diff --git a/src/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer/Phase7Applier.cs b/src/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer/Phase7Applier.cs
index f66b90f3..fa36c740 100644
--- a/src/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer/Phase7Applier.cs
+++ b/src/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer/Phase7Applier.cs
@@ -238,6 +238,53 @@ public sealed class Phase7Applier
             composition.EquipmentTags.Select(t => t.EquipmentId).Distinct(StringComparer.Ordinal).Count());
     }
 
+    /// <summary>
+    ///     Materialise Equipment-namespace VirtualTags from a composition snapshot — the VirtualTag
+    ///     analogue of <see cref="MaterialiseEquipmentTags"/>. For each <see cref="EquipmentVirtualTagPlan"/>,
+    ///     ensure its optional <c>FolderPath</c> sub-folder under the existing equipment folder (in
+    ///     practice <c>FolderPath</c> is empty for VirtualTags, so this is usually a no-op), then ensure
+    ///     a Variable inside it. Like the tag pass, the variable's NodeId is FOLDER-SCOPED
+    ///     (<c>parent/Name</c>) — NOT the <see cref="EquipmentVirtualTagPlan.VirtualTagId"/> or
+    ///     <see cref="EquipmentVirtualTagPlan.Expression"/> — so identically-named VirtualTags on
+    ///     different equipments never collide in the sink (which keys on NodeId). Variables start
+    ///     BadWaitingForInitialData; <c>VirtualTagActor</c> fills live values in a later milestone.
+    ///     Idempotent (per-variable idempotency relies on the sink's own <c>EnsureVariable</c>).
+    /// </summary>
+    /// <param name="composition">The composition result containing the equipment VirtualTags to materialise.</param>
+    public void MaterialiseEquipmentVirtualTags(Phase7CompositionResult composition)
+    {
+        ArgumentNullException.ThrowIfNull(composition);
+        if (composition.EquipmentVirtualTags.Count == 0) return;
+
+        // Sub-folders first — a VirtualTag's FolderPath becomes one folder UNDER its equipment folder
+        // (deduped per distinct equipment+path). VirtualTags with no FolderPath hang directly under the
+        // equipment folder, which MaterialiseHierarchy already created (never re-create it here).
+        var foldersCreated = new HashSet<string>(StringComparer.Ordinal);
+        foreach (var v in composition.EquipmentVirtualTags)
+        {
+            if (string.IsNullOrWhiteSpace(v.FolderPath)) continue;
+            var folderNodeId = EquipmentSubFolderNodeId(v.EquipmentId, v.FolderPath);
+            if (!foldersCreated.Add(folderNodeId)) continue;
+            SafeEnsureFolder(folderNodeId, parentNodeId: v.EquipmentId, displayName: v.FolderPath);
+        }
+
+        // Variables: NodeId is FOLDER-SCOPED ("<parent>/<Name>"), mirroring the equipment-tag pass.
+        // Parent is the FolderPath sub-folder when set, else the equipment folder directly.
+        foreach (var v in composition.EquipmentVirtualTags)
+        {
+            var parent = string.IsNullOrWhiteSpace(v.FolderPath)
+                ? v.EquipmentId
+                : EquipmentSubFolderNodeId(v.EquipmentId, v.FolderPath);
+            var nodeId = $"{parent}/{v.Name}";
+            SafeEnsureVariable(nodeId, parent, v.Name, v.DataType);
+        }
+
+        _logger.LogInformation(
+            "Phase7Applier: equipment virtualtags materialised (vtags={Vtags}, equipment={Equipment})",
+            composition.EquipmentVirtualTags.Count,
+            composition.EquipmentVirtualTags.Select(v => v.EquipmentId).Distinct(StringComparer.Ordinal).Count());
+    }
+
     /// <summary>Deterministic NodeId for a tag's FolderPath sub-folder, scoped under its equipment
     /// folder so two equipments' identically-named sub-folders never collide.</summary>
     private static string EquipmentSubFolderNodeId(string equipmentId, string folderPath) =>
diff --git a/src/Server/ZB.MOM.WW.OtOpcUa.Runtime/OpcUa/OpcUaPublishActor.cs b/src/Server/ZB.MOM.WW.OtOpcUa.Runtime/OpcUa/OpcUaPublishActor.cs
index 3d8a735c..eac0cbe5 100644
--- a/src/Server/ZB.MOM.WW.OtOpcUa.Runtime/OpcUa/OpcUaPublishActor.cs
+++ b/src/Server/ZB.MOM.WW.OtOpcUa.Runtime/OpcUa/OpcUaPublishActor.cs
@@ -237,6 +237,11 @@ public sealed class OpcUaPublishActor : ReceiveActor
             // clients can browse them. Live values arrive in a later milestone; until then the
             // variables show BadWaitingForInitialData.
             _applier.MaterialiseEquipmentTags(composition);
+            // Equipment-namespace VirtualTags get their own pass right after the equipment tags:
+            // ensures each computed signal's Variable (and any FolderPath sub-folder) exists under its
+            // equipment folder with a folder-scoped NodeId. The VirtualTagActor fills live values in a
+            // later milestone; until then the variables show BadWaitingForInitialData (same as tags).
+            _applier.MaterialiseEquipmentVirtualTags(composition);
 
