Published name
Policy position proposal 1: The scheme will be covered under new legislation administered by the CER. This proposal relates to pages 13-14 of the GO paper.
Kawasaki Heavy Industries (KHI) supports the Australian Government’s intention to legislate the Guarantee of Origin for Hydrogen. The timely ability for hydrogen projects located in Australia to credibly report on the carbon footprint of their hydrogen will be critical to build demand and trust with consumers and generate interest in long-term agreements for offtake.
Understanding there will be linkages between the NGER reporting of emissions and various supply chain elements, KHI welcomes the introduction of bespoke legislation that creates a clear delineation between mandatory NGER reporting and a voluntary Guarantee of Origin scheme.
The introduction of new legislation will allow the Australian Government to appropriately engage with industry and mould a new scheme to better align with emerging internationally accepted standards of emissions intensity reporting for hydrogen.
KHI supports the Australian Government’s ambition to legislate the scheme by 2024. However, it will be vital to the success of the scheme that meaningful consultation with industry takes place to ensure the development of underpinning accounting methodologies, many of which are still in their infancy.
Policy position proposal 2: The Product GOs will cover the well-to-user system boundary. This proposal relates to pages 14-15 of the GO paper.
KHI broadly supports the inclusion of additional downstream supply chain steps within the scope of the scheme by extending the system boundary from ‘well-to-gate’ to ‘well-to-user.’
This extended boundary ensures that the scheme will deliver on consumer expectations for emissions intensity provenance information. However, additional certainty is needed on the downstream ‘user’ boundary as it applies to hydrogen export supply chains, and more information is needed on the respective roles and responsibilities of different parties within the system boundaries. Additional time is also needed to test the IPHE methodologies that are being developed to cover the transport, storage and hydrogen energy carriers in the Australian context.
Per the policy position paper, the updated boundary is described as the ‘point of consumption or international departure’. KHI would welcome additional clarity on how the scheme and its ‘well-to-user’ boundary would apply to the export of hydrogen from Australia.
KHI interprets the policy position to mean the boundary at the point of ‘international departure’ would be set at the liquid terminal’s loading arm flange being the custody transfer point for liquefied hydrogen exports based on Free on Board (FOB) shipping terms. Under this interpretation, it would be logical for the exporter to be considered the GO consumer, and KHI understands that the emissions from international shipping, offloading and consumption of exported hydrogen would not be accounted for within the scope of the scheme.
However, KHI notes that Japanese consumers will be interested in the impact of these marine transportation activities on the overall embodied emissions profile of imported hydrogen. As a company that has been investing heavily to develop the most sustainable means of shipping hydrogen for over 10 years, KHI is committed to providing offtakers with full transparency on the emissions associated with the shipment of hydrogen energy carriers such as liquified hydrogen and ammonia.
While KHI acknowledges that the reporting of such emissions may not need to occur within the Australian GO scheme, the Australian Government should not assume that these emissions will be captured by schemes coordinated from within importing markets. The GO scheme is likely to set the precedent for similar schemes around the world, and KHI encourages the Australian Government to continue working with the Japanese Government and key international stakeholders at the IPHE to ensure that government backed hydrogen methodologies and certifications encompass the emissions associated with the marine transportation of hydrogen energy carriers.
If ultimately the GO scheme does not capture the emissions associated with marine transportation activities, the Australian Government should still proactively ensure that the GO scheme approach can readily be integrated or recognised by equivalent international schemes that do encompass this supply chain element.
Policy position proposal 3: There will be no minimum emissions intensity requirements for Product GOs and participation will be voluntary for both Product GOs and REGOs. This proposal relates to page 15 of the GO paper.
Policy position proposal 4: The GO scheme will be cost recovered in line with Australian Government policy. This proposal relates to page 15 of the GO paper.
KHI is comfortable with an approach to cost recovery being designed in line with standard Australian Government policy and would welcome an opportunity to engage with this process through the stakeholder consultation outlined in that policy.
