3 September 2026

Proposed changes to expand VEU program support for large businesses

The Department of Energy, Environment and Climate Action (DEECA) is proposing changes to the Victorian Energy Upgrades (VEU) program to expand support for large businesses. These include:

This suite of proposed reforms aims to make it easier for businesses and commercial and industrial facilities to participate in the VEU program, while providing more activities and delivering long-term certainty.

Large Energy User Access Initiative

Schedule 5 of the Victorian Energy Efficiency Target Regulations 2018 (VEET Regulations) exempts certain facilities (known as Scheduled Activity Premises (SAPs)) from the VEU program.

Under the current VEET Regulations, SAPs can opt in to access VEU program incentives but must begin paying program costs from 1 January of the second calendar year after registering their first Victorian Energy Efficiency Certificate (VEEC).

The Large Energy User (LEU) Access Initiative proposes an amendment to the VEET Regulationsto extend the opt-in period for scheduled activity premises (SAPs) from 2 to 5 years before they become liable for VEU program costs.

This is a targeted reform intended to encourage more SAPs to voluntarily opt in to and participate in the VEU program, particularly for LEU facilities, by allowing businesses more time to undertake upgrades and access incentives before becoming liable for program costs.

The initiative is expected to support greater emissions reductions and investment in industrial energy efficiency and decarbonisation.

Participate in the consultation

DEECA is seeking feedback from stakeholders on the proposed LEU Access Initiative. Interested parties and stakeholders are invited to make a submission with feedback on the consultation paper or participate in the survey.

The consultation period will close at 11:59 pm on Friday 2 October 2026.

DEECA will also offer targeted consultation sessions on the LEU Access Initiative with key industry stakeholders. These sessions are designed to provide stakeholders the opportunity to provide detailed verbal feedback.

Please send an email to the VEU team if you are interested in a session.

Attend the webinar

An information webinar has been scheduled on Thursday 17 September 2026 to explain the proposed changes. Register for the webinar.

Industrial heat decarbonisation

Across March and April 2026, DEECA consulted on the inclusion of industrial heat decarbonisation activities in the VEU program. The proposed changes included the addition of 3 specified measurement methods under Project based Activities (PBA) for:

  • electric thermal energy storage (eTES)
  • gas efficiency upgrades
  • behind-the-meter biogas.

DEECA received 34 submissions from a range of stakeholders. DEECA would like to thank all organisations and individuals for taking the time to provide feedback.

Following consultation, DEECA has released the response to consultation on the Engage Victoria webpage.

The proposed reforms will include 4 new methods that are proposed to be introduced into the project-based activities framework that can support large industrial gas users to electrify or reduce their greenhouse gas emissions:

  • electric thermal energy storage (eTES)
  • heat demand reduction
  • gas boiler efficiency improvement
  • behind-the-meter biogas.

DEECA will finalise updates to the Measurement and Verification Specifications to include new industrial heat activities in September 2026, and these will be published in the Government Gazette and on DEECA’s Industry project-based activities website.

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Page last updated: 03/09/26