H2OX Response to ACCC Water Markets Report

SYDNEY, NEW YORK, SAN FRANCISCO — Xpansiv market H2OX welcomes the release of the ACCC’s Murray-Darling Basin Water Markets Inquiry Final Report. We support the ACCC’s recommendations for reform, particularly the establishment of conduct-and-integrity legislation and the creation of a Water Market Agency; H2OX has been calling for regulation since our inception.

While H2OX supports these outcomes, we are disappointed the ACCC didn’t press for broader water-market reform. Many of the report’s recommendations relate to post-trade transparency, which will do little to improve critical aspects of pre-trade transparency, which influences participant decisions. We believe price discovery and liquidity—critical elements of pre-trade transparency—are key for a healthy water market.

Only one ACCC recommendation relates to this issue: the establishment of a Public Facing Water Market Information Platform. Such an idea has been attempted before by way of the National Water Market System and other state-based and private-sector initiatives, resulting in huge costs and limited benefits to most participants. A water-market-information platform is only as good as the data that supplies it, and while the ACCC recommends making significant improvements to post-trade data, pre-trade data—relating to price discovery and liquidity—is reliant on data from intermediaries. With most brokers operating paper-based, over-the-counter markets, the information related to price and water availability will remain opaque.

The ACCC has recommended meaningful, comprehensive reforms that will no doubt improve the water market. In our view, however, too many of these recommendations target only post-trade improvements. These recommendations will result in better historical pricing and volume data, offering a clearer picture to the new regulator, but will provide little benefit to an irrigator trying to discover the price of water and the amount that is available.

H2OX supports much of the ACCC’s final report, but we are concerned that it contains too few improvements to pre-trade transparency. Transparency affects every water transaction and offers the most meaningful improvement to the Murray-Darling Basin water market. By not tackling pre-trade transparency, market participants will still be forced to transact in a market rife with information asymmetry. H2OX is dedicated to the development of a market that offers a level playing field for all participants.

Lex Batters


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Xpansiv is the global market for ESG-inclusive commodities. These Intelligent Commodities bring transparency and liquidity to markets, empowering participants to value energy, carbon, and water to meet the challenges of an information-rich, resource-constrained world. The company’s main business units include CBL, the leading spot exchange for ESG commodities, including carbon, renewable energy certificates, and Digital Natural Gas™; H2OX, the leading spot exchange for water in Australia; and XSignals, which provides end-of-day and historical market data. Xpansiv is the digital nexus where ESG and price signals merge. Xpansiv.com

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