Australian Certificate Markets – March Update.
- Hamish McGovern
- April 1, 2026
- News
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. | $22.60 | $24.50 | $22.00 – $24.50 | ↑ Late surge |
| VEECVictorian Energy Efficiency Certificate | $82.75 | $84.00 | $82.00 – $84.00 | ↑ Compliance buying |
| 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. | $36.25 | $36.15 | $36.15 – $36.85 | ↔ End of safeguard buying |
| STC | $39.60 | $39.65 | $39.60 – $39.65 | ↔ Stable |
| LGCLarge-scale Generation Certificate under the Australian Renewable Energy Target. More | $4.00 | $3.10 | $3.00 – $4.00 | ↓ Massive oversupply |
ESC softened to $22.00 mid-month before a sharp 31st March rally to $24.50, as an anticipated large surge in final Commercial Lighting Formula (CLFCommercial Lighting Formula) registrations only partially materialise before CLF method closed. VEECs dipped to $82.00 before compliance buying ahead of the 30 April surrender, perhaps combined with confirmation of a $100 shortfall penalty, pushed prices to $84.00 by month end. ACCUs drifted marginally – a brief rise to $36.85 on residual Safeguard Mechanism demand faded once CY2025 compliance concluded, closing at $36.15. STCsSmall-scale Technology Certificate under the Australian Renewable Energy Target. More were remarkably stable in a $0.05 band. LGCs continued their structural decline, breaching $3.00 intraday on 26 March before recovering slightly to $3.10.
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.)
- CLF Hard Close (31 March): All Commercial Lighting Formula implementations and registrations had to be completed by 31 March. Commercial lighting has been one of the highest-volume ESC supply activities – its removal is the most bullish structural development for ESC pricing in years. There are some ~20m in registered ESCs holdings ahead of the ~5.8m surrender obligation for CY2025 due October 2026.
- ESS Reform Consultations: ESIA (Northmore Gordon is a Sponsoring Member) lodged submissions to both the ESS Policy Reform and Rule Change consultations in February and met with NSW DCCEEW in person. Reform direction – including potential obligation increases and new activities – will be the dominant ESC pricing influence in H2 2026.
- Watch in April: First post-March registry data. A sharp drop in weekly creation volumes will confirm the supply removal is material.
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.)
- $100 Shortfall Penalty Confirmed (2026 & 2027): Up from $90, this reprices the tax effective market ceiling of $142.
- Targets Set: 4.4M VEECs for 2026, 4.6M for 2027. Mid-March creation volumes were tracking around the required pace.
- Industrial heat decarbonisation: The VEU is consulting on Electric Thermal Energy Storage, Gas Efficiency Upgrades, and Behind-the-Meter Biogas – targeting food & beverage, meat processing, and industrial gas users. Go-live expected Q3-Q4 2026. See our LinkedIn post for Northmore Gordon’s commentary on the proposed methods.
- VEU Strategic Review Bill: On track for Parliament H2 2026. Will enable flexible annual targets and streamline new activity introductions – the most significant VEEC policy event of the year.
- Gas Appliance Bans: All-electric requirements for new buildings from 1 January 2027; like-for-like gas hot water ban from 1 March 2027 – underpinning long-run heat pump installation demand.
- ESC Enforcement: ~$4.2M in VEECs forfeited and one business permanently suspended following an ESC investigation. The ESC’s strict enforcement stance continues, with multiple recent accreditation cancellations.
- Watch in April: Go-live announcement for the three new industrial activities.
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)
- 31 March NGERNational Greenhouse and Energy Reporting Scheme. Large energy users and greenhouse gas emitters that exceed the thresholds must report their detailed energy and emissions data each year to the Australian Clean Energy Regulator. More Reporting Deadline: Safeguard-regulated facilities were required to finalise greenhouse gas accounts. This provided demand support through March.
- Permanent Exit Arrangement (1 July 2026): Government contract holders may exit permanently from 1 July, delivering ≥25% of outstanding ACCUs at a 60% discount on the exit payment. The volume of ACCUs potentially released to the secondary market is the largest near-term supply-side risk.
- Safeguard Mechanism Review (H2 2026): Will cover decline rates, international unit eligibility, TEBA pricing, and post-2030 design. EY analysis recommends bringing the review forward – if the government responds, the medium-term ACCU price thesis shifts materially bullish.
- Watch in April: Any pre-Federal Budget signal (budget typically May) on accelerating the Safeguard review timeline.
Large-scale Renewable Energy Scheme (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 large-scale generation certificates (LGCs).) – LGCs
- LGC Structural Decline Continues: The LGC market remains under severe oversupply pressure with CER forecasting 64–66 million LGC creations in 2026 against a fixed LRET obligation of ~33,000 GWh, the structural imbalance shows no near-term resolution.
- State based Data-Centre requirements and eTES under the proposed VEU Industrial decarbonisation method may create some demand, but it is unlikely to be sufficient to impact the massive oversupply.
Small-scale Renewable Energy Scheme (SRESSmall-Scale Renewable Energy Scheme) – STCs
- 1 May Battery Deeming Step-Down: From 1 May, STC yields per home battery installation fall under new Renewable Energy (Electricity) Regulations. Expect a significant April installation rush as installers lock in higher yields – CER projects 520,000 home battery installs for 2026.
- 2026 STP Set at 11.67% (RPP 16.67%): In line with expectations; provides full-year demand certainty for the clearing house.
- New Battery Documentation Requirements (1 March): Mandatory photographic documentation for battery installations now in effect.