The consultation paper notes “it is anticipated that cost recovery would not commence until the industry has matured and becomes competitive with existing energy sources.” KHI would value further indication from the Australian Government on how market maturity and competitiveness with existing energy sources will be assessed.
Cost recovery should not be contemplated until the industry is mature. Transparent runways on cost recovery timelines and amounts should also be provided well in advance of the introduction of cost recovery measure, so that hydrogen proponents have the certainty they need to continue investing in hydrogen projects.
Policy position proposal 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. This proposal relates to page 16 of the GO paper.
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 proposal relates to page 17 of the GO paper.
KHI believes the key information that should be made available on the publicly visible register is the emissions intensity (number of tonnes of CO2 emitted per tonne of hydrogen produced) that is associated with each batch of hydrogen. It is possible that other information could be commercial in confidence and excessive to the needs of consumers that are simply trying to decide on the emissions intensity and price points that meet their hydrogen needs.
Policy position proposal 7: Product GOs will use a provenance approach, while REGOs are able to be traded independently of the electricity they were created alongside. This proposal relates to pages 17-18 of the GO paper.
KHI is supportive of an approach to Product GOs that allows for hydrogen produced in Australia to attract certification that can be traded alongside the product itself while having the flexibility to recognise that molecules may be interchangeable during transport and storage.
The example provided in the position paper allows the use of Product GOs by consumers where clean hydrogen has been comingled with methane in a natural gas network, where that consumer has accessed that network. This appears in some respects to align with a mass balance approach to certification within Australia’s domestic market. However, it is not clear in the consultation paper where the consumption of hydrogen is considered to have taken place at the point of export or internationally, how scheme participants will be required to establish ‘a reasonable physical link […] between the clean hydrogen and the Product GO,’ as noted on page 18.
As a company anticipating that it will be comingling different batches of hydrogen for storage, liquefaction and transportation, KHI calls on the Australian Government to provide further information on how the provenance approach will apply in practice. KHI also advocates for continued collaboration and consultation with international stakeholders to ensure this physical link requirement aligns with the processes and expectations of export markets to reduce the risk of creating barriers to market access.
Separately, KHI is broadly supportive of the suggested approach to the trade of REGOs. KHI is committed to the use of renewable energy at its facilities and welcomes the recognition of that renewable energy use at downstream facilities within GO system boundaries. It also supports the ability for REGOs to be independently traded and voluntarily surrendered to support additional generation of electricity from renewable energy sources.
Policy position proposal 8: An upfront data reporting model will be implemented to provide a practical reporting process. This proposal relates to pages 19-20 of the GO paper.
For large scale hydrogen producers an upfront data reporting model will support efficiency of GO creation and surrender. However, as noted previously, further information about role profiles is needed.
It is not clear within this policy position proposal if or how an international ‘GO Consumer’ will participate in the scheme to report on how the hydrogen is used. Within Attachment A (page 49) the Consumer profile overview notes that the profile includes “Consumption purpose (including export)” but it is not clear if this intends for export to be a ‘consumption purpose’ or if international consumers of hydrogen will be required to report their final use after export.
As noted in response to Question 2, KHI is supportive of the inclusion of downstream activities within the GO system boundaries. However, it is not clear if downstream activities conducted internationally, (i.e. where the hydrogen is exported) will be covered by the scheme.
In either scenario, limited information should have to be provided by exporting GO Consumers on the end use of the product following export, as this is likely to change and be difficult to track during transit to the final end user.
Policy position proposal 9: There will be four scheme participant roles with differing responsibilities and permissions. This proposal relates to pages 20-21 of the GO paper.
Based on the outline provided of the four GO scheme participant roles, it is likely that KHI would register as a GO intermediatory given it intends to liquefy gaseous hydrogen in Australia, store liquefied hydrogen portside and then export liquefied hydrogen from Australia via specialised marine carriers. However, depending on the contractual arrangements that KHI ultimately establishes for the export of hydrogen, it is possible that it may also take on the role of an exporting GO consumer (see response to Question 2).