             OtOpcUaTelemetry.OpcUaSinkWrite.Add(1, new KeyValuePair<string, object?>("kind", "rebuild"));
             _log.Info("OpcUaPublish: applied rebuild (correlation={Correlation}, added={Added}, removed={Removed}, changed={Changed}, rebuild={Rebuild})",
diff --git a/tests/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer.Tests/Phase7ApplierTests.cs b/tests/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer.Tests/Phase7ApplierTests.cs
index 1136fdba..7e09f541 100644
--- a/tests/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer.Tests/Phase7ApplierTests.cs
+++ b/tests/Server/ZB.MOM.WW.OtOpcUa.OpcUaServer.Tests/Phase7ApplierTests.cs
@@ -257,6 +257,60 @@ public sealed class Phase7ApplierTests
         sink.VariableCalls.ShouldContain(("eq-2/Speed", "eq-2", "Speed", "Float"));
     }
 
+    /// <summary>Verifies MaterialiseEquipmentVirtualTags creates one Variable per VirtualTag directly
+    /// under its existing equipment folder, with a folder-scoped NodeId (EquipmentId/Name — NOT the
+    /// VirtualTagId or Expression), parent == EquipmentId, displayName == Name, and does NOT re-create
+    /// the equipment folder (no sub-folder when FolderPath is empty).</summary>
+    [Fact]
+    public void MaterialiseEquipmentVirtualTags_creates_variable_under_equipment_folder()
+    {
+        var sink = new RecordingSink();
+        var applier = new Phase7Applier(sink, NullLogger<Phase7Applier>.Instance);
+
+        var composition = new Phase7CompositionResult(
+            Array.Empty<EquipmentNode>(), Array.Empty<DriverInstancePlan>(), Array.Empty<ScriptedAlarmPlan>())
+        {
+            EquipmentVirtualTags = new[]
+            {
+                new EquipmentVirtualTagPlan("vt-1", "eq-1", FolderPath: "", Name: "speed-rpm", DataType: "Float64",
+                    Expression: "ctx.GetTag(\"x\") * 60", DependencyRefs: new[] { "x" }),
+            },
+        };
+
+        applier.MaterialiseEquipmentVirtualTags(composition);
+
+        sink.FolderCalls.ShouldBeEmpty(); // equipment folder already exists; no sub-folder needed
+        sink.VariableCalls.ShouldHaveSingleItem().ShouldBe(("eq-1/speed-rpm", "eq-1", "speed-rpm", "Float64"));
+    }
+
+    /// <summary>Two VirtualTags under the SAME equipment produce two distinct folder-scoped variables
+    /// (one EnsureVariable each, no NodeId collision), parented to the equipment folder.</summary>
+    [Fact]
+    public void MaterialiseEquipmentVirtualTags_two_under_same_equipment_do_not_collide()
+    {
+        var sink = new RecordingSink();
+        var applier = new Phase7Applier(sink, NullLogger<Phase7Applier>.Instance);
+
+        var composition = new Phase7CompositionResult(
+            Array.Empty<EquipmentNode>(), Array.Empty<DriverInstancePlan>(), Array.Empty<ScriptedAlarmPlan>())
+        {
+            EquipmentVirtualTags = new[]
+            {
+                new EquipmentVirtualTagPlan("vt-a", "eq-1", FolderPath: "", Name: "speed-rpm", DataType: "Float64",
+                    Expression: "ctx.GetTag(\"a\")", DependencyRefs: new[] { "a" }),
+                new EquipmentVirtualTagPlan("vt-b", "eq-1", FolderPath: "", Name: "load-pct", DataType: "Float64",
+                    Expression: "ctx.GetTag(\"b\")", DependencyRefs: new[] { "b" }),
+            },
+        };
+
+        applier.MaterialiseEquipmentVirtualTags(composition);
+
+        sink.FolderCalls.ShouldBeEmpty();
+        sink.VariableCalls.Count.ShouldBe(2);
+        sink.VariableCalls.ShouldContain(("eq-1/speed-rpm", "eq-1", "speed-rpm", "Float64"));
+        sink.VariableCalls.ShouldContain(("eq-1/load-pct", "eq-1", "load-pct", "Float64"));
+    }
+
     /// <summary>Verifies that added equipment tags in an otherwise-empty plan trigger an
     /// address-space rebuild (parity with the Galaxy-tag path — the planner now diffs equipment
     /// tags, so a tags-only deploy is no longer a silent no-op).</summary>