**Published name**
Would you like to subscribe to our mailing list to receive correspondence and updates on the Guarantee of Origin scheme?
How do you intend to participate with the GO scheme?
How do you plan to use GO certificates?
Do you consider the proposed enrolment process appropriate?
Please provide additional information if you don’t think the enrolment process is well balanced.
NOTE THE QUESTIONS AND ISSUES RAISED IN THE DESIGN PAPER DO NOT LEND THEMSELVES TO A SIMPLE SURVEY RESPONSE. A MORE COMPLETE SUBMISSION HAS BEEN EMAILED TO GuaranteeofOrigin@dcceew.gov.au.
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The Design Paper on page 12 asks:
- Does the proposed approach to enrolment and profile registration sufficiently cover how [you] expect to participate within the scheme?
- Is there any data proposed within the reporting profiles that is not suitable for reporting upfront?
The proposed enrolment and registration, summarised on page 12 of the Design Paper, appears to be appropriate. It will be important to ensure that scheme enrolment and registration processes are as streamlined as possible to minimise compliance burdens for scheme participants and barriers to entry for those wishing to participate in the voluntary scheme.
The Clean Energy Regulator (the Regulator) has significant experience with the IT systems and management processes associated with schemes of this nature and can draw on that experience in designing processes that are suitable for GO scheme participants.
While the development of the proposed three differing profiles to reflect the various stages of the ‘well to delivery gate’ approach will involve some complications, LETA agrees this approach is important to give effect to the proposed mass balance chain of custody approach. As noted on page 13, it will be important that this approach provide flexibility to allow for, as is the case with other commodity/energy production processes, the different hydrogen production business models that are likely develop over time.
Do you consider the proposed profile registration process appropriate?
Please provide additional information if you don’t think the assessment process is well balanced.
NOTE THE QUESTIONS AND ISSUES RAISED IN THE DESIGN PAPER DO NOT LEND THEMSELVES TO A SIMPLE SURVEY RESPONSE. A MORE COMPLETE SUBMISSION HAS BEEN EMAILED TO GuaranteeofOrigin@dcceew.gov.au.
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Production profiles
LETA welcomes the Design Paper’s recognition of multiple production pathways for hydrogen production (electrolysis, steam methane reforming (SMR) and coal gasification). As noted above, and consistent with LETA’s previous submissions on GO scheme development, taking a broad and flexible approach that allows market participants to make decisions on how they will engage with the market, and the level of emissions intensity, price and other characteristics that may be of value to them will be important to allow a deeper and more liquid market to develop over time.
With that in mind, the production profile data requirements outlined in Table 1 on pages 14 15 appear appropriate. In particular, the inclusion of data on carbon capture and storage (CCS) will supply information, amongst other things, on the emissions intensity of production pathways.
LETA’s more detailed comments on the Guarantee of Origin Emissions Accounting Approach, including in relation to CCS, will be provided in the LETA submission, which is due by 14 November 2023.
Post-production profiles
Similarly, the post-production profile data requirements outlined in Table 2 on pages 16 17 also appear appropriate. In particular, the inclusion of data on carbon capture and storage (CCS) will supply information, amongst other things, on the emissions intensity of post-production pathways, including the role of geological storage.
LETA’s more detailed comments on the Guarantee of Origin Emissions Accounting Approach, including in relation to geological storage, will be provided in the LETA submission, which is due by 14 November 2023.
Consumption profiles
LETA notes the proposed extension of the ‘reasonable physical link’ approach to the production boundary for exports of hydrogen to the location of the last port the hydrogen was in before it was exported is appropriate and consistent with the ‘well to delivery gate’ system boundary for Product GO approach outlined on page 10 of the Design Paper.
Do you consider the proposed assessment process appropriate?
Please provide additional information if you don’t think the assessment process is well balanced. i.e. the minimum scope of LSTRs, the discretionary powers of the CER, etc
NOTE THE QUESTIONS AND ISSUES RAISED IN THE DESIGN PAPER DO NOT LEND THEMSELVES TO A SIMPLE SURVEY RESPONSE. A MORE COMPLETE SUBMISSION HAS BEEN EMAILED TO GuaranteeofOrigin@dcceew.gov.au.
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Assessment process
LETA notes that while the outline of the assessment process outlined on pages 17-18 of the Design Paper is brief, it will be important that the process that may be required, particularly the use of limited scope technical reviews (LSTRs), is implemented in a manner that minimise compliance costs and other administrative costs for scheme participants.
