Australia’s Guarantee of Origin Scheme: consultation papers

ORICA AUSTRALIA’S GUARANTEE OF ORIGIN SCHEME & RENEWABLE
ELECTRICITY CERTIFICATION 1

AUSTRALIA’S GUARANTEE
OF ORIGIN SCHEME &
RENEWABLE ELECTRICITY
CERTIFICATION
ORICA SUBMISSION – FOR PUBLIC RELEASE
3 FEBRUARY 2023

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ORICA AUSTRALIA’S GUARANTEE OF ORIGIN SCHEME & RENEWABLE
ELECTRICITY CERTIFICATION 2

INTRODUCTION

Orica, headquartered in Australia and ASX100 listed, is one of the world’s leading mining and infrastructure solutions providers, operating in 100 markets. From the production and supply of explosives, blasting systems, mining chemicals and geotechnical monitoring, to our cutting-edge digital solutions and comprehensive range of services, we sustainably mobilise the earth’s resources.

Orica supports the Federal Government’s legislated 43% emissions reduction target and suite of
Powering Australia policies, including Safeguard Mechanism reforms presently underway. Orica is committed to achieving net zero emissions by 2050, with an interim operational emissions reduction target of at least 40% by 2030 based on 2019 levels.

At the end of the 2022 reporting period, global Scope 1 and 2 net emissions were 14% below our 2019 baseline. In 2022, Orica set a renewable electricity target committing to sourcing 100% renewable electricity by 2040, with an interim step of 60% by 2030.

ORICA AND ENVIRONMENTAL MARKETS
Orica led the chemical industry in Australia in setting voluntary corporate emissions reduction targets; to reduce operational Scope 1 and Scope 2 emissions by at least 40% compared to 2019 levels. At the end of FY2022 our Scope 1 and 2 net emissions totalled 1,883 ktCO2-e, which represents a 14% reduction compared to 2019 levels. In 2022, Orica also set a target to source 100% renewable electricity by 2040 with an interim step of 60% by 2030.

Orica has secured future renewable electricity supply in New South Wales through a power purchase agreement. We are also investing in capital-intensive abatement projects. This includes deploying tertiary catalyst abatement technology to Australia for the first time at our Newcastle nitric acid plants on Kooragang Island. Both of Orica’s Australian continuous manufacturing facilities (Kooragang Island,
Yarwun) have registered projects under the Emissions Reduction Fund (ERF), which gives Orica the ability to generate Australian Carbon Credit Units (ACCUs).
Efforts to accelerate Orica’s decarbonisation have relied on environmental markets and the financial and product development incentives they provide. This is leading to new opportunities to develop renewable energy and lower carbon products to meet growing customer interest. Together with growing regulatory focus on environmental claims, these conditions present a need for transparent, consistent, and trusted emissions accounting approaches to underpin renewable energy and lower carbon products.

GUARANTEE OF ORIGIN SCHEME & RENEWABLE ELECTRICITY CERTIFICATION
Orica understands that a key driver for the creation of a Guarantee of Origin scheme (GO scheme) is to offer information to verify claims made in relation to low carbon or green products. Orica strongly supports this primary objective and welcomes the opportunity to submit feedback on the scheme.

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ORICA AUSTRALIA’S GUARANTEE OF ORIGIN SCHEME 3

In this submission we have focussed at a high-level on the areas of principle interest rather than detailed responses to each proposed policy position.

In summary, Orica supports:

• The primary objectives of the proposed GO scheme and continued Renewable Electricity
Certification, voluntary participation in the GO scheme, and encourages policy design with a strong
focus on design principles of traceability and transparency.
• A GO scheme designed to align internationally and integrate with existing and emerging domestic
frameworks (e.g. NGER, Safeguard Mechanism, Renewable Energy Certificates, others). This
approach avoids legislative duplication, reduces administrative and reporting burden, and delivers
efficient policy outcomes.
• The creation of Renewable Electricity GOs (associated with tracking renewable electricity
generation) to give industry certainty for the market transition from existing tradable Renewable
Energy Certificates. Orica welcomes this development as it gives investment and reputational
confidence that renewable electricity claims can be made post-2030 to meet our corporate target.
• The proposal for Product GOs to initially cover hydrogen and hydrogen energy carriers (in Orica’s
case ammonia) is strongly supported. As the green hydrogen and ammonia industry emerges, we
are observing commercial arrangements are already exploring product traceability considerations
and the role of Product GOs.
• The proposed policy position pertaining to treatment of Australian Carbon Credit Units (ACCUs).
Where ACCUs are originated by a facility we support the requirement that surrender of those units
is necessary to lower product emissions intensity. This avoids double-counting and prioritises efforts
to reduce the emissions from production processes. Companies should not secure “greener”
certifications through the purchase and use of offsets under the Product GO scheme. There are
existing schemes (e.g. Climate Active) that facilitate other types of environmental claims from
carbon offsets such as carbon neutral products.

Industry trials for Australia’s GO Scheme are underway and Orica is pleased to be participating in phase
2 – hydrogen carriers. The results of the trials, along with future work by the government, will be important for the final design of the GO Scheme.

Questions about this submission, can in the first instance be directed to Mel Cheesman, Head of Government and Regulation via email – mel.cheesman@orica.com.

Your Sincerely,

Paul Evans – Global Vice President, Corporate Affairs

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