Water trading is essentially about buying and selling water separate to the sale of land, and markets are being established in Queensland.

Water trading is a key element of the National Water Initiative agreed by the Australian, state, and territory governments to drive water reform at the national level, by promoting a sustainable and efficient irrigation industry while ensuring that our rivers stay healthy.

Currently, there are markets only for surface water, but markets for underground water will be developed where conditions allow.

Water trading is voluntary and the prices are set by the market.

• Water trading in Queensland 
• Benefits of water trading 
• Why is water trading necessary? 
• Where is water currently being traded? 
• Water trading rules

Water trading in Queensland

In Queensland, water trading includes the buying and selling of water allocations or the water available under a water entitlement (i.e. water licences, interim water allocations or water allocations). In certain parts of the state, interim water allocations can also be permanently transferred.

Queensland’s expanding water markets are making it possible for users to respond more quickly to new business opportunities. Trading will provide certainty, encourage investment in new technologies, promote better water management strategies, and increase environmental protection.

See Water trading: an overview of Queensland water markets (PDF 102 kB)* for more information.

Benefits of water trading

Water trading enables users to make considered decisions about water use, and to tailor water allocations to their needs, with the market setting or determining price. Over time, this promotes efficiency and the development of more profitable businesses.

Trading:

• helps people clearly see the value of their water as a secure asset, and obtain finance against its value
• encourages water-use efficiency by allowing allocation holders to sell, lease or seasonally assign spare water
• enables retiring landholders or those wanting to stop production to sell their water without selling their land
• enables users to increase water supplies and improve the reliability of current allocations, and to switch to crops that generate higher returns
• enables new industries to acquire water without jeopardizing the environment, or affecting other water users.

Why is water trading necessary?

Queensland’s highly variable rainfall, combined with increasing demand and competition for its water resources means that we need to be able to adapt quickly  by reallocating water in response to changes in:

• markets for farm products and other industries
• environmental conditions
• the size of cities and towns
• availability of water caused by climate change and other factors.

Trading is a way of achieving this, while enabling users to reallocate water voluntarily. It also sends market signals that encourage users to:

• value the resource appropriately
• use water more efficiently
• direct water to its most productive use.

Establishing water markets in a fair and open way provides certainty for the water industry and for the environment, helping to create a stable and more attractive business environment.

Where is water currently being traded?

Water trading is available only in areas where water allocations have been established on completion of a water planning process. These processes are continuing throughout Queensland and, as more resource operations plans are completed, opportunities for trading of water in most catchments in Queensland, including some trading of groundwater, will follow.

Water trading may also be introduced in areas where water allocations have not yet been established, but where demand exists and environmental risks associated with trading can be managed (e.g. the trading of interim water allocations in the Mary River Basin).

Water resource plans information sheet  (PDF, 98 kB).*

Water trading rules

To ensure that the effects of water trading comply with requirements for the security of water allocations and environmental flow objectives, specific rules apply to water trading activities (e.g. seasonal water assignments, changes, subdivisions and amalgamations). These trading rules are included in the resource operations plan for each area.

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