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Australian Certificate Markets – April Update.

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Executive Summary by Hamish McGovern, Group Managing Director

Price Summary

Certificate Open Close Range Movement/Reason
ESCAn energy savings certificate (ESC) is a tradeable certificate created under Division 7 of Part 9 of the Electricity Supply Act 1995. Each ESC represents one notional megawatt hour (MWh) of energy. $23.50 $27.25 $23.50 – $27.25 ↑ CLFCommercial Lighting Formula closure & forward supply uncertainty, even with v. large holdings
VEECVictorian Energy Efficiency Certificate $84.00 $88.00 $84.00 – $90.00 ↑ Compliance buying & heating  & cooling co-payment consultation
ACCUAn ACCU is a unit issued to a person by the Clean Energy Regulator (Regulator) by making an entry for the unit in an account kept by the person in the electronic [Australian National Registry of Emissions Units] registry. Each ACCU issued represents one tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a project. An ACCU can only be issued to a person if the person has a Registry account. $36.10 $37.80 $36.10 – $37.80 ↑ Safeguard supply tightening
LGCLarge-scale Generation Certificate under the Australian Renewable Energy Target. More $3.00 $2.05 $2.05 – $3.00 ↓ Sub-$2 territory tested; ongoing structural oversupply
STC $39.60 $39.60 $39.55 – $39.65 ↔ Stable

ESCs rallied sharply from $23.50 to $27.25 – a 16% gain – as the market digested the post-CLF supply cliff. Despite ~20 million ESCs in registry holdings against the ~6.0 million 2026 surrender obligation, weekly creation rates have fallen sharply since the 31 March commercial lighting closure (from ~750,000+ certificates per week in late March to a fraction of that in April). With the tax-effective penalty around $52, there is meaningful headroom for further price appreciation.

VEECs opened April at $84 and closed at $88, touching $90 mid-month. The 30 April retailer surrender deadline drove compliance buying, while a consultation of an increased minimum co-payment for ducted heating and cooling upgrades appears to have re-priced expectations on the supply side. Creation volumes have remained healthy and ahead of the run-rate needed for the 2026 target – making the magnitude of the price move somewhat surprising.

ACCUs gained ground from $36.10 to $37.80, supported by the Safeguard FY25 surrender data release showing covered emissions exceeded baselines for the first time and a 1.6 million YoY step-down in SMC issuance.

LGCs continued their structural decline, opening at $3.00 and closing just on $2.05 – testing sub-$2 territory for the first time. The forecast 64–66 million 2026 creations against a fixed 33,000 GWh LRETThe Large-scale Renewable Energy Target (LRET) incentivises the development of renewable energy power stations in Australia through a market for the creation and sale of certificates called la​rge-scale generation certificates (LGCs). obligation continues to weigh on the market.

STCsSmall-scale Technology Certificate under the Australian Renewable Energy Target. More remained stable around $39.60 in a tight ±$0.05 band – supply and demand are well balanced under the 2026 STP.

For daily pricing and charts, visit Northmore Gordon’s live certificate price page.

Regulatory Update – Program by Program

NSW Energy SavingsElectricity or gas savings or both. Scheme (ESSThe NSW Energy Savings Scheme (ESS) provides financial incentives to install, improve or replace energy savings equipment and appliances in NSW households and businesses. The ESS was established in 2009. Financial incentives are in the form of tradeable certificates, called energy savings certificates (ESCs). Generally, householders and businesses who fund energy savings activities transfer the right to create ESCs to Accredited Certificate Providers (ACPs) in return for a discount on the cost of the energy savings activity.  The MWh savings from the project determines the number of ESCs that can be created. The ESS works by allowing ACPs to create and register ESCs for energy savings that are supported with appropriate evidence. ESCs are then purchased each year by mainly electricity retailers operating in NSW to meet their share of a legislated annual energy savings target.)

Victorian Energy Upgrades (VEUVictorian Energy Upgrades is a Victorian government energy efficiency program that gives every Victorian household and business the opportunity to receive rebates or discounts on energy saving products.)

Safeguard Mechanism / Australian Carbon CreditA certificate that is equivalent to 1 tonne CO2-e. Credits often refer to instruments issued under a cap and trade scheme, where companies are allocated credits up to their emission cap. If they exceed the cap they need to purchase more credits. Units (ACCUs)

Large-scale Renewable Energy Scheme (LRET) – LGCs

Small-scale Renewable Energy Scheme (SRESSmall-Scale Renewable Energy Scheme) – STCs

For daily pricing and charts, visit Northmore Gordon’s live certificate price page. 

This newsletter is published by Northmore Gordon Environmental Pty Ltd (ABN 45 160 805 649, AFSL 533927) for general informational purposes. It contains factual market information and commentary on Australian environmental certificate markets. It does not constitute financial product advice, investment advice, or a recommendation to acquire, hold or dispose of any financial product, and has been prepared without considering any client’s objectives, financial situation or needs. Information is drawn from sources believed to be reliable but is not warranted as accurate or complete. Past prices and market movements are not indicators of future performance. Wholesale clients seeking tailored advice on environmental certificate are welcome to contact Northmore Gordon at 1800 878 500.

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Who wrote the Northmore Gordon 'Australian Certificate Markets – April Update' and what is his role?

The April update was written by Hamish McGovern, Group Managing Director of Northmore Gordon.

How did ESC (Energy Savings Certificate) prices move in April and why?

