> Water and River Murray > Licences, allocations and markets

Water markets and trade

Water markets

Water trade allows for the efficient redistribution of water and is an important mechanism for managing scarce water resources.

The established and emerging water markets for other prescribed water resources in South Australia are:

southern-connected Murray-Darling Basin (see below)
parts of the South East
Mount Lofty Ranges
elsewhere in the South Australian Murray-Darling Basin.

We are working to improve the efficiency and effectiveness of water trade markets, such as by improving information provision and reducing barriers to trade.

Murray-Darling Basin water market

The southern-connected Murray-Darling Basin water market is a water resource covering parts of South Australia, New South Wales and Victoria.

It is one of the most mature water markets in the world and is based on a 'cap and trade' system. This means the cap - the total pool of water available for consumptive use - can only move among licence holders and to new businesses by trade.

There are two main types of water rights traded in the Basin:

Water access entitlements are rights to an ongoing share of the total amount of water available in a system.
Water allocations are the actual amounts of water available under water access entitlements in a given season.

See the MDBA's information on water market products, also called tradeable water rights, and the Department of Climate Change, Energy, Environment and Water (DCCEEW)'s information on water markets in Australia.

Water markets and trade — Major tributary rivers of the Southern Connected System

Water market reform

On 11 October 2022, the Minister for the Environment and Water, released the Water market reform: final roadmap report. The Roadmap includes 23 recommendations to drive water markets reforms. The Roadmap addresses the findings of the Australian Competition and Consumer Commission (ACCC) Murray–Darling Basin water markets inquiry final report, published in March 2021.

On 07 December 2023, the Water Amendment (Restoring Our Rivers) Act 2023 was enacted. The Australian Government is working with all Basin jurisdictions to implement the water market reforms. Information about the water market reforms and consultation can be found here.

Water trade

Water trade allows water to flow to where it can be used most productively, or has the highest value, through the redistribution of water rights including water licences, water access entitlements and water allocations.

Water trading has become a vital business tool for water rights holders, providing an effective way of managing changing use requirements, climate variability and reallocating water during prolonged periods of drought.

The trade of a water right can mean a transfer of ownership, a change of location, or both. Trade can also be undertaken on a permanent or temporary (i.e. lease) basis, and a person/s may seek to trade all or only part of their entitlement or allocation.

A transfer of ownership occurs when the registered holder of the water right changes from one person (the seller) to another (the buyer).
A change of location occurs when the location where water will be used is changed. The buyer of the water right may need to vary their license use conditions or relevant use approvals (site use approval or water resource works approval) depending on whether the transfer occurs in a bundled or unbundled water resource.

In general, we approve trade applications provided that:

there is a sufficient volume of water available to trade
all associated fees, charges and debts have been paid
the trade meets relevant trading rules and water allocation plan principles.

Trading rules and water allocation plan principles aim to ensure that water trade does not result in detrimental impacts to the environment, the water resource or other water users.

A record of all water trades we have approved, including price information (when provided), is publicly accessible for viewing and download at the WaterConnect.

All statewide water licence and permit application forms, including those that facilitate water trade are available for download.

Your local Trade Approval Authority can support you with your trade application.

Want to know more about the water trading rules? See the Landscape South Australia Act 2019.

Water trade dashboards

Water trade dashboards provide better information about trading in the South Australian River Murray. Check out these dashboards, which include data on the volume and price of water traded through time: