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University of Tasmania

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Sustainable Hydrogen Certification:
A Multistakeholder Governance Approach
(ARC Linkage Grant LP200301578)

TO: Department of Climate Change, Energy, the Environment and Water
By Email: GuaranteeofOrigin@industry.gov.au

03 February 2023

To Whom It May Concern,
Re: Hydrogen Guarantee of Origin consultation paper.

The research team welcomes the opportunity to provide comment on the proposed GO scheme,
and Renewable Energy Certification paper.

We note that our research seeks to consider a range of issues that may impact on the efficacy
and credibility of future hydrogen certification schemes, including consideration of
environmental issues beyond merely a narrow emissions focus, appropriate scheme
governance, and the implications of these factors for social acceptance of the emerging
hydrogen industry.

We acknowledge the importance of a robust emissions accounting methodology as the
foundation for the certification framework, and to that end are broadly supportive of the policy
direction taken by the GO consultation paper, noting some of the considerations outlined below.
In particular, the intention that Product GOs remain attached to products and are not tradeable
is extremely important for consumers in terms of ability to understand the provenance of the
product, as well as for the credibility of the scheme more generally. The team therefore strongly
supports Policy Position 7: Product GOs will use a provenance approach, while REGOs are able
to be traded independently of the electricity they were created alongside.

The team notes the following feedback in regards to the policy positions stated in the GO paper:

Policy Position 3: There will be no minimum emissions intensity requirements for Product GOs
and participation will be voluntary for both Product GOs and REGOs.
• While having no minimum emissions intensity requirements for Product GOs may make
sense from an Australian producer perspective, it would be important to know that it
also makes sense from a foreign consumer perspective. The stakeholder consultations
undertaken appear to have reflected mainly the Australian producer perspective and
there is a concern that consumers in Europe, Japan, and South Korea and elsewhere
may have or come to have a different perspective over time.
• Consider the situation of a European consumer of hydrogen wanting to know they are
consuming Green hydrogen and being able to purchase hydrogen from several sources
each of which offers its own GO-type scheme. A few of the GO schemes have set
minimum intensity requirements and have branded their hydrogen as Green or Blue,
whereas hydrogen from Australia is not so branded but comes with only a statement of

Politics & IR Discipline
School of Social Sciences
University of Tasmania
Locked Bag 1450 T +61 3 6324 3376
Launceston, TAS E Fred.Gale@utas.edu.au
7050 CRICOS Provider Code 00586B | ABN 30 764 374 782 utas.edu.au
Australia
Sustainable Hydrogen Certification:
A Multistakeholder Governance Approach
(ARC Linkage Grant LP200301578)

its energy intensity. It may be easier for the consumer—and the retailers selling
hydrogen to the consumer—to source hydrogen from a GO scheme that is explicitly
Green or Blue than to opt for a ‘no name’ entity. While the actual content of the
hydrogen may be identical, retailers and consumers may have the impression that the
credence value of zero and low carbon hydrogen badged as Green and Blue is higher
than a GO scheme that is not so badged. It would thus be very important to have market
tested somehow the ‘no minimum intensity’ requirement with potential major
consumers of Australian hydrogen.

Policy Position 5: The scheme will be reviewed in 2025 and every five years thereafter to
ensure it is fit for purpose and able to support the industry.
• Given how fast moving the green, renewable, sustainable hydrogen space is, it may
make sense to review the scheme in 2025 and every three years thereafter.

Policy position proposal 6: Product GOs and REGOs will be housed on a publicly visible register
with general information and the ability to share specific information with other scheme
participants.
• This is a potentially big issue. The current focus of GOs is almost exclusively on
specifying the emissions intensity of the produced hydrogen. However, there are a large
number of other features of hydrogen production that may come into public and
consumer focus as the industry scales up and roles out. These include water sources,
additional energy infrastructure permissions and construction (both onshore and
offshore) and associated biodiversity impacts, community social licence, and Indigenous
peoples' rights. Ideally, a GO scheme would scale up to being a Sustainable Hydrogen
Certification scheme to ensure all these impacts are addressed right at the beginning
rather than being added in after the fact. However, there appears to be little political
will to take this route among governments globally at the moment. Given that, we
propose only that water sources and volumes be included in the GO scheme and made
publicly available to ensure full disclosure of this critical feature of hydrogen production.

Policy position proposal 13: The CER will undertake compliance monitoring and will have
regulatory powers to address non-compliance.
• The proposal positions CER to both run and monitor the scheme generating a potential
conflict of interest. Given that the CER will run the scheme on a cost-recovery basis and
earn revenue from doing so, it may find itself in a conflict of interest over its monitoring
role when instances of non-compliance are uncovered. We believe it would be best
practice to separate out the running of the CER from the monitoring and compliance
arrangements and establish a separate body to undertake the latter.

The team also notes the following matters with regard to the Renewable Energy Certification
paper:

Policy position proposal 14: The Department proposes that anyone may surrender a REGO at
any time, including for the purpose of creating a product Guarantee of Origin certificate.

• The proposal that a REGO would have no time restrictions in terms of ability to be
surrendered seems unusual, and again may risk impacting on the incentive for new
renewable development. A medium-term expiry date, for instance 3-to-5-years from
certificate creation, may be worth considering.

Additional matters for the consideration of the Department, but not related to any of the
particular policy positions outlined in the consultation documents, are noted below:

• The paper offers little in the way of detail for how the Department sees renewable
energy certificate markets developing beyond the sunset of the RET in 2030.
Acknowledging that this is some time away, and there may be an intent to revisit this
issue, the team notes some potential issues that may arise. In particular, the falling away
of mandatory LGC surrender requirements has the potential to lead to a sharp reduction
in the market price for both LGCs and REGOs, with implications for the commerciality of
new entrant renewable generation at this time – as well as uncertainty for development
projects in the lead up to 2030. It may be that the flood of available certificates on the
supply side diminishes any incentive for development of new renewables.
• While the papers both note the stakeholder consultation that has been undertaken to
date, we understand that this has had a relatively heavy industry focus. A disaggregation
of the stakeholder groups that have been engaged at each stage would be valuable to
see and, personal interest here noted, greater involvement of the academic community
would also be valuable in future rounds of consultation. This would enable the
considerable theory background and experience with similar certification processes in
other industries to be brought to bear on this work.

We look forward to the opportunity for further engagement with the Department as the scheme
development continues.

Sincerely,

Professor Fred Gale

This text has been automatically transcribed for accessibility. It may contain transcription errors. Please refer to the source file for the original content.

Australia’s Guarantee of Origin Scheme: consultation papers