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Australian Certificate Markets – January Update

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Executive Summary by Hamish McGovern, Group Managing Director

January is typically a quieter month for the markets, but things were moving by the second week. 

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

ACCUs, ESCs, LGCLarge-scale Generation Certificate under the Australian Renewable Energy Target. More, PRC, STC (last 12 months) – see VEECs lower down

ACCU Market Update

January price action: ACCUs started in the mid-$36s, traded to high-$37, and back to mid-$36, then finished the month just under $38.

The ACCU (and SMC) price is driven primarily by compliance requirements under the Safeguard Mechanism. Facilities emitting over 100,000 tCO₂-e per annum must reduce their emissions by 4.9% each year to 2030 or surrender ACCUs or SMCs to meet their shortfall. Reporting is done in October, application for SMC issues in January, and unit surrender by 31st March each year.

VEECVictorian Energy Efficiency Certificate Market Update

January price action: VEECs were quiet early month, trading down to $75.50, then strengthened to finish just on $81.00.

Pricing is keenly watching expected production volumes in 2026 versus lower future targets and whether the current price is high enough to generate volumes in the residential AC market.



The step-down in targets for 2026 (4.4m) and 2027 (4.6m) versus 2025 (7.3m) means less VEECs are required by retailers.  Additionally, the actual 2024 surrender (published in Nov-2025) was ~10% lower than expected (lower energy usage) meaning an 650,000 extra VEECs exist in the market.

The market is still awaiting the outcome of Strategic Review of the 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., which whilst longer term implications will likely impact prices.

LGC Market Update

January price action: LGCs started around $6.25, moved up over $7, then sold off hard to finish at $5.25 in the final few days the month.  The late-month move coincided with end of retailer buying for early February surrender, increasing near-term volatility.

The market continues to grapple with surplus conditions where supply growth has outpaced demand, with additional renewable build encouraged via mechanisms such as the Capacity Investment Scheme (CIS).  With the 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). concluding in 2030, the market remains sensitive to how voluntary market and how post-2030 policy settings evolve.

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. Market Update

ESCs began January around the low-$23s, softened briefly, and was sitting around $22.75 at the end of January.

Despite structural oversupply, ESC prices have held up better than expected. This reflects lower recent creation volumes and ongoing adjustment after the removal of some large-volume activities (including commercial lighting) from the scheme.

NSW Energy Security Safeguard has two consultations underway: the annual ESS Rule Change Review and an ESS Policy Reform, both due 20th Feb. These processes are likely to be a key near-term focus for market participants as they shape future scheme design and certificate supply/demand dynamics.https://www.energy.nsw.gov.au/nsw-plans-and-progress/regulation-and-policy/energy-security-safeguard/review-and-reform

STC Market Update

STCs have eased slightly, trading around $39.60–$39.65

The STC Clearing House surplus (5m) is weighing on spot pricing and extending Clearing House processing timelines to 2–3 weeks.

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Who authored the January 2026 Australian Certificate Markets update on Northmore Gordon's website?

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

How did ACCU prices move during January 2026?

ACCU prices firmed from the mid-$36 range into the high-$37s as the Safeguard Mechanism surrender deadline (March 2026) approached. Over the month, prices started in the mid-$36s, traded to high-$37, dipped back to mid-$36, and finished just under $38.

What is driving ACCU (and SMC) pricing according to the update?

ACCU (and SMC) prices are driven primarily by compliance requirements under the Safeguard Mechanism, under which facilities emitting over 100,000 tCO2-e per annum must reduce emissions by 4.9% each year to 2030 or surrender ACCUs or SMCs to cover their shortfall. Reporting occurs in October, SMC issuance applications in January, and unit surrender by 31 March each year.

How did VEEC prices behave in January 2026 and what factors are influencing the market?

VEECs were quiet early in the month, trading down to $75.50, before strengthening to finish just on $81.00. The market is watching how 2026–27 creation volumes track against materially lower targets, and whether current prices are high enough to generate volumes in the residential AC market. It is also awaiting the outcome of the Strategic Review of the Victorian Energy Upgrades (VEU) program, which could have longer-term price implications.

Why are VEEC targets and supply expected to change in 2026 and 2027?

The VEEC target is stepping down to 4.4 million in 2026 and 4.6 million in 2027, down from 7.3 million in 2025, meaning retailers require fewer VEECs. Additionally, the actual 2024 surrender (published in November 2025) was about 10% lower than expected due to lower energy usage, leaving an extra 650,000 VEECs in the market.

What happened to LGC prices at the end of January 2026?

LGC prices started around $6.25, moved up over $7, then sold off sharply to finish at $5.25 in the final few days of January. The late-month drop coincided with the end of retailer buying ahead of the early February surrender, which increased near-term volatility.

What structural issue is affecting the LGC market?

The LGC market continues to face surplus conditions where supply growth has outpaced demand, partly due to additional renewable build encouraged by mechanisms such as the Capacity Investment Scheme (CIS). With the Large-scale Renewable Energy Target (LRET) concluding in 2030, the market remains sensitive to how the voluntary market and post-2030 policy settings evolve.

How did ESC prices perform in January 2026 despite oversupply?

ESCs began January around the low-$23s, softened briefly, and were sitting around $22.75 by the end of the month. Despite structural oversupply, ESC prices held up better than expected, reflecting lower recent creation volumes and adjustment following the removal of some large-volume activities, including commercial lighting, from the scheme.

What NSW consultations are relevant to the ESC/ESS market, and when are they due?

Two NSW Energy Security Safeguard consultations are underway: the annual ESS Rule Change Review and the ESS Policy Reform consultation, both due by 20 February. These processes are expected to be a key near-term focus for market participants as they shape future scheme design and certificate supply/demand dynamics.

What happened to STC prices and clearing house processing times in January 2026?

STC prices eased slightly, trading around $39.60–$39.65. The STC Clearing House surplus of 5 million certificates is weighing on spot pricing and has extended Clearing House processing timelines to 2–3 weeks.

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