ESCs rallied sharply from $23.50 to $27.25, a 16% gain, opening at $23.50 and closing at $27.25 within a range of $23.50–$27.25. The rise was driven by the closure of the Commercial Lighting Formula (CLF) and forward supply uncertainty, even though registry holdings remain very large (around 20 million ESCs) against the ~6.0 million 2026 surrender obligation. Weekly creation rates fell sharply after the 31 March CLF closure, from over 750,000 certificates per week in late March to a fraction of that in April, and with a tax-effective penalty around $52 there is meaningful headroom for further price appreciation.

What happened to VEEC prices during April and what drove the movement?

VEECs opened April at $84.00 and closed at $88.00, touching a high of $90.00 mid-month (range $84.00–$90.00). The increase was driven by compliance buying ahead of the 30 April retailer surrender deadline for 2025-vintage VEECs, plus a consultation on an increased minimum co-payment for ducted heating and cooling upgrades (Activity 6), which re-priced expectations on the supply side.

What is the proposed change to the heating and cooling co-payment under Victorian Energy Upgrades?

A proposed increase in the minimum co-payment for ducted and multi-split heating and cooling (Activity 6) upgrades from $1,000 to $3,000 was floated, acting as a material catalyst that re-priced the marginal cost of supply and reinforced VEEC price rises in April. Public consultation on this closed on 29 April.

How did ACCU prices perform in April and what supported the move?

ACCUs gained ground, opening at $36.10 and closing at $37.80 (range $36.10–$37.80), driven by Safeguard supply tightening. This was supported by the FY25 Safeguard surrender data release, which showed covered emissions exceeded baselines for the first time, and a 1.6 million year-on-year step-down in SMC issuance (down to 6.7 million from 8.3 million in FY24).

What were the FY25 Safeguard Mechanism surrender figures released by the Clean Energy Regulator?

Per the CER's mid-April release, 10.8 million ACCUs and 2.6 million SMCs were surrendered for the FY25 compliance period. Facility emissions exceeded the baseline by 13.7 Mt, and SMC issuance was 6.7 million, a 1.6 million step-down from FY24's 8.3 million.

How did LGC (Large-scale Generation Certificate) prices behave in April?

LGCs continued their structural decline, opening at $3.00 and closing at $2.05 (range $2.05–$3.00), testing sub-$2 territory for the first time. The decline reflects a forecast of 64–66 million LGC creations in 2026 against a fixed 33,000 GWh LRET obligation, which continues to weigh on the market.

What is the outlook for STC prices as reported in the April update?

STCs remained stable, opening and closing at $39.60, within a tight range of $39.55–$39.65 and moving in a ±$0.05 band. Supply and demand are described as well balanced under the 2026 Small-scale Technology Percentage (STP).

What changes are coming to the Cheaper Home Batteries Program from 1 May 2026?

From 1 May 2026, the rebate for solar batteries under the Cheaper Home Batteries Program will decline every 6 months instead of annually, and will be tiered by system size: 100% for 0–14 kWh, 60% for 14–28 kWh, and 15% for 28–50 kWh. Larger battery systems will earn materially fewer STCs from this date, and the government continues to purchase battery STCs through a separate buy mechanism.

What is the Permanent Exit Arrangement for ACCU government contract holders?

From 1 July 2026, government contract holders may exit permanently, delivering at least 25% of outstanding ACCUs at a 60% discount on the exit payment. The volume potentially released to the secondary market through this arrangement remains the largest near-term supply-side risk for ACCUs.

What new Safeguard Mechanism developments occurred regarding savanna fire management methods?

Two new savanna fire management (SFM) methods commenced on 11 April, with government estimating approximately 180 Mt CO2e of abatement over 25 years and $7.7 billion of potential value for Northern Australia. These new methods are designed to deliver stronger benefits to First Nations communities, and earlier SFM methods are being revoked.

What is the NSW ESIA Snapshot Report about, and who was it provided to?

The Energy Savings Industry Association (ESIA) published a Snapshot Report detailing the impact of recent activity changes in the NSW Energy Savings Scheme, including job losses, stranded investment, sharp revenue declines, and loss of specialised delivery capability. The report has been provided to NSW DCCEEW officials.

What are the legislated ESS targets for 2026–2028 and what do they mean for ESC supply?

The NSW Energy Savings Scheme (ESS) targets for 2026, 2027 and 2028 are legislated at 11.0%, 11.5% and 12.0% respectively, equating to roughly 6.0 million, 6.3 million and 6.5 million ESCs. With approximately 20 million ESCs in registry holdings being run down rather than replenished after the Commercial Lighting Formula closure, this points to a meaningfully tighter ESC market over 2026–2028.

Why might LGCs currently near $2 be an attractive opportunity for corporates?

With LGCs trading near $2, the page notes this is an exceptionally cost-effective time for corporates with Scope 2 reduction obligations (such as those under the Science Based Targets initiative, SBTi) or voluntary net-zero commitments to surrender LGCs, as the cost of using LGCs to address Scope 2 emissions has never been lower for large manufacturers.

What key events and reports should market participants watch for in May regarding these certificate schemes?

Items to watch in May include: continued NSW ESS registration data and any DCCEEW policy signals; the hydronic space heating consultation closing 22 May and the ESIA VEU Seminar in Melbourne on 21 May; the Federal Budget and CER Q1 2026 Quarterly Carbon Market Report along with pre-1 July signals on ACCU permanent exit volumes; Net Zero Fund registrations of interest ($5bn fund) and Q1 2026 QCMR LGC creation volumes; and actual post-1 May battery installation volumes along with clearing house queue dynamics for STCs.

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