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PO Box 7182
Cloisters Square WA 6850
Tel: +61 8 6163 5400
atco.com.au
3 February 2023
Department of Climate Change, Energy, the Environment and Water
GPO Box 3090
CANBERRA ACT 2601
GuaranteeofOrigin@industry.gov.au via Consultation Hub
Dear Sir/Madam
Re: Australia Guarantee of Origin scheme – Policy position paper
Thank you for the opportunity to provide feedback on the policy proposals for Australia’s Guarantee of Origin (GO) scheme in the position paper published in December 2022.
The work undertaken by the Department of Climate Change, Energy, the Environment and Water to lead and progress this initiative has been appreciated. ATCO recognises the importance of GO schemes to support the development of new products differentiated by their origins and carbon impact. We are focused on creating a new hydrogen industry and providing customers with accurate information to compare hydrogen production through different methods.
ATCO has been following the development of the GO scheme and actively participated in workshops and trials run by the Clean Energy Regulator to provide feedback on the availability of potential data and test the robustness of accounting methods for the scheme. ATCO is one of the few producers of clean hydrogen in Australia. We are also well advanced in the planning and development of a pumped hydro facility and large-scale hydrogen production plant. Implementation of GO schemes will provide businesses, like ours, with confidence that consumers will be able to differentiate products produced through cleaner production methods compared to traditional emission intensive approaches.
ATCO agrees with the initial coverage of the scheme to focus on hydrogen, hydrogen energy carriers and renewable electricity with flexibility for expansion in the future. Our comments are limited to proposed policy positions outlined in the paper which may impact on our ability to be a renewable hydrogen producer, renewable energy generator and transporter of gases via networks.
Overall, the timely implementation of the scheme will provide certainty for investment. ATCO supports development of the scheme that ensures:
• Consistency with other regulatory obligations to reduce administrative burden
• Provides flexibility in application to meet customer needs
• Opportunity for future products to be accommodated through expansion of the scheme.
ATCO Australia Pty Ltd | ACN 74 091 033 546 | Registered Office: Level 12, 2 Mill St Perth 6000
About ATCO
• Established in Canada in 1947 and now a $22 billion global company, ATCO has a long history
of partnering with communities and Indigenous groups, energising industries, and delivering
customer focussed infrastructure solutions.
• With over 60 years’ experience in Australia – having entered the market in 1961 – ATCO
understands the Australian environment and is a trusted, long-term partner of many large and
respected Australian companies.
• Leveraging a legacy of power generation, transmission and distribution networks operation
and maintenance in Canada, ATCO has been providing gas-fired power generation in Australia
for more than 20 years and is actively investigating investments across the entire energy value
chain, including renewable generation, transmission, distribution and storage infrastructure
for the national electricity market. ATCO is eager to apply its international expertise and
experience in electricity, natural gas, hydrogen, water, storage and structures to its continued
operations across Australia.
• Experienced in building, owning and operating pipeline infrastructure globally, ATCO has
successfully managed the Western Australian natural gas distribution network since 2011.
• ATCO has invested in alternative and renewable energy solutions for 30 years. ATCO will
continue to respond to disruption in the energy sector through investing in a range of projects
that utilise new technologies and business models to provide energy solutions for a low carbon
future. Activities in this area include renewable generation, microgrids, storage and hydrogen.
• ATCO is a global leader in providing modular solutions to the community; from regional mining
developments through to urban infrastructure development and provides a diverse range of
services and products throughout various markets in Australia.
If you have any questions or would like to discuss any of these issues, please contact Russell James,
General Manager Business Development West on 0408 341 762.
Yours sincerely
J.D. Patrick Creaghan
Country Chair, Australia
Attachment A – ATCO response to proposed policy positions
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ATTACHMENT A
ATCO response to proposed policy positions
Policy position proposal 1: The scheme will be covered under new legislation administered by the
CER.
• ATCO supports this approach, as it will provide the foundation to allow maximum flexibility to
be achieved and credibility with an Australian Government agency lead in the CER. Timely
drafting and introduction of the new legislation will need prioritisation.
Policy position proposal 2: The Product GOs will cover the well-to-user system boundary.
• ATCO supports the change in this policy proposal from well-to-gate to well-to-user boundary
to maintain consistency with international schemes.
• Greater clarity may be needed on the responsibility for information provision beyond the
production gate as other entities besides the producer may be liable for the transport and
storage of product to end customers.
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.
• ATCO supports this approach and expects that producers will be incentivised to participate
based on consumer demand for reputable certification. The adoption of no minimum emission
intensity requirement will enable transparent emission intensity reporting and allow users to
determine an acceptable level of emissions. It will provide the opportunity for greater
distinction between low carbon products.