- Phenix Trading Permanently Suspended (5 March): CER removed a fraudulent STC creator in a coordinated cross-scheme action with NSW and Victorian regulators – part of a broader 2026 enforcement uplift.
- Watch in April: Actual battery installation volumes and any clearing house queue build-up ahead of 1 May.
For daily pricing and charts, visit Northmore Gordon’s live certificate price page.
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Who authored the Northmore Gordon 'Australian Certificate Markets – March Update' article, and what is his role?
The article was written by Hamish McGovern, Group Managing Director of Northmore Gordon.
What were the open and close prices for ESCs in the March update, and why did they move?
ESCs opened at $22.60 and closed at $24.50, trading in a range of $22.00–$24.50. The price rose due to a late surge on 31 March, as an anticipated large surge in final Commercial Lighting Formula (CLF) registrations only partially materialised before the CLF method closed.
How did VEEC prices move in March and what drove the change?
VEECs opened at $82.75 and closed at $84.00, ranging from $82.00 to $84.00. They dipped to $82.00 before compliance buying ahead of the 30 April surrender—combined with confirmation of a $100 shortfall penalty—pushed prices up to $84.00 by month end.
What happened to ACCU prices during March and why?
ACCUs opened at $36.25 and closed at $36.15, trading between $36.15 and $36.85. Prices drifted marginally, with a brief rise to $36.85 driven by residual Safeguard Mechanism demand that faded once CY2025 compliance concluded.
How stable were STC prices in March, according to the update?
STCs were remarkably stable, opening at $39.60 and closing at $39.65, trading in a narrow $0.05 band ($39.60–$39.65).
What was the trend in LGC prices during March and what caused it?
LGCs continued their structural decline, opening at $4.00 and closing at $3.10, breaching $3.00 intraday on 26 March before recovering slightly to $3.10. The movement was attributed to massive oversupply.
What is the significance of the 31 March CLF hard close for the NSW Energy Savings Scheme?
All Commercial Lighting Formula (CLF) implementations and registrations had to be completed by 31 March. Commercial lighting has been one of the highest-volume ESC supply activities, so its removal is described as the most bullish structural development for ESC pricing in years. There are roughly ~20 million registered ESC holdings ahead of the ~5.8 million surrender obligation for CY2025 due October 2026.
What ESS reform activity did Northmore Gordon participate in, and why does it matter?
The ESIA (of which Northmore Gordon is a Sponsoring Member) lodged submissions to both the ESS Policy Reform and Rule Change consultations in February and met with NSW DCCEEW in person. The reform direction—including potential obligation increases and new activities—will be the dominant ESC pricing influence in H2 2026.
What is the new VEU shortfall penalty and VEEC targets for 2026 and 2027?
The Victorian Energy Upgrades (VEU) shortfall penalty was confirmed at $100 for 2026 and 2027, up from $90, repricing the tax-effective market ceiling to $142. VEEC targets are set at 4.4 million for 2026 and 4.6 million for 2027, with mid-March creation volumes tracking around the required pace.
What new industrial decarbonisation activities is the VEU consulting on, and when might they go live?
The VEU is consulting on Electric Thermal Energy Storage, Gas Efficiency Upgrades, and Behind-the-Meter Biogas, targeting food & beverage, meat processing, and industrial gas users. Go-live is expected in Q3–Q4 2026.
What gas appliance bans are coming into effect and when?
All-electric requirements for new buildings take effect from 1 January 2027, and a like-for-like gas hot water ban starts from 1 March 2027, underpinning long-run heat pump installation demand.
What enforcement action was taken related to VEECs, according to the update?
Approximately $4.2 million in VEECs were forfeited and one business was permanently suspended following an ESC investigation, reflecting the ESC's strict enforcement stance with multiple recent accreditation cancellations.
What is the Permanent Exit Arrangement for the Safeguard Mechanism/ACCUs, effective 1 July 2026?
Under the Permanent Exit Arrangement effective 1 July 2026, government contract holders may exit permanently, delivering ≥25% of outstanding ACCUs at a 60% discount on the exit payment. This is described as the largest near-term supply-side risk for ACCUs, as it could release a large volume onto the secondary market.
What does the CER forecast for LGC creations in 2026, and how does this compare to the LRET obligation?
The Clean Energy Regulator (CER) forecasts 64–66 million LGC creations in 2026 against a fixed Large-scale Renewable Energy Target (LRET) obligation of approximately 33,000 GWh, reflecting a structural oversupply imbalance with no near-term resolution.
What changes are coming to STCs on 1 May 2026 regarding home batteries?
From 1 May 2026, STC yields per home battery installation fall under new Renewable Energy (Electricity) Regulations due to a battery deeming step-down. A significant April installation rush is expected as installers lock in higher yields, with the CER projecting 520,000 home battery installs for 2026.
What was the 2026 Small-scale Technology Percentage (STP) set at, and what does it indicate?
The 2026 STP was set at 11.67% (with an RPP of 16.67%), in line with expectations, providing full-year demand certainty for the clearing house.
What enforcement action was taken against Phenix Trading in March 2026?
On 5 March 2026, the Clean Energy Regulator (CER) permanently suspended Phenix Trading, removing a fraudulent STC creator in a coordinated cross-scheme action with NSW and Victorian regulators, as part of a broader 2026 enforcement uplift.
What new battery documentation requirement took effect on 1 March 2026?
As of 1 March 2026, mandatory photographic documentation for battery installations came into effect as a new requirement under the STC scheme.
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