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Melbourne Water

Melbourne's water
storages are currently

35.9%

Water Trading and Transfers

Yarra River
Trading water entitlements

Water trading is the buying and selling of water entitlements at a price determined by market conditions. Water users can trade water to others and can buy additional water from other licence holders.

The buyer and seller determine prices and all water trades must be approved by Melbourne Water. We will only approve trades that do not significantly impact the security of supply of other licence holders or the environment.

Given that the Yarra Basin has been under some stress from existing water demands, in October 2006 a licensing cap was placed on the taking of additional water for commercial and irrigation use within the catchment. The cap means that no increase in allocations can occur in the Yarra Basin. People wanting to obtain new or additional allocations must now purchase these through the water trading marketplace.

Water trading in other parts of Victoria has shown that an open trading marketplace can increase the value of water as a resource, encourage the movement of water to higher value uses and transfer water away from areas stressed due to over-allocation.

Trading allows users to:

  • increase their water reliability
  • manage droughts
  • expand their irrigation business
  • scale down their irrigation business, or move to less irrigation.

Because unused water has a market value, there is extra incentive to improve water use efficiency and improve economic and environmental performance.

Water trading is also a cornerstone of the national water reform agenda, a strategy agreed by the Commonwealth, States and Territories to promote a sustainable and efficient irrigation industry while making sure our rivers stay healthy.