The Future of Australia’s Renewable Energy Market: Understanding the Role of Time-Stamped REGO Certificates
Australia is at a significant turning point in its renewable energy journey. With ambitious climate targets — 43% emissions reduction by 2030 and net zero by 2050 — the country is driving substantial changes in how renewable energy is tracked, certified, and integrated into supply chains. Central to this transformation is introducing Renewable Electricity Guarantee of Origin (REGO) certificates, which will replace the existing Large-Scale Generation Certificate (LGC) system post-2031.
This blog will explain the REGO system, its importance, how it differs from the LGC system, and what it means for Australia’s renewable energy future.
A Look Back: The Role of LGCs in Australia’s Renewable Energy Story
The Large-Scale Generation Certificate (LGC) system has been an integral part of Australia’s renewable energy market, functioning under the Renewable Energy Target (RET). Electricity retailers must purchase LGCs to meet RET compliance obligations. However, we have seen voluntary corporate buyers have driven additional demand, pointing to increasing demand beyond government mandates. In 2023 alone, 37.5 million LGCs were issued. LGC supply remained steady in 2024, with 24.9 million LGCs validated in the first half of the year and an expected total of 52–54 million by year-end. It was mainly due to the continued accumulation by businesses preparing for renewable electricity claims from 2025 onwards.
The Limitations of LGCs
Despite its success, the LGC system has a key limitation: it does not track when electricity is generated, making it unsuitable for real-time energy matching. This is becoming a critical issue as businesses aim for:
- 24/7 carbon-free energy (CFE) commitments.
- More flexible electricity procurement and storage solutions.
- Compliance with international green hydrogen certification standards which require hourly matching (e.g., EU RFNBO, U.S. 45V tax credit).
To address these challenges, Australia is transitioning to the REGO system, which will offer greater granularity in tracking.
The following table summarizes the key differences between the LGC and REGO systems:
Source: EnergyTag.
The Transition to REGO Certificates
The Australian Government has passed the Future Made in Australia (Guarantee of Origin) Act through Parliament on 28th Nov 2024. It will establish the REGO certificate scheme to certify renewable electricity and products such as Hydrogen, Critical Minerals, and Aluminium.
The Critical Minerals Production Tax Incentive
In February 2025, the Australian Government passed the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024. This bill introduces two major incentives: the Hydrogen Production Tax Incentive (HPTI), offering $2 per kilogram of renewable hydrogen produced for projects reaching a final investment decision (FID) by 2030, applicable to production between 1 July 2027 and 30 June 2040 for up to 10 years; and the Critical Minerals Production Tax Incentive (CMPTI), providing a 10% refundable tax offset on eligible processing and refining costs for 31 critical minerals, also available from 1 July 2027 to 30 June 2040 with up to 10 years of support per project.
REGOs will track and certify renewable electricity consumption, ensuring hydrogen producers and critical minerals refiners meet decarbonization eligibility criteria under the tax credit framework.
New Green Aluminum Production Credit
In January 2025, the Australian government introduced a $2 billion Green Aluminium Production Credit to support the decarbonization of the aluminum industry. This initiative provides financial incentives to aluminum producers transitioning to renewable energy by 2036. REGOs will play a central role in measuring, tracking, and verifying the emissions associated with aluminum production.
As global markets — including the EU’s Carbon Border Adjustment Mechanism (CBAM) — tighten carbon reporting standards, this credit and the REGO system will help position Australian products as a low-carbon export while ensuring compliance with international decarbonization criteria.
Key Milestones in the REGO Rollout:
- According to the Clean Energy Regulator’s latest update, the GO Scheme is expected to commence in the second half of 2025, introducing REGO certificates as an additional certification mechanism alongside LGCs.
- The REGO system will fully replace LGCs when the Renewable Energy Target (RET) ends in 2030.
The EnergyTag Granular Certificate (GC) Scheme Standard has set a benchmark for tracking and certifying renewable electricity with a high level of temporal granularity, typically at an hourly or sub-hourly level. While REGOs introduce time-stamping, the Future Made in Australia (Guarantee of Origin) Act 2024 allows REGO certificates to reflect either an hourly time period or a broader timeframe (such as a calendar month), with the exact granularity to be defined by future rules (as per Section 94(h) of the Act).
For reference, the EU Renewable Fuel of Non-Biological Origin (RFNBO) rules will require hourly matching from 2030 onward, meaning Australian hydrogen exporters to the EU will need to comply with this hourly matching criterion.
Next Steps for Stakeholders (2025–2030 & Beyond)
With REGOs launching in the second half of 2025, stakeholders must prepare for the transition from LGCs to REGOs. This includes investing in smart metering to facilitate hourly matching where required. Corporations and supply chains must reassess their renewable energy procurement strategies, engage in early REGO markets once they become available in 2025, and invest in energy storage solutions to support hourly tracking where necessary.
Meanwhile, policymakers and market participants play a crucial role in shaping future regulations. It is essential to ensure that hourly REGO issuance remains widely available to meet global standards while allowing flexibility for domestic needs.