Australian Certificate Markets - September 2026 Update

About this update

This dated news record has been reorganised for clear reading and connected to current guidance.

Publication date: October 2, 2026.

Status note: Present-tense statements, market figures, deadlines and program details in the archived record belong to its publication date. Check current official sources before making a decision.

What this article reported

Price Summary

Effective cap: for ESC, PRC, VEEC and LGC, the scheme shortfall penalty grossed up at the 30% company tax rate (where applicable).

PRCs held at $3.35-$3.40, keeping August's gains. NSW DCCEEW confirmed the 2027-28 target stays at 8.5%, an estimated 70 million certificates by March 2029, versus roughly 4 million for 2026-27. Forward prices for delivery after around $3.00, with expected supply from the BESS3-BESS5 apartment and large C&I battery activities that began on 1 September. IPART banned seven NEOVOLT battery models on 8 September.

ESCs traded $28.70-$29.80, a fifth month below $30, closing at $29.65. Registrations stayed low under the 1 July Rule; market participants report audit timeframes are constraining some providers. Further Rule changes took effect on 7 September. Market participants note a sustained rise in registrations would may see prices soften.

VEECs firmed from $83.50 to $86.50, peaking at $87.00 on 11 September. The VEET Strategic Review Act received Royal Assent on 8 September, enabling faster changes to activity settings and targets. Higher co-payments for larger heating and cooling installs applied from 30 September; ceiling insulation Stage 2 and four new industrial heat methods started on 1 October. The state election is on 28 November.

STCs were flat at $39.85, trading no higher than $39.90. Mid-scale solar regulations were made on 17 September: systems above 100 kW to 1 MW installed from 1 October can create STCs, with a fixed five-year deeming period. The CER expects applications to open in mid to late November. The Clearing House was around 3.6 million STCs in surplus at the start of October.

LGCs opened at the month's high of $8.40, fell to $7.10 on 18 September and closed at $7.85. The CER's June quarter QCMR (9 September) reported record Q2 creations (15.2 million) and non-RET surrenders (5.5 million). It estimates a balance of 32.5-37.5 million LGCs at the end of the 2026 compliance period, with supply outpacing demand, though sentiment improved on expected data-centre demand.

ACCUs eased from $38.95 to $38.45 (range $38.00-$38.95). Safeguard Mechanism Review submissions closed on 18 September. On 10 September the Senate rejected, 34-27, a motion to disallow the Improved Native Forest Management method. The CER reported a record 10.9 million ACCUs issued in the first half of 2026. The 2026-27 cost containment price is $87.72.

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Regulatory Update - Program by Program

NSW Peak Demand Reduction Scheme (PDRS)

• 2027-28 target confirmed: NSW DCCEEW will maintain the 8.5% target, an estimated 70 million certificates by March 2029. The 2026-27 target stays at 0.5%.

• Rule changes: New ESS and PDRS Rules apply from 7 September (minor administrative changes for the PDRS). IPART's PDRS Method Guide V3.1 (3 September) updates BESS1 and BESS2 evidence and registration requirements.

• Equipment ban: Seven NEOVOLT battery models added to the PDRS prohibited list on 8 September.

• Broader reform: The Department aims to publish further PDRS and ESS reform information later this year.

• Watch in October: 2026-27 scheme certificate target (IPART, by 31 October); BESS3-BESS5 registrations; peak demand period starts 1 November.

NSW Energy Savings Scheme (ESS)

• Third month under the 1 July Rule: Registrations remain low after closure of gas water heater, space heater and boiler activities, the end of Sale of New Appliances, and a lower confidence factor for larger F16/F17 heat pumps. Targets are 11.0%, 11.5% and 12.0% for 2026-2028.

• Further Rule changes: In effect from 7 September across the ESS and PDRS.

• Accreditation conditions: IPART consultation closed 28 August; response pending.

• Watch in October: Registrations under the 7 September Rule change; any Department reform publication.

Victorian Energy Upgrades (VEU)

• Strategic Review Act in force: Act No. 37/2026 received Royal Assent on 8 September. It renames the VEET Act the Victorian Energy Upgrades Target Act, adds electrification objectives, expands ESC oversight and consumer protections, and allows faster adjustment of activity settings and targets. Consequential changes to the 2018 Regulations will follow.

