What happens after 2030? The transition from LGCs to REGOs

Our third and final blog in our LGC series explores the post-Renewable Energy Target (RET) landscape, the importance of robust claims and evolving corporate sustainability strategies. 

Today LGCs are more attractive than ever for corporate buyers with prices reaching historical lows of less than $10 per certificate. Yet this is now a market in transition. The RET is set to end in 2030 and a new voluntary certificate regime, under the Renewable Electricity Guarantee of Origin (REGO) legislation, will gradually take the place of LGCs as the instrument to support renewable energy claims. In this blog we explore the implications 

From mandatory to voluntary: a certificate scheme in transition

With the end of the RET scheme in 2030, energy retailers and other liable entities will no longer be required to surrender LGCs to the Clean Energy Regulator. LGCs can be traded post-2030, but the pool of LGCs will steadily reduce and power generators will instead have the option to create REGOs for the renewable electricity they produce. 

With the demise of LGCs, the only Federal Government-verified renewable energy certificate scheme will be the Renewable Electricity Guarantee of Origin (REGO). 

The REGO scheme took effect 3 November 2025. It will operate alongside the LGC scheme through a transition period. As with any new scheme, there is more we need to learn and there may be further design “tweaks”. SmartestEnergy will monitor developments and keep you informed.

The shift to REGOs. What is different?

Key features of the REGO scheme include:

• REGOs will be tradeable certificates representing 1 megawatt-hour (MWh) of eligible renewable electricity generation.
  
  
• Through the transition period, accredited generators can create either LGCs or REGOs, but not both, for the same MWh of electricity to prevent double counting.
  
  
• REGO allows for the certification of renewable energy from new sources, including offshore and small-scale systems and could potentially facilitate the export of renewable electricity.
  
  
• Renewable energy generation not previously eligible to create LGCs under the RET (below-baseline generation) may now become eligible for REGO certification, broadening the scope of eligible renewable energy. However, details of when and how below-baseline assets will be permitted to generate REGOs is still being finalised.
  
  
• REGO certificates are intended to support broader tracking and alignment with international voluntary schemes and emissions reporting standards. Like other voluntary schemes, they are not a complete solution, and we may see design and uptake challenges.

REGOs include the eligible amount of electricity for the facility and a time period, plus the location of the generation and the commissioning date. This certificate content supports verification of when, where and how the renewable electricity was generated. Additionally, REGOs may assist organisations such as, data centres and global corporations seeking to meet 24/7 time matching requirements.

With REGOs being phased in alongside the LGC scheme and therefore both operating in parallel through the transition period, the future balance between LGCs and REGOs will depend on policy, market adoption and voluntary scheme requirements. However, SmartestEnergy does not anticipate a rapid scale up in either REGO creation or demand. Corporate Australia is very familiar with the LGC Scheme, they are plentiful and currently trading at historically low prices.

Will voluntary demand sustain the certificate market post 2030?

Sustainability commitments remain a feature of corporate Australia. Although sustainability, climate action and the clean energy transition have been politicised for some time, the drive to do more to manage sustainability and do it more quickly has become quite structural beyond short term economic or political cycles.

We see this with Australia’s mandatory climate-related financial disclosure regime which has its origins in the work of the International Financial Reporting Standards foundation (IFRS) and the International Sustainability Standards Board (ISSB), which seek to ensure, as stated by IFRS, “consistent and comparable sustainability information to inform economic and investment decisions”.

Factors supporting LGC demand and later, REGO demand

LGCs are abundant: Currently a large volume of LGCs are available in the market  helping to put downward pressure on certificate prices.  Demand should be further enhanced because at historically lower prices, LGCs may be a lower cost alternative to ACCUs which are currently trading above $30 per unit (even when adjusted for the different measurement factors). 

Corporate sustainability trends – the advent of mandatory climate-related risk reporting in Australia: Within net zero or broader decarbonisation strategies, the emissions associated with procured energy are referred to as Scope 2 emissions. LGCs can be used to offset these Scope 2 emissions. In doing so, LGCs form part of a broader strategy for organisations to meet renewable energy targets or carbon neutrality goals. 

Under Australia’s mandatory climate-related financial disclosures (ASRS) which captures local listed and unlisted businesses as well as global entities that are ASX listed, reporters need to be able to verify their Scope 2 emissions reductions and their renewable energy claims. There are 3 reporting tranches. The reporting period for Group 1 became effective 1 January 2025, with Group 2 required to report from 1 January 2026. 

As described by the Australian Securities and Investment Commission (ASIC) the enabling legislation requires the disclosure over a financial year to include metrics and targets in relation to scope 1, 2 and 3 greenhouse gas emissions. Disclosures also need to be assured, and the level of assurance increases over time. Ensuring LGCs are properly accounted for in disclosures is essential for aligning with mandatory reporting requirements. Given the robust nature of LGCs and REGOs as government-backed programs, we can expect demand for REGOs to be sustained into the post 2030 period. However, even with the mandatory nature of ASRS, the scheme and other voluntary programs alone are unlikely to drive the same level of investment as regulated mechanisms. 

RE100 and Science-based Targets (SBTi): Companies with global renewable energy commitments will still need some form of offsetting strategy such as LGCs to prove compliance, though these instruments do not directly create new renewable capacity.

Consumer and investor expectations: Public demand for corporate climate action is likely to keep LGCs top of mind, especially for Australian voluntary demand, as well as for international organisations with a presence across Australia or the APAC region. 

The rise of alternative energy certificates and carbon credit mechanisms

As the market adapts, businesses may need to explore new options beyond LGCs and REGOs. Emerging trends include:

GreenPower and state-based schemes: Voluntary programs like GreenPower could take on a larger role in renewable certification. 

Carbon offsets and new energy attributes: The expansion of carbon markets may lead to alternative instruments for tracking corporate sustainability. However, this market has recently suffered from reputational issues stemming from certain voluntary projects and methodologies, highlighting the importance of transparency and due diligence when selecting certificates. 

International energy certification models: Australia could align with global frameworks, such as Guarantees of Origin (GOs) or Renewable Energy Certificates (RECs) used in other markets. However, in the near-term, this seems unlikely. 

Strategic insight: As the certification landscape diversifies, many organisations are exploring a broader mix of procurement options to support their long-term sustainability goals, though no single scheme will fully address every challenge in measurement and verification. 

Talk to SmartestEnergy about how your business can benefit from the LGC market to deliver against your sustainability goals.

What’s Next? 

We’ll kick off the new year and the return of business after the summer break, with a guide and summary of key takeaways and explore how LGCs can fit into long-term sustainability plans, based on current frameworks and market practices.

Disclaimer: The information enclosed is general information only; it cannot be relied upon as legal or financial advice. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person or entity.