Market Update | 5 June 2026

• • Clean Energy Council publishes its Q1 2026 Carbon Market Report

  • Australian homes would benefit from energy efficiency upgrades

  • Certificate Market Prices & Commentary – significant gains for LGCs, ESCs and PRCs

The Clean Energy Regulator publishes its Q1 2026 Carbon Market Report.

The Clean Energy Regulator’s recently published Q1 2026 quarterly carbon market report which shows households with solar and batteries are now reducing grid imports and increasing exports during evening peaks.

The report asserts that ongoing installations of these technologies could shift the role of distributed resources helping reduce instances where large-scale renewable generators need to lower their output due to low or negative wholesale energy spot prices.

Other key findings include:

• • Australia experienced a significant increase in battery adoption; as of mid-May, the nation has surpassed 400,000 installed battery systems providing more than 11.4 GWh of usable storage capacity.
  • The forecast for small-scale solar remains positive following a record-breaking first quarter, where installations reached 791 MW. Over the last twelve months, the growth in electricity demand within the National Electricity Market (NEM) has been countered by the increased generation from these small-scale systems.
  • In Q1 2026 renewables achieved a record-breaking share of 47% of NEM generation. This surge was fueled by robust wind and solar production alongside a reduction in thermal-based output.
  • By shifting energy availability across different timeframes, battery storage systems are reducing the need for coal and gas generation during peak evening demand.

The Large-scale Generation Certificate (LGC) market experienced 4.1 million surrenders in Q1, fueled by lower prices and a surge in non-government participation. This period also marked the inaugural issuance of certificates, created by Ecovantage, under the Renewable Electricity Guarantee of Origin (REGO) scheme. 

Australian homes would benefit from energy efficiency improvements and electrification.

A recent article by Dr Gill Armstrong from Climateworks suggests that millions of Australian homes need to be upgraded to improve their energy efficiency. According to Dr Armstrong, residences with poor energy performance overheat rapidly in daylight hours and quickly lose their temperature during the night. This often compels occupants to depend on high energy-consuming systems during intervals of peak demand, placing pressure on the grid and energy affordability.

Some of the key observations in this article are summarised as follows;

In Australia, approximately 70 per cent of the 11 million existing dwellings are considered low-performing. Furthermore, roughly five million households continue to rely on fossil gas, a trend that is especially prevalent in the southern states. By upgrading these homes, the energy required for heating and cooling will be minimised, facilitating a more effective transition to an electrified grid supported by renewable energy sources.

With new energy supply often taking years to deliver, the International Energy Agency (IEA) identified that demand side reduction measures reduce households’ exposure to price and supply shocks much more quickly.

Dr Armstrong suggests that while upgrades are relevant to all types of homes, townhouses and apartments present rapid scalability for energy and emission reductions. Targeting these housing types will also support lower-income households and renters, who are relatively more likely to live in these types of dwellings.

Despite ongoing discussions about the need for electrification, approximately 5 million Australian households are still reliant on gas. While jurisdictions like Victoria have moved to ban new gas connections, the absence of a unified national strategy threatens to create a disjointed transition.

Much has been discussed about the need for a surge in housing construction in Australia. Implementing robust energy performance standards is essential; by establishing higher standards today, costs can be distributed more manageably over time while ensuring long-term protection and efficiency for households for many years to come.

Weekly Market Update | 11-15 May 2026

Large-Scale Generation Certificates (LGCs)

After a relatively quiet start to the week, which saw the LGC spot price trade at $2.45, as the week progressed the market ignited. On Wednesday a total of 225k certificates were traded on the spot market, which saw the price climbing steadily throughout the day to $2.95. Then on Thursday a further 160k changed hands, on a volatile day that saw the price peak at $5.00 before falling back with a large parcel of 75K exchanging at $3.50. This still represented a 42% gain across the week, albeit from a low base.

A similar pattern was experienced on the forward markets, with all vintages finishing the week significantly higher, summarised as follows;.

• • Cal 26 & 27 – $3.75 – up 50%
  • Cal 28 – $3.50 – up 62%
  • Cal 29 – $3.75 – up 78%
  • Cal 30 – $3.25 – up 54%

The previous price collapse has been fuelled by strong wind and solar generation in recent months, which far exceeded the Clean Energy Regulator’s (CER’s) initial forecasts. Combined with a 15.9 million certificate carryover from previous years this has created a substantial surplus of LGC’s.

However, coinciding with this price collapse, project approvals for larger scale commercial and industrial renewables projects have reduced by over 50%. Hence the market appears to be expecting government intervention in the LGC price space and is rather jumpy as a result. Any price increase can set a rally going at the moment as there is a huge amount of speculative trading houses currently holding LGCs.

Victorian Energy Efficiency Certificates (VEECs)

The VEEC spot market slipped back a little during the latest week – falling by $1.10 to end the week at $87.75. Tuesday was the most active day in an otherwise quiet week; a total 115k VEECs traded on this day alone – which coincided with most of the falls in the spot price.

The forward markets were even quieter – with a small number of $5k parcels all trading downwards versus their previous positions. After opening the week at $90, each of Sep, Oct, Nov and Dec 26 all traded down by just over a dollar, to finish the week between $88.85 and $88.70. Jun and Jul 26 each fell even further – closing at $87.50 and $87.75 respectively.

Energy Saving Certificates (ESCs)

The ESC markets continued to show strong positive momentum this week, maintaining the upwards trend that has been occurring over the past few months.

On the spot market, relatively light trading saw the price climb steadily – breaking through the $30 mark and then closing at $30.60 –  a healthy gain of $2.05 or 7% across the trading week.

The forward markets also saw mostly positive momentum. Gains were seen across July 26 – up $2.00 to $31.00, Oct Nov & Dec 26 – each up by $1.25 to $31.50 and Jan Feb & Mar 27 – all up by $1.75 to $32.25. In the absence of new activities, market changes, the ESC spot price could continue to climb over the coming months.

Registrations bucked the trend of recent weeks – with a healthier 146k ESCs uploaded during the last 7 days. However registrations were dominated by the Tomago Aluminium company under a metered baseline methodology, which accounted for 87% of the week’s registered ESCs. Most of the balance, 9% overall, was made up by activities under the Installation of High Efficiency Appliances for Businesses (IHEAB) program.

Peak Reduction Certificates (PRCs)

The PRC market sprung to life on Wednesday with some significant gains. On the spot market, 200k certificates exchanged hands, peaking with a 65k parcel at $3.35 – which was a 9% gain on the opening position of $3.07.

While the forward markets were generally quiet, a single 125k bundle in September 26 traded at $3.25 – a rise of $0.20. This was the exception and all other vintages are currently a step below this price.

Australian Carbon Credit Units (ACCUs)

In light trading the ACCU generic spot price fell by $0.05 to finish the week at $37.55.

The Human-Induced Regeneration ACCU spot was more active – first trading up by $0.45 to $38.00 with a 10k parcel at the beginning of the week, before losing most of this gain with a 35k parcel trading at $37.65 at the back end of the week. There was also a single trade in the Aug 26 forward market – with 30k changing hands at $37.60.

On the method specific ACCUs market a small parcel of 5k in the Environmental Planting activity exchanged at $51.00, which was down by $5.00 on its previous position. The last trade in this activity was back in early January (‘26).

Small-Scale Technology Certificates (STCs)

The STC clearing house surplus has fallen once again this week – and whilst it currently stands at approximately 9.8 million, which is still a large surplus, this is more than 25% lower than just 2 weeks ago.

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.