• Activity 6 (space heating and cooling): From 30 September, the minimum co-payment is $3,000 (incl. GST) for ducted systems and multi-splits of 10 kW cooling or more, with incentives capped for large multi-splits. Smaller multi-splits stay at $1,000.

• Activity 48 (ceiling insulation): Stage 2 started 1 October, opening to all eligible Victorian homes.

• M&V Specifications V9.0: Four new industrial methods from 1 October: electric thermal energy storage, heat demand reduction, gas boiler efficiency and behind-the-meter biogas.

• Hydronic heating: DEECA will proceed with a heat pump hydronic activity, proposed for Q2 2027.

• Water heating review: Consultation on Activities 1 and 3 closes 18 October; response due late 2026.

• Large businesses: Consultation on a Large Energy User Access Initiative opened 3 September.

• Enforcement: MYOM Australia.

• State election (28 November): The new Act gives either party more flexibility on targets and activity settings. 2028-2030 targets must be set by 31 August 2027.

• Watch in October: Water heating consultation close (18 October); creation under new Activity 6 and 48 settings; draft consequential Regulations; pre-election VEU policy.

Safeguard Mechanism / Australian Carbon Credit Units (ACCUs)

• Safeguard Mechanism Review: Submissions closed 18 September. The review focuses on post-2030 settings, including the 2030-35 baseline decline rate, and the cost containment measure.

• Improved Native Forest Management method: The Senate rejected a disallowance motion 34-27 on 10 September; the method remains in force.

• Issuance: 10.9 million ACCUs issued in H1 2026, up 1.4 million (15%) on H1 2025 (CER QCMR).

• Cost containment measure: $87.72 per ACCU for 2026-27, indexed at CPI plus 2%.

• Watch in October: Publication of review submissions and next steps; any Climate Change Authority advice.

Large-scale Renewable Energy Target (LRET) - LGCs

• June quarter QCMR: Renewables supplied about 42% of NEM generation. Record Q2 creations of 15.2 million; 2026 supply tracking to the top of the CER's 64-66 million projection. Record non-RET surrenders of 5.5 million; registry holdings up 25% year on year to 44.4 million.

• Supply position: Estimated balance of 32.5-37.5 million LGCs at 16 February 2027. All vintages to 2030 have converged with spot since April. The 33,000 GWh obligation is fixed to 2030.

• Data centres: Energy ministers met on 11 September. The AEMC has started its data-centre rule changes, including network augmentation cost recovery. REGO-based Commonwealth legislation is targeted for early 2027.

• Watch in October: AEMC rule change progress; Q3 voluntary surrenders, including government surrenders deferred from Q2.

Small-scale Renewable Energy Scheme (SRES) - STCs

• Mid-scale solar legislated: Regulations amended 17 September. Systems above 100 kW to 1 MW installed from 1 October are eligible, with a fixed five-year deeming period. Systems up to 100 kW are unchanged; existing LRET-accredited mid-scale systems stay in the LRET.

• Applications: Expected to open mid to late November; installs from 1 October can apply then.

• Market activity: A record 45.5 million STCs changed hands in Q2, with some sellers using the open market rather than waiting for the Clearing House.

• Heat pump water heater MEPS: DCCEEW exposure draft open until 5 October.

• Watch in October: CER readiness for mid-scale applications; Clearing House movements.

Consultations open or expected

Published by Northmore Gordon Environmental Pty Ltd (ABN 45 160 805 649, AFSL 533927) for general information only. It contains factual market information and is not financial product advice, investment advice or a recommendation to acquire, hold or dispose of any financial product. It does not consider any client's objectives, financial situation or needs. Statements attributed to market participants are reported commentary, not Northmore Gordon's views or forecasts. Northmore Gordon and its related parties may hold or transact in the certificates and units referred to. Information is from sources believed reliable but is not warranted as accurate or complete. Past prices are not indicators of future performance. Services are available to wholesale clients only.

Get in touch: Hamish McGovern - h.mcgovern@northmoregordon.com - 1300 878 500

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