• • Federal Government commits to 62-70% emissions reduction target.
  • ESS Rule changes now in effect.
  • LGCs continue slow decline.
  • VEECs quiet again.
  • ESCs see marginal increase.
  • PRCs recover above $3.00 mark.
  • ACCUs lively following emissions reduction target announcement.
  • STCs steady as Clearing House remains in surplus.

62-70% emissions reduction by 2035, boosts to funding for energy efficiency.

The Federal Government has set a new 2035 emissions reduction target of 62% to 70%, a significant increase from previous projections.

In an independent report commissioned by the Climate Change Authority, the targets were deemed to be achievable and in Australia’s national and economic interest.

To meet the goal, $7 billion in new funding was announced, alongside potential policy tightenings and carbon tariffs. Included in this was an announcement of $85m of spending for energy efficiency to firm up the demand side, boosting programs like:

1. Greenhouse and Energy Minimum Standards (GEMS).
2. Nationwide House Energy Rating Scheme (NatHERS).
3. National Australian Built Environment Rating System (NABERS).
4. Commercial Building Disclosure (CBD).

New ESS Rule in effect.

This is a reminder that the new Energy Savings Scheme (ESS) Rule and Peak Demand Reduction Scheme (PDRS) Rule are in effect. Changes include:

• • An additional 20% in ESCs and PRCs for air conditioning installations under HEER (residential and small business) and IHEAB (commercial) HVAC.
  • An end date for the Commercial Lighting activity – all installations must be completed and all certificates must be registered by 31 March 2026.
  • Changes to calculations and increased minimum co-payments for commercial heat pump hot water installations.

For more information on the impact these changes could have on your business, please contact a member of the Account Management Team today.

Weekly Market Update | 15 – 19 September 2025

Large-Scale Generation Certificates (LGCs)

LGCs continued their recent decline, trading down throughout the week across moderate liquidity.

Spot again found the most support with just shy of half the weekly trading volumes, resulting in prices steadily losing ground to close $0.75 below Monday’s opening of $12.00.

There were similar losses in the CAL26 and CAL27 vintages, shedding between 6-10% to close at $12.00 & $9.00, respectively.

This reflects an ongoing trend of softened LGC pricing, which, while weakening future light commercial project feasibility, offers organisations increasingly more attractive avenues for purchasing renewable electricity to offset energy consumption in alignment with climate program obligations.

To understand more about how you and your customers can benefit from this, speak to a member of the Account Management Team today.

Victorian Energy Efficiency Certificates (VEECs)

VEECs remained largely quiet this week with spot drifting to close a step lower at $95.90, as low volumes were exchanged.

This was largely reflected in the forwards market with minimal transactions agreed – the most notable being an April 2027 in 15k at $95.00.

With the recent improvements to the new VEU Registry, we are now able to report on certificate creation trends. Activity 6 (341,000) and Activity 44 (234,000) continue to dominate creation, representing over 83% of creation volumes in August. Notably, close to 10% (22,800) of Activity 44 creation volumes last month have been withdrawn and just over 50% (119,000) registered, with the remaining 40% (92,700) still sitting with the regulator pending approval. This comes as ongoing concerns regarding non-compliant conduct was flagged earlier this year, prompting increased scrutiny for installations completed under the activity and changes to product eligibility and certificate calculations.

With just shy of 4.5m certificates registered in 2025 and just three months until the end of the year, it remains to be seen how the 2025 target of 7.2m will be met with increasingly fewer viable avenues for certificate creation. This is expected to continue to put pressure on VEEC prices heading into 2026 and beyond, in spite of the reduced targets for 2026 and 2027.

Energy Saving Certificates (ESCs)

The ESC market was again quiet but saw marginal gains to close slightly higher at $24.20.

Registrations were down again at just over 35,000, bringing September’s total to just over 150,000. This follows a relatively mild August, which saw 310,000 – up from July’s 179,000. A stark contrast from the same period 12 months ago, punctuated by a peak of 1.1m certificates in August 2024.

Given the extended periods of softened pricing, these lowered volumes are expected to continue to drive strong growth in ESC prices, as we move into 2026.

Peak Reduction Certificates (PRCs)

Last week’s dip was short-lived, as PRC prices rebounded to close back above the $3.00 mark in both spot ($3.05) and the forwards market.

In what was a quiet week with only a handful of reported trades, the most notable action was a 50k strip from January-March 2026. This comes on the back of last week’s news that current program targets are set for a review with a reduction a seemingly likely outcome, following the recent removal of the main driver of certificate creation, BESS1.

Australian Carbon Credit Units (ACCUs)

After early week trading saw prices threaten to breach the $38.00 threshold, Thursday’s news of the federal government’s commitment to a 62-70% emissions reduction by 2035 drove prices to their highest point since December 2024. Peaking briefly at $38.10 on Thursday afternoon, prices settled to close the week at $37.40.

Though the emissions reductions targets are moderate, relative to other targets set across the globe, this is expected to spur both activity and demand in the sector.

Small-Scale Technology Certificates (STCs)

Despite the Clearing House posting a surplus (105,000 at the time of writing), there was little action. With over 11m BSTCs created in a little over 3 months, the federal government’s Cheaper Home Batteries Program continues to go from strength to strength.

Certificates spot prices & graphs available at Market Update >

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.