VEEC trading is the market that connects the businesses that create Victorian Energy Efficiency Certificates with the energy retailers that are legally required to surrender them. Its structure is simple: a regulator sets a target, retailers need certificates to meet it, providers create certificates by delivering upgrades, and traders and registry transfers move the certificates between them at a price that settles supply against demand.
What makes it interesting is that it behaves differently from the federal STC market. There is no fixed-price clearing house, the buyers are a small number of obligated retailers, and the calendar of surrender deadlines shapes when prices move. This guide walks through the market as a whole; for the installer’s day-to-day, see our companion piece on VEEC trading for installers.
The participants
- Regulator. The Essential Services Commission accredits providers, runs the VEU Registry, audits and enforces. The Victorian Government sets the targets and policy.
- Liable entities. Energy retailers above the size threshold. Each has a share of the annual target and must surrender enough certificates or pay a shortfall penalty.
- Providers. Accredited businesses that create certificates.
- Traders and aggregators. Intermediaries that buy from providers and sell to retailers, offering liquidity, price discovery and sometimes compliance pre-checks.
The annual cycle
A typical year has three phases.
- Creation. Providers deliver upgrades through the year and create certificates.
- Trading. Buyers accumulate certificates through spot and forward purchases. Some retailers buy steadily, others leave it late.
- Surrender. Retailers surrender certificates to the ESC to meet their obligation by the deadline. Anything left unsold carries into the next year as banked stock.
The deadline matters because a retailer that is short has no alternative to buying at the market price, which is why prices can firm as it approaches. Check the ESC’s calendar for the actual dates.
How the price forms
Because there is no ceiling, the price is set where supply meets demand. Demand is the target. Supply is what providers create plus any banked stock. In 2026 the spot market has traded roughly between $85 and $95 at the time of writing, after a record near $110. When the target tightens or supply falls, prices tend to rise; when supply is strong, prices soften. The long-run signal is the program’s extension to 2045, which supports forward buying, while interim targets for 2026 and 2027 shorten the horizon.
For more on drivers and scenarios, see the VEEC price forecast and the answer on why VEEC prices are so high.
Spot, forward and bilateral
| Type | Description | Who uses it |
|---|---|---|
| Spot | Immediate transfer at the day’s price | Providers with irregular volume |
| Forward | Delivery of a set volume at a set price on a later date | Providers and retailers wanting certainty |
| Bilateral | Direct negotiated deals between two parties | Large providers and big retailers |
Spot is flexible. Forwards trade flexibility for certainty. Bilateral deals can cut out the intermediary, but they need volume and credit appetite.
Where the risks sit
Price risk. The price can fall between creating and selling. A provider with fixed customer discounts bears this.
Compliance risk. The ESC can reverse certificates found to be non-compliant. Contracts allocate who bears it; read the clause.
Counterparty risk. The buyer might pay late or not at all. Check the buyer’s record and keep settlement terms short.
Policy risk. Activity specifications and targets can change. The 2026 and 2027 interim targets and the strategic review are live examples.
How a trader earns its place
A good trader gives you three things: a visible price, predictable settlement, and a reliable compliance check. The first lets you compare. The second protects your cash flow. The third protects you from the quiet cost of a rejected claim. Our choosing a certificate trader checklist works through the questions to ask, and applies equally to VEECs.
Common mistakes
- Selling everything at once into a thin market instead of staggering sales.
- Ignoring the calendar and selling just before a deadline-driven price lift.
- Skipping evidence and discovering the problem at the buyer’s pre-check.
- Treating spot as guaranteed. The price on the website is a quote, not a contract, until it is confirmed.
Reading the market as a provider
If you are a provider, three simple habits make the market easier to read. First, track your own certificate creation by month and compare it with the broader supply reported by the registry, so you know whether your volumes are rising with or against the market. Second, keep a running view of the gap between spot and forward quotes from your buyers; a wide gap is the market telling you something about expected supply or demand. Third, note the ESC’s announcements and treat any change to activity specifications as a potential price event, not just a compliance update.
None of this requires a trading desk. A spreadsheet updated weekly is enough to keep you from being the last to notice a change.
How VEECs differ from STCs and LGCs
The three certificate markets sound alike and behave differently. STCs have a fixed-price clearing house at $40, which anchors the market and keeps volatility low. LGCs are priced in a market with no backstop, and have recently traded around $6 to $9 in September 2026, with the large-scale scheme ending in 2030. VEECs sit in between: state-based, obligation-driven, no clearing house, and with prices roughly $85 to $95 in 2026. If you deal in more than one, treat each as its own market, with its own calendar and its own risks. Our answer on LGCs versus STCs covers the federal pair.
When a trader adds value
A trader adds the most value when your volumes are modest and your time is scarce. You get a price, a settlement date and a compliance check without having to hunt for a retailer. It adds less value when you create enough certificates to deal with retailers directly and have staff to manage the admin. Many providers move between the two as they grow. What matters is that the trade-off is conscious: you know what the intermediary costs and what it saves.
What to do next
- List the activities you deliver and their expected monthly certificate volume.
- Get published rates and settlement terms from at least two buyers.
- See our VEEC trading pillar page, how it works and pricing.
- If you also create STCs, read VEECs and STCs on the same job and the partner program.