Policy position proposal 4: The GO scheme will be cost recovered in line with Australian Government policy.
• ATCO supports cost recovery of the GO scheme when the industry has matured and is
competitive with existing energy sources. The initial implementation and set up of the scheme
should be covered by the Federal Government until that time.
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.
• ATCO supports a five yearly review.
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.
Feedback is sought on the information that should be publicly visible on REGOs (e.g. time of generation, grid location, commissioning date, end user, etc) and the information that should be publicly visible on Product GOs? (emissions intensity, volume, relevant inputs, etc).
• ATCO supports the availability of information to verify claims of renewable electricity, but this
must be balanced with the additional administrative and metering costs on producers to
collect detailed information. Information to be shared will need to be valued and utilised by
customers to assess renewable claims.
• Information that could be publicly visible on REGOs or Product GOs and without significant
cost burden include:
o Time of generation
o Grid location
o Commissioning date
ATCO Australia Pty Ltd | ACN 74 091 033 546 | Registered Office: Level 12, 2 Mill St Perth 6000
o End user – Entity that surrenders the REGO
o Energy source
o Emissions intensity
o Volume of product
o Production method
o Production location
o Production date
o Input certificate consumption (LGCs/REGOs/ACCUs)
o Water source
• Consideration will need to be given to standardise the collection of information, particularly
for the use of multiple electricity sources within the supply chain.
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.
• ATCO supports the provenance approach in principle for GOs, but would like to see a broad
definition of reasonable physical link to allow greatest flexibility for the customer.
• The provenance approach will create an artificial boundary on the exchange of gases between
producer and consumer in a developing market. It is therefore important that the criteria for
“reasonable physical link” is market based and allows for hydrogen to be traded as freely as
possible.
• The cost of product production will be impacted by the production location and transport
method utilised to the end consumer. These impacts need to be reflected in the GO certificate
to ensure customers are fully informed on the emission impacts of their chosen supply chain.
• In order to incentivise the uptake of low emission products, blended hydrogen should not be
distinguished from direct consumption of the product.
• It is agreed that the provenance approach will support the scheme’s trustworthiness and
provide simplicity while the needs of stakeholders are developing. Alternative approaches
should be explored in the future that will permit the free exchange of gases similar to
electricity, as the consumption of molecules should not be treated differently to the
consumption of electrons. A level playing field should exist and a consistent approach applied
to renewable gas and renewable electricity.
Policy position proposal 9: There will be four scheme participant roles with differing responsibilities and permissions.
• The roles of scheme participants appear sound.
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.
• ATCO supports flexibility in the creation of certificates by providing a time range for creation.
This will assist in managing administrative burden associated with creation process whilst still
enabling matching of batch data with customer offtake frequency.
• Shorter periods for creation may be better suited to the needs of some customers, for
example hydrogen used for refuelling. In practice, GO producers will need to consider the
allocation of certificates to refuelling customers when refuelling may occur at a different time
to production.
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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.
• Given that producers will largely be responsibility for the creation of GO certificates, greater
clarity will be needed on how transport and storage information will be captured if outside the
producers’ responsibility.
• It’s not clear which scheme participant would ultimately be responsible for capturing transport
and storage information, as this could be held by more than one scheme participant and
involve multiple GO intermediaries, ie. the GO producer or consumer could be responsible for
transport and storage. There may be multiple transport legs in the supply chain for hydrogen
that may cross responsibility from the producer to consumer. For example, in the sale of
hydrogen for export, a producer may be required to transport hydrogen by pipeline to port
and then the customer may take custody of the commodity at the point of loading it onto the
vessel. Greater clarity will be needed on the responsibility for transport and storage
information for the product to complete GO certificates.
Policy position proposal 17: The Department proposes the GO scheme methodologies will align where possible with the NGER and the Safeguard mechanism.
• The alignment of regulatory methodologies will help to minimise the administrative burden on
businesses and encourage the voluntary use of GOs.
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.
• ATCO supports the establishment of a materiality threshold.
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.
• ATCO agrees with the consistent surrender of LGCs and REGOs to demonstrate use of
renewable electricity and that no certificates should be surrendered if not created from the
renewable electricity source in the first place..
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.
• ATCO supports this approach and agrees that additional information for time matching should
be supplied on a voluntary basis. Additional information captured on REGOs will allow for
temporal and spatial matching of renewable energy generation to hydrogen production and
future verification.
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.
• ATCO supports the expansion of the GO scheme over time to incorporate new product-specific
methodologies for hydrogen products and its derivatives. We consider ammonia, methanol
and synthetic methane to be prioritised for future incorporation in the scheme.
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