Energy Savings Certificates
An Energy Savings Certificate (ESC) is a tradeable certificate representing one notional megawatt hour of energy.
The Certificates section of our website has information about how to register and trade an ESC.
Read below for more information about:
- who purchases ESCs
- ESC pricing and penalty rates
- selling ESCs
- IPART’s involvement in the scheme.
Who purchases ESCs?
People interested in buying ESCs include:
- scheme participants, who must surrender ESCs or pay a penalty to meet their share of an annual energy savings target
- Accredited Certificate Providers (ACPs)
- intermediaries who then sell the ESCs to scheme participants or other parties
- organisations or individuals interested in voluntarily purchasing ESCs to offset energy use.
ESC pricing and penalty rates
The ESC price varies depending on market conditions.
If a scheme participant does not surrender the required number of certificates in a given year (excluding any shortfall it is allowed to carry forward to the next compliance year), it must pay a penalty.
The penalty rate is adjusted yearly and published on the Targets and Penalties page.
Some organisations give regular updates on certificate wholesale market prices. This includes the Australian Financial Markets Association (AFMA) and some environmental brokers. Subscription to these services typically involves a fee.
Selling ESCs
Most ESCs are traded under a direct contract between an ACP and a buyer. Contracts and prices vary. There are currently no standard contracts or a recognised exchange for trading.
See the AFMA Environmental Product Conventions for further guidance on contracts.
For some contracts, you may need to have an Australian Financial Services Licence issued by the Australian Securities & Investments Commission. Always seek independent advice on your obligations relating to your chosen contracting model.