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.
- 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 firmed from mid-$36 into the high-$37s as Safeguard surrender (March 2026) approaches.
- VEECs strengthened from mid-$70s to ~ $81, with the market watching how 2026–27 creation rates track against materially lower targets.
- LGCs fell sharply to ~ $5.25 at the end of January, with retailer buying for the annual surrender in February contributing to volatility.
- ESCs stayed resilient around $22.75 despite structural oversupply, with attention now on 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. Rule Change review and the ESS Policy reform consultation. (NSW Climate and Energy Action)
- STCsSmall-scale Technology Certificate under the Australian Renewable Energy Target. More Clearing in House surplus has seen prices drifting down to $39.60, with clearing house now taking 2-3 weeks to process purchases.
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 large-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.