The final policy should be clear on the roles and responsibilities of each of the four parties and there should be further consultation and testing to verify that the proposed arrangements are workable in practice, having regard to the potentially complex supply chains between production, use and export.
The final policy proposal should clarify how exporters of hydrogen and international consumers will be treated, particularly with regard to whether the ‘exporter’ or the final international consumer will be considered the ‘GO Consumer’. If the latter, KHI would seek clarification on how a GO Intermediary could surrender the Product GO if an international consumer of a Product GO did not want to accept the role of a GO Consumer and did not make their consumer profile data available.
Policy position proposal 10: The creation process will be implemented which combines batch data with the upfront profiles to create certificates. The creation period for GOs can range from a single hour to a year. This proposal relates to page 21 of the GO paper.
Policy position proposal 11: Product GOs are proposed to require creation and transport and storage information to be complete. Product GOs can then be surrendered and report consumption information. This proposal relates to page 22 of the GO paper.
Policy position proposal 12: REGOs are proposed to be available to be traded or surrendered after being validly created. This proposal relates to page 22 of the GO paper.
Policy position proposal 13: The CER will undertake compliance monitoring and will have regulatory powers to address non-compliance. This proposal relates to page 22 of the GO paper.
Policy position proposal 14: LSTRs will provide third-party assurance of the information reported under the GO scheme. The need for LSTRs will be front-loaded requiring less as time goes on and participants demonstrate compliance with the requirements of the scheme. This proposal relates to pages 23-24 of the GO paper.
Policy position proposal 15: Where Product GOs have incorrect information, they will be updated to reflect the most up to date information. After the ARC process, Product GOs will be finalised and not subject to further amendments. This proposal relates to page 25 of the GO paper.
KHI is supportive of scheme participants being able to amend Product GO information. The accuracy of emissions intensity data is vital to the credibility of the scheme and aligned with the expectations of hydrogen consumers. Clarity is needed on the intended threshold for errors requiring correction. KHI supports regular consultation on the GO scheme as it is developed so that industry can contribute its practical insights at key points in the development process.
Policy position proposal 16: Where REGOs have incorrect information, they will not be updated and instead will follow an ‘unders’ and ‘overs’ reconciliation process to minimise impacts on the renewable electricity certificate market. This proposal relates to page 26 of the GO paper.
Policy position proposal 17: The Department proposes the GO scheme methodologies will align where possible with the NGER and the Safeguard mechanism. This proposal relates to page 28 of the GO paper.
Policy position proposal 18: The CER will be able to establish formal data sharing arrangements with the administrators of these schemes to streamline the creation process. This proposal relates to page 28 of the GO paper.
Policy position proposal 19: Material emissions sources that must be measured for each product and production pathway will be specified in the methodologies. The sources will be selected based on materiality threshold of 2.5% of total emissions per source. This proposal relates to page 33 of the GO paper.
Defined limits placed on the materiality of various emissions sources should reflect a reasonable balance between the need to ensure emissions reporting accuracy and the practical burden of measurement and reporting.
KHI notes that the inclusion of downstream supply chain elements within the system boundaries for Product GOs and future development and definition of these emissions sources may impact the reasonableness of a 2.5% materiality.
To provide further feedback on this limit, it would be valuable for industry to understand if there will there be a cap imposed on the total emissions from all non-material sources (that do not exceed 2.5% of total emissions) which can be excluded from the calculation of emissions intensity. It is possible that more complex production methods will include a greater volume of emissions sources.
Further opportunities for industry consultation following the development of downstream supply chain methodologies will be needed to align with hydrogen customer expectations.
Policy position proposal 20: ACCUs issued from within the system boundary will need to be surrendered for the emissions reductions to be recognised under the GO scheme. ACCUs or other carbon offsets cannot be used to reduce the emissions intensity of products listed on GO certificates. This proposal relates to pages 34-35 of the GO paper.
KHI strongly supports the recognition of CCS as occurring within system boundaries for the purpose of calculating emissions intensity. While preferences for the use of various types of offsets may vary amongst international customers, the scheme should not support hydrogen production pathways that use fossil fuel without a process to capture associated carbon emissions.
