Market Update | 14 June

• Historic VEEC rally ends with drop in spot and forwards
• Commercial Building Disclosure Program expansion consultation released
• ESS Rule to come into effect next week

This week in certificate markets, VEECs experienced a significant drop – despite creation volumes continuing to erode the liquidity surplus though tracking well below target creation levels. Strong creation volumes for both ESCs and PRCs were maintained but this failed to further drive prices downwards.

Meanwhile, LGCs held ground in spite of annual strong end-of-financial year creation volumes.

All-time high VEECs pricing surge halted

After reaching historic highs week after week, the VEEC market experienced a sudden drop from $115.00 down to $105.00 and falling.

This comes despite increased weekly creation volumes failing to reach weekly creation targets required to meet annual surrender targets for liable entities.

Consequently, the market’s liquidity surplus continues to erode and is forecasted to be exhausted in mid-2025 should creation volumes maintain their current trendline.

Commercial Building Disclosure Program to be expanded, consultation released

In exciting news this week, the National Australian Built Environment Rating System (NABERS) program is set to be expanded to cover commercial buildings over 1000sqm under the Commercial Building Disclosure (CBD) Program.

The announcement was released this week following a report commissioned by KPMG, which recommended a formal cost-benefit analysis and a regulatory impact assessment process for each three of the seven policies assessed in their report with option two leveraging NABERS.

Anyone reading this who is interested in a NABERS rating for their business, please reach out to our Account Management Team for more information.

ESS Rule to be implemented on Wednesday, 19 June 2024

A raft of changes are set to be introduced across a number of activities with an activity date from Wednesday next week through the implementation of the new ESS Rule.

Major updates under the Home Energy Efficiency Retrofits (HEER) methodology include;

• • Reduction in incentive levels under hot water activities (Activity D17-21)) following updates to baseline energy consumption
  • Increase in minimum co-payments under the hot water (Activity D16) and air conditioning activities (D21)

Major updates under the Installation of High Efficiency Appliances for Business (IHEAB) methodology include;

• • The installation of a new refrigerated display cabinet (Activity F1.1) is no longer eligible
  • Introduction of a minimum co-payment of $200.00 + GST under the heat pump hot water activities (F16 & F17)

For further information on this, please reach out to your Account Manager.

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.