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Australian Certificate Markets – October Update

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Over the past month, 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. prices have continued to strengthen, now trading above $38, as large emitters prepare for their March 2026 surrender obligations under the Safeguard obligation. Last year’s November peak of $42.60 was followed by a sharp decline to $32.50 by March – will history repeat?

VEECs have fallen from $96 in mid-September to around $75*, levels last seen in June 2023.  The fall is driven by expectations that the new C&I Deemed Solar activity will generate significant volume amid reduced 2026/27 targets.

ESCs remain range bound at $24–$26 with oversupply persisting, while LGCs continue their long decline to $10. STCsSmall-scale Technology Certificate under the Australian Renewable Energy Target. More remain capped at $40 despite strong creation from the Cheaper Home Battery Program.

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

ACCU Market Update

The ACCU (and SMC) price is driven primarily by compliance requirements under the Australian Safeguard Mechanism. For the next six years, facilities emitting over 100,000 tCO₂-e per annum must reduce their emissions by 4.9% each year or surrender ACCUs or SMCs to meet their shortfall. This obligation aligns with Australia’s target of a 43% reduction by 2030.

Entities that emit below their baselines can register SMCs, bank them for future use, or sell them on the wholesale market.

Drivers of ACCU prices include the ongoing tightening of emissions baselines and the potential expansion of the Safeguard Mechanism to sites emitting as little as 50,000 tonnes. Further demand comes from the ERFThe Emissions Reduction Fund is a voluntary scheme that aims to provide incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their emissions. Pilot Exit arrangement, which under the fourth exit window requires 20% of ACCUs under ERF contracts to be delivered to the government to build reserves for the Cost Containment Measure (CCM). This arrangement is due to be updated for 2026.

VEECVictorian Energy Efficiency Certificate Market Update

Since the announcement of Activity 47 (C&I Deemed Solar) at the start of October, VEEC prices have dropped significantly and are now trading at $80, down from a steady $96 in mid September. This fall reflects expectations of strong volume from Activity 47 and reduced 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. targets (from 7.3 million for 2025 to 4.4 million for 2026).

While the 2025 target remains tight, the VEEC price tends to be influenced by the lowest-cost high-volume activities. At currently levels, pricing is close to or below the level required to sustain some activities such as space heating and cooling. If creation volumes slow, prices could rebound; if they do not, the current gradual decline is likely to continue.

The market’s feedback loop is slow — roughly three months between installation and certificate creation — which often leads to lagged or exaggerated reactions. Other new activities, including C&I EnMS and Home Insulation, are expected to contribute but at modest volumes.

Also pending is the Strategic Review of the VEU, which has yet to be released and will influence the program’s long-term outlook.

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

The current ESC price of $24–$25 remains surprisingly strong. At the start of the year, ESCs were near all-time lows around $12. Despite substantial oversupply — enough to satisfy demand through to late 2028 — prices have risen over the past six months following the end of lighting upgrades under the 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..

With the program legislated through to 2050, there are currently no new high-volume activities on the horizon. This scarcity helps explain why prices remain supported despite oversupply. However, each attempt to break above $26 has met strong resistance, with prices stabilising around $25. 

LGCLarge-scale Generation Certificate under the Australian Renewable Energy Target. More Market Update

LGC prices have continued to slide throughout 2025, falling from $32.50 at the start of the year to around $10 today. The decline began in mid-2024, when it became clear that LGC registrations were increasing much faster than voluntary demand, leading to a growing surplus.

This oversupply has been supercharged by the Federal Government’s Capacity Investment Scheme (CIS), which includes an additional 23–26 GW of renewable generation through to 2027.

The Australian Productivity Commission’s interim report Investing in Cheaper, Cleaner Energy and the Net Zero Transformation highlighted that new incentives are needed 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. Unless voluntary demand accelerates, further price declines appear likely.

For more information, call or email h.mcgovern@northmoregordon.com

*(subject to change)

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What was the ACCU price trading at as of the October 2025 update, and what is driving it?

According to the Northmore Gordon October update, ACCU prices had continued to strengthen and were trading above $38, as large emitters prepare for their March 2026 surrender obligations under the Safeguard Mechanism obligation.

How did the current ACCU price trend compare to the previous year?

Last year's ACCU price peaked at $42.60 in November before falling sharply to $32.50 by March, and the October update noted that with 2025 prices strengthening similarly, it remained to be seen whether history would repeat.

Why have VEEC prices fallen recently, and to what level?

VEEC prices fell from $96 in mid-September to around $75 (subject to change), levels last seen in June 2023. The fall was driven by expectations that the new Activity 47 (C&I Deemed Solar activity) would generate significant volume amid reduced 2026/27 VEU targets. The article also notes VEECs were trading at $80 shortly after the Activity 47 announcement, down from a steady $96 in mid-September.

What is Activity 47 and how is it affecting the VEEC market?

Activity 47 refers to Commercial & Industrial (C&I) Deemed Solar, a new activity announced at the start of October. Its announcement caused VEEC prices to drop significantly because the market expects strong volume from this activity, combined with reduced VEU targets (from 7.3 million for 2025 to 4.4 million for 2026).

What is the current price range for ESCs and why do they remain relatively strong despite oversupply?

ESCs were range-bound at $24–$26 as of the update. Despite substantial oversupply — enough to satisfy demand through to late 2028 — prices rose over the past six months following the end of lighting upgrades under the NSW Energy Savings Scheme (ESS), and with no new high-volume activities on the horizon and the program legislated through to 2050, scarcity of new supply has helped support prices, though attempts to break above $26 have met strong resistance.

What has happened to LGC prices in 2025 and what factors are driving the decline?

LGC prices fell from $32.50 at the start of 2025 to around $10 by the time of the October update. The decline began in mid-2024 when LGC registrations began increasing much faster than voluntary demand, creating a growing surplus. This oversupply has been made worse by the Federal Government's Capacity Investment Scheme (CIS), which includes an additional 23–26 GW of renewable generation through to 2027. The Australian Productivity Commission's interim report also highlighted that new incentives are needed as the LRET concludes in 2030.

What is the current status of STC prices according to the update?

STCs remain capped at $40 despite strong creation from the Cheaper Home Battery Program.

What drives ACCU (and SMC) prices under the Safeguard Mechanism?

ACCU (and SMC) prices are driven primarily by compliance requirements under the Australian Safeguard Mechanism. For the next six years, facilities emitting over 100,000 tCO2-e per annum must reduce emissions by 4.9% each year or surrender ACCUs or SMCs to meet their shortfall, aligning with Australia's target of a 43% reduction by 2030. Other drivers include tightening emissions baselines, potential expansion of the Safeguard Mechanism to sites emitting as little as 50,000 tonnes, and demand from the Emissions Reduction Fund (ERF) Pilot Exit arrangement's fourth exit window, which requires 20% of ACCUs under ERF contracts to be delivered to the government to build reserves for the Cost Containment Measure (CCM).

What pending review could affect the long-term outlook of the VEU program?

The Strategic Review of the VEU (Victorian Energy Upgrades) program is pending and has yet to be released; it will influence the program's long-term outlook.

Who authored this Australian Certificate Markets October update, and when was it published?

The article was written by Hamish McGovern and published on November 4, 2025, on the Northmore Gordon website.

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