KHI submits that technology for sequestration of carbon is rapidly developing. For that reason, the scheme should remain open to the recognition of abatement achieved through other methods in addition to CCS, where that technology and methodology is consistent with international practice and customer expectations.
Policy position proposal 21: LGCs and REGOs will be used to demonstrate renewable electricity use. Behind the meter or directly supplied renewable electricity will not require certificate surrender if none were created. This proposal relates to pages 35-36 of the GO paper.
Policy position proposal 22: A new RMF will be calculated for use within the GO scheme that is updated frequently and can be accessed by other market-based frameworks. This proposal relates to pages 36-37 of the GO paper.
Policy position proposal 23: RECs used to demonstrate renewable electricity usage in production of a GO product must have been issued within the previous 12 months. Additional information will be captured on REGOs to allow for voluntary time matching at a more granular level. This proposal relates to pages 37-38 of the GO paper.
Policy position proposal 24: The GO scheme will expand over time by incorporating new product-specific methodologies. A prioritisation, development and review process with industry input and international engagement will be established to ensure domestic applicability, international alignment, and continued suitability of legislation. This proposal relates to pages 38-39 of the GO paper.
Upload 1
H2 Guarantee of Origin
Consultation
Kawasaki Heavy Industries (KHI) Questionnaire Responses
8 February 2023
Questionnaire Table of Contents
Section Survey Questions
Legislation Overview 1-5
GO Certificates 6-7
Scheme Participation 8-12
Integrity Controls 13-16
Interactions with other 17-18 schemes
Emissions Accounting 19-24
Page 1 of 13
Legislation Overview
1. Policy position proposal 1: The scheme will be covered under
new legislation administered by the CER. This proposal relates to
pages 13-14 of the GO paper.
Please provide feedback on the proposed approach
KHI supports the Australian Government’s intention to legislate the Guarantee of
Origin for Hydrogen. The timely ability for hydrogen projects located in Australia to credibly report on the carbon footprint of their hydrogen will be critical to build demand and trust with consumers and generate interest in long-term agreements for offtake.
Understanding there will be linkages between the NGER reporting of emissions and various supply chain elements, KHI welcomes the introduction of bespoke legislation that creates a clear delineation between mandatory NGER reporting and a voluntary Guarantee of Origin scheme.
The introduction of new legislation will allow the Australian Government to appropriately engage with industry and mould a new scheme to better align with emerging internationally accepted standards of emissions intensity reporting for hydrogen.
KHI supports the Australian Government’s ambition to legislate the scheme by
2024. However, it will be vital to the success of the scheme that meaningful consultation with industry takes place to ensure the development of underpinning accounting methodologies, many of which are still in their infancy.
2. Policy position proposal 2: The Product GOs will cover the well-
to-user system boundary. This proposal relates to pages 14-15 of
the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
KHI broadly supports the inclusion of additional downstream supply chain steps within the scope of the scheme by extending the system boundary from ‘well-to- gate’ to ‘well-to-user.’
Page 2 of 13
This extended boundary ensures that the scheme will deliver on consumer expectations for emissions intensity provenance information. However, additional certainty is needed on the downstream ‘user’ boundary as it applies to hydrogen export supply chains, and more information is needed on the respective roles and responsibilities of different parties within the system boundaries. Additional time is also needed to test the IPHE methodologies that are being developed to cover the transport, storage and hydrogen energy carriers in the Australian context.
Per the policy position paper, the updated boundary is described as the ‘point of consumption or international departure’. KHI would welcome additional clarity on how the scheme and its ‘well-to-user’ boundary would apply to the export of hydrogen from Australia.
KHI interprets the policy position to mean the boundary at the point of
‘international departure’ would be set at the liquid terminal’s loading arm flange being the custody transfer point for liquefied hydrogen exports based on Free on
Board (FOB) shipping terms. Under this interpretation, it would be logical for the exporter to be considered the GO consumer, and KHI understands that the emissions from international shipping, offloading and consumption of exported hydrogen would not be accounted for within the scope of the scheme.
