(Bloomberg) -- A record volume of Australian carbon credits was traded in the second quarter in a sign that the market is maturing in the face of increased scrutiny.

A total of 5.5 million credits was traded in the second quarter, up almost 400% from the same period last year, the Clean Energy Regulator said Thursday in a report. Anticipated future demand for credits following the announcement of tougher climate targets and changes to the Safeguard Mechanism boosted transactions, the watchdog said.

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Demand for Australian Carbon Credit Units has been strong since elections in May on expectations that the new Labor government will reform the Safeguard Mechanism, the nation’s primary instrument for controlling emissions from large polluters. Spot prices also rallied right after the climate-focused election. 

“Our modeling attributes this to large inflows from traders and investors, along with continued voluntary uptake from large corporates,” said Hugh Grossman, the managing director of RepuTex, a provider of data and analysis. “More recently we have seen opportunistic buying from large traders and compliance entities ahead of changes to the Safeguard Mechanism from July 1.”

Emissions trading in Australia is still nascent in comparison to more advanced markets such as the European Union’s, with the volume traded just a fraction of the roughly 488 million tons of carbon dioxide equivalent the nation spewed out last year. The integrity of Australia’s carbon credit system has also been questioned, leading the new government to announce a six-month review led by former chief scientist Ian Chubb. 

“Uncertainty does continue to cloud the market, notably the Chubb review and potential for further supply side intervention,” Grossman said. 

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