's help.
No single number tells you where a credit market is going. A useful forecast has to hold several forces in view at once and be honest about which ones it can and cannot yet see:
Existing supply and demand dynamics — credit issuance and retirement rates, determined and in process obligations, and the balance of the two in each market.
BOS scheme reform — the direction and pace of policy change and what it implies for supply and cost
The role of the BCT, the Supply Fund and the BCF — how the pricing mechanism, government-backed supply and the charge itself shape the charge quote ceiling and the credit cost floor.
Underlying economic conditions — inflation, land values, and the level of activity in the sectors that generate demand: property, energy and infrastructure.
Some of these are observable and can be modelled today. Others are genuinely hard to call with the information currently in the public domain.
Filling the gap — with the market, not in isolation
Speargrass is building a forecasting capability for the BOS scheme to enable these decisions to be made with confidence. This includes forecasting methodology and better information inputs, complementing publicly available scheme information.
We've published a first discussion piece and need your input. The first piece looks forward at some key trends driving one of the scheme's most active markets, the White Box–Yellow Box–Blakely’s Red Gum Grassy Woodland market in the Inland Slopes IBRA sub-region.
Participants are already forming their own views on where the market sits and what happens next. That thinking is valuable, and it's largely invisible.
We're not aware of any published forecast for the scheme, which means every participant is doing this work privately and none of it is being pooled to help the scheme work better for the market and the environment.
Speargrass intends to fill that gap. But a forecast is only as good as the signals feeding it, and the best signals sit with the people transacting.
Our first input deliberately sets out its assumptions in the open and asks to be argued with. If you hold a view on forward supply, demand or pricing in a market you know well, we want to hear it.
Read the first forward look — the White Box market on the Inland Slopes — here.