However, KHI notes that Japanese consumers will be interested in the impact of these marine transportation activities on the overall embodied emissions profile of imported hydrogen. As a company that has been investing heavily to develop the most sustainable means of shipping hydrogen for over 10 years, KHI is committed to providing offtakers with full transparency on the emissions associated with the shipment of hydrogen energy carriers such as liquified hydrogen and ammonia.
While KHI acknowledges that the reporting of such emissions may not need to occur within the Australian GO scheme, the Australian Government should not assume that these emissions will be captured by schemes coordinated from within importing markets. The GO scheme is likely to set the precedent for similar schemes around the world, and KHI encourages the Australian
Government to continue working with the Japanese Government and key international stakeholders at the IPHE to ensure that government backed hydrogen methodologies and certifications encompass the emissions associated with the marine transportation of hydrogen energy carriers.
If ultimately the GO scheme does not capture the emissions associated with marine transportation activities, the Australian Government should still proactively ensure that the GO scheme approach can readily be integrated or recognised by equivalent international schemes that do encompass this supply chain element.
Page 3 of 13
3. Policy position proposal 3: There will be no minimum emissions
intensity requirements for Product GOs and participation will be
voluntary for both Product GOs and REGOs. This proposal relates
to page 15 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
4. Policy position proposal 4: The GO scheme will be cost recovered
in line with Australian Government policy. This proposal relates
to page 15 of the GO paper.
Please provide any additional feedback on the proposed approach
KHI is comfortable with an approach to cost recovery being designed in line with standard Australian Government policy and would welcome an opportunity to engage with this process through the stakeholder consultation outlined in that policy.
The consultation paper notes “it is anticipated that cost recovery would not commence until the industry has matured and becomes competitive with existing energy sources.” KHI would value further indication from the Australian
Government on how market maturity and competitiveness with existing energy sources will be assessed.
Cost recovery should not be contemplated until the industry is mature.
Transparent runways on cost recovery timelines and amounts should also be provided well in advance of the introduction of cost recovery measure, so that hydrogen proponents have the certainty they need to continue investing in hydrogen projects.
5. Policy position proposal 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. This proposal relates to page 16 of
the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
Page 4 of 13
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
GO Certificates
6. 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 proposal relates to page 17 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide feedback on the types of information that should be
included on the publicly visible register for REGOs (e.g. time of
generation, grid location, end consumer etc) and Product GOs (e.g.
emissions intensity, volume, relevant inputs, end consumer etc)
KHI believes the key information that should be made available on the publicly visible register is the emissions intensity (number of tonnes of CO2 emitted per tonne of hydrogen produced) that is associated with each batch of hydrogen. It is possible that other information could be commercial in confidence and excessive to the needs of consumers that are simply trying to decide on the emissions intensity and price points that meet their hydrogen needs.
7. Policy position proposal 7: Product GOs will use a provenance
approach, while REGOs are able to be traded independently of
the electricity they were created alongside. This proposal relates
to pages 17-18 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Page 5 of 13
KHI is supportive of an approach to Product GOs that allows for hydrogen produced in Australia to attract certification that can be traded alongside the product itself while having the flexibility to recognise that molecules may be interchangeable during transport and storage.
The example provided in the position paper allows the use of Product GOs by consumers where clean hydrogen has been comingled with methane in a natural gas network, where that consumer has accessed that network. This appears in some respects to align with a mass balance approach to certification within
Australia’s domestic market. However, it is not clear in the consultation paper where the consumption of hydrogen is considered to have taken place at the point of export or internationally, how scheme participants will be required to establish ‘a reasonable physical link […] between the clean hydrogen and the
Product GO,’ as noted on page 18.
As a company anticipating that it will be comingling different batches of hydrogen for storage, liquefaction and transportation, KHI calls on the Australian
Government to provide further information on how the provenance approach will apply in practice. KHI also advocates for continued collaboration and consultation with international stakeholders to ensure this physical link requirement aligns with the processes and expectations of export markets to reduce the risk of creating barriers to market access.
