The integrity of the government's emissions trading scheme (ETS) has been called into question.
The scheme requires big emitters to buy and hold a unit for every tonne of carbon they produce, which they can trade on a secondary market in the future as they reduce their emissions.
New units are auctioned four times a year with the minimum and maximum price of the units predetermined.
Over time the supply of units is set to decrease, causing the carbon price to rise and incentivise businesses and industries to cut their emissions.
Five million units were offered at the latest auction on 1 September, with a price floor of $20 and a ceiling of $50.
However, strong demand saw prices hit $53.85 per unit, forcing the government to release 7 million extra units from its "cost containment reserve" in an unsuccessful bid to keep prices in line.
Climate Venture Capital Fund partner Dr Jez Weston said the conservative price caps mean supply will struggle to truly meet demand.
He said the ETS was dysfunctional and open to speculators because prices would inevitably rise year on year as supply of the units declines.
"If I was a speculator and I wanted to make some money out of this it seems like really easy money."
The government will have to claw those units back over time and there will not be any surplus units available at the next auction in December.
The spot market price for the units is now $59.50, with the futures market for 2026 sitting at $68.17.
Weston said the price of carbon needed to rise, but there should be rules to prevent speculation by stopping the banking of units, and requiring buyers to use them the year they purchased them.
Jarden Securities head of commodities Nigel Brunel disagreed with the criticisms and said there was no evidence of speculation.
"No one knows who bought what, other than those who bought."
"Some of those who could have been buying up could very well be emitters who are buying up for future years to hedge their own prices."
He said the market was functioning how the government had designed it.
"The price of the carbon trades in the secondary market every day, and the price of carbon right now is $59.50 - that is the market."
Climate Change Minister James Shaw said it was raising the maximum carbon price.
"From next year the [cost containment reserve] trigger price will rise from $50 to $70 and will increase every year after that.
"The government will be introducing further changes to the ETS legislation next year on market governance, which should allay concerns about potential speculative behaviour."