Separately, KHI is broadly supportive of the suggested approach to the trade of
REGOs. KHI is committed to the use of renewable energy at its facilities and welcomes the recognition of that renewable energy use at downstream facilities within GO system boundaries. It also supports the ability for REGOs to be independently traded and voluntarily surrendered to support additional generation of electricity from renewable energy sources.
Scheme Participation
8. Policy position proposal 8: An upfront data reporting model will
be implemented to provide a practical reporting process. This
proposal relates to pages 19-20 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Page 6 of 13
For large scale hydrogen producers an upfront data reporting model will support efficiency of GO creation and surrender. However, as noted previously, further information about role profiles is needed.
It is not clear within this policy position proposal if or how an international ‘GO
Consumer’ will participate in the scheme to report on how the hydrogen is used.
Within Attachment A (page 49) the Consumer profile overview notes that the profile includes “Consumption purpose (including export)” but it is not clear if this intends for export to be a ‘consumption purpose’ or if international consumers of hydrogen will be required to report their final use after export.
As noted in response to Question 2, KHI is supportive of the inclusion of downstream activities within the GO system boundaries. However, it is not clear if downstream activities conducted internationally, (i.e. where the hydrogen is exported) will be covered by the scheme.
In either scenario, limited information should have to be provided by exporting
GO Consumers on the end use of the product following export, as this is likely to change and be difficult to track during transit to the final end user.
9. Policy position proposal 9: There will be four scheme participant
roles with differing responsibilities and permissions. This
proposal relates to pages 20-21 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Based on the outline provided of the four GO scheme participant roles, it is likely that KHI would register as a GO intermediatory given it intends to liquefy gaseous hydrogen in Australia, store liquefied hydrogen portside and then export liquefied hydrogen from Australia via specialised marine carriers.
However, depending on the contractual arrangements that KHI ultimately establishes for the export of hydrogen, it is possible that it may also take on the role of an exporting GO consumer (see response to Question 2).
The final policy should be clear on the roles and responsibilities of each of the four parties and there should be further consultation and testing to verify that the proposed arrangements are workable in practice, having regard to the potentially complex supply chains between production, use and export.
The final policy proposal should clarify how exporters of hydrogen and international consumers will be treated, particularly with regard to whether the
Page 7 of 13
‘exporter’ or the final international consumer will be considered the ‘GO
Consumer’. If the latter, KHI would seek clarification on how a GO Intermediary could surrender the Product GO if an international consumer of a Product GO did not want to accept the role of a GO Consumer and did not make their consumer profile data available.
10.Policy position proposal 10: The creation process will be
implemented which combines batch data with the upfront
profiles to create certificates. The creation period for GOs can
range from a single hour to a year. This proposal relates to page
21 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
11.Policy position proposal 11: Product GOs are proposed to require
creation and transport and storage information to be complete.
Product GOs can then be surrendered and report consumption
information. This proposal relates to page 22 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
12.Policy position proposal 12: REGOs are proposed to be available
to be traded or surrendered after being validly created. This
proposal relates to page 22 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Page 8 of 13
Please provide any additional feedback on the proposed approach
Integrity controls
13.Policy position proposal 13: The CER will undertake compliance
monitoring and will have regulatory powers to address non-
compliance. This proposal relates to page 22 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
14.Policy position proposal 14: LSTRs will provide third-party
assurance of the information reported under the GO scheme.
The need for LSTRs will be front-loaded requiring less as time
goes on and participants demonstrate compliance with the
requirements of the scheme. This proposal relates to pages 23-
24 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
15.Policy position proposal 15: Where Product GOs have incorrect
information, they will be updated to reflect the most up to date
information. After the ARC process, Product GOs will be finalised
and not subject to further amendments. This proposal relates to
page 25 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Page 9 of 13
Please provide any additional feedback on the proposed approach
KHI is supportive of scheme participants being able to amend Product GO information. The accuracy of emissions intensity data is vital to the credibility of the scheme and aligned with the expectations of hydrogen consumers. Clarity is needed on the intended threshold for errors requiring correction. KHI supports regular consultation on the GO scheme as it is developed so that industry can contribute its practical insights at key points in the development process.
16.Policy position proposal 16: Where REGOs have incorrect
information, they will not be updated and instead will follow an
‘unders’ and ‘overs’ reconciliation process to minimise impacts
on the renewable electricity certificate market. This proposal
relates to page 26 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Interactions with Other Schemes
17.Policy position proposal 17: The Department proposes the GO
scheme methodologies will align where possible with the NGER
and the Safeguard mechanism. This proposal relates to page 28
of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
18.Policy position proposal 18: The CER will be able to establish
formal data sharing arrangements with the administrators of
Page 10 of 13
these schemes to streamline the creation process. This proposal
relates to page 28 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Emissions Accounting
19.Policy position proposal 19: Material emissions sources that
must be measured for each product and production pathway will
be specified in the methodologies. The sources will be selected
based on materiality threshold of 2.5% of total emissions per
source. This proposal relates to page 33 of the GO paper.
Do you agree with this proposed position?
☐ Broadly Agree
☐ Broadly Disagree
☒ No Response
Please provide any additional feedback on the proposed approach
Defined limits placed on the materiality of various emissions sources should reflect a reasonable balance between the need to ensure emissions reporting accuracy and the practical burden of measurement and reporting.
KHI notes that the inclusion of downstream supply chain elements within the system boundaries for Product GOs and future development and definition of these emissions sources may impact the reasonableness of a 2.5% materiality.
To provide further feedback on this limit, it would be valuable for industry to understand if there will there be a cap imposed on the total emissions from all non-material sources (that do not exceed 2.5% of total emissions) which can be excluded from the calculation of emissions intensity. It is possible that more complex production methods will include a greater volume of emissions sources.
Further opportunities for industry consultation following the development of downstream supply chain methodologies will be needed to align with hydrogen customer expectations.
Page 11 of 13
20.Policy position proposal 20: ACCUs issued from within the
system boundary will need to be surrendered for the emissions
reductions to be recognised under the GO scheme. ACCUs or
other carbon offsets cannot be used to reduce the emissions
intensity of products listed on GO certificates. This proposal
relates to pages 34-35 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
KHI strongly supports the recognition of CCS as occurring within system boundaries for the purpose of calculating emissions intensity. While preferences for the use of various types of offsets may vary amongst international customers, the scheme should not support hydrogen production pathways that use fossil fuel without a process to capture associated carbon emissions.
KHI submits that technology for sequestration of carbon is rapidly developing.
For that reason, the scheme should remain open to the recognition of abatement achieved through other methods in addition to CCS, where that technology and methodology is consistent with international practice and customer expectations.
21.Policy position proposal 21: LGCs and REGOs will be used to
demonstrate renewable electricity use. Behind the meter or
directly supplied renewable electricity will not require certificate
surrender if none were created. This proposal relates to pages
35-36 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
22.Policy position proposal 22: A new RMF will be calculated for use
within the GO scheme that is updated frequently and can be
accessed by other market-based frameworks. This proposal
relates to pages 36-37 of the GO paper.
Page 12 of 13
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
23.Policy position proposal 23: RECs used to demonstrate
renewable electricity usage in production of a GO product must
have been issued within the previous 12 months. Additional
information will be captured on REGOs to allow for voluntary
time matching at a more granular level. This proposal relates to
pages 37-38 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
24.Policy position proposal 24: The GO scheme will expand over
time by incorporating new product-specific methodologies. A
prioritisation, development and review process with industry
input and international engagement will be established to
ensure domestic applicability, international alignment, and
continued suitability of legislation. This proposal relates to pages
38-39 of the GO paper.
Do you agree with this proposed position?
☒ Broadly Agree
☐ Broadly Disagree
☐ No Response
Please provide any additional feedback on the proposed approach
Page 13 of 13