While the transparency and veracity of data is a key underpinning of an effective GO scheme, the assessment process should not serve as cost-based barrier to scheme participation. Such an outcome would inappropriately compromise scheme participation and overall market depth and scheme liquidity.
LETA encourages the Department the Regulator to work closely with scheme participants to ensure LSTR costs are minimised and that other data sources and integrity process (such as those already required under the National Greenhouse and Energy Reporting Scheme (NGERs), the Renewable Energy Target or the Safeguard Mechanism) are utilised to the maximal extent, to keep costs for scheme participants as low as possible, while ensuring data integrity is maintained.
Are the ongoing obligations proposed under the scheme appropriate?
Please provide additional information if you don’t think the ongoing obligations are well balanced. i.e. the proposed powers of the CER to maintain ongoing compliance
NOTE THE QUESTIONS AND ISSUES RAISED IN THE DESIGN PAPER DO NOT LEND THEMSELVES TO A SIMPLE SURVEY RESPONSE. A MORE COMPLETE SUBMISSION HAS BEEN EMAILED TO GuaranteeofOrigin@dcceew.gov.au.
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Compliance
LETA notes the Regulator has a well-established compliance model in place across each of the schemes it administers and so is well placed to incorporate GO scheme compliance arrangements (as noted on page 18 of the Design Paper) into its existing approach.
Do you consider the proposed certificate creation process appropriate?
Please provide additional information if you don’t think the certificate creation process is well balanced.
At a high level, the processes outlined for GO certificate creation and consumption appear appropriate and consistent with feedback provided by stakeholders, including LETA, during the 2022 consultation process. With that in mind, LETA offers the following comments on aspects of this section of the Design Paper.
Product GO certificate creations (and ACCUs and SMCs)
LETA notes the proposal on page 19 of the Design Paper (and outlined in more detail on page 22) that voluntary cancellations of Australian Carbon Credit Units (ACCUs) and Safeguard Mechanism Credits (SMCs) will not be recognised in the GO scheme.
While this approach appears appropriate, LETA would welcome conformation that any GO scheme requirements around CCS are not compromised (or do not compromise) the recognition of CCS through the ACCU Scheme (the CCS Method) and/or the Safeguard Mechanism (and the SMCs aspect of the Mechanism).
Do you consider the proposed certificate completion process appropriate?
Please provide additional information if you don’t think the certificate completion process is well balanced. i.e. are there any types of data that are likely to cause errors in reporting
At a high level, the processes outlined for GO certificate creation and consumption appear appropriate and consistent with feedback provided by stakeholders, including LETA, during the 2022 consultation process. With that in mind, LETA offers the following comments on aspects of this section of the Design Paper.
Do you consider the proposed certificate retirement process appropriate?
Please provide additional information if you don’t think the certificate retirement process is well balanced.
At a high level, the processes outlined for GO certificate creation and consumption appear appropriate and consistent with feedback provided by stakeholders, including LETA, during the 2022 consultation process. With that in mind, LETA offers the following comments on aspects of this section of the Design Paper
Do you consider the proposed ARC process appropriate?
Please provide additional information if you don’t think the ARC process is well balanced.
As noted above, it will be important that the processes that may be required for ongoing compliance monitoring, including ARCs and particularly the use of LSTRs, is implemented in a manner that minimise compliance costs and other administrative costs for scheme participants.
While the transparency and veracity of data is a key underpinning of an effective GO scheme, the assessment process should not serve as cost-based barrier to scheme participation. Such an outcome will inappropriately compromise scheme participation and overall market depth and scheme liquidity.
LETA encourages the Department the Regulator to work closely with scheme participants to ensure ARC processes and associated costs (particularly LSTR costs) are minimised and that other data sources and integrity process (as noted above, such as those already required under NGERs, the Renewable Energy Target or the Safeguard Mechanism) are utilised to the maximal extent, to keep costs for scheme participants as low as possible, while ensuring data integrity is maintained.
Do you consider the proposed certificate correction process appropriate?
What information should be publicly available on the GO Registers compared to privately available information that can be shared?
GO Registry
Consistent with feedback from participants in the GO scheme trials, the proposed data holdings and information requirements for the GO Registry appear appropriate.
It will be important however, as part of the administration of the GO scheme and to maximise potential participation, for the Regulator to establish procedures to ensure requests that information be held as commercial in confidence form part of the scheme.
The Regulator has familiarity with such processes through, for example, its administration of NGERs and the data protection/confidentiality provisions contained in Section 25 of the National Greenhouse and Energy Reporting Act 2007 (that provide for information to not be published if the publication would be capable of revealing trade secrets or any other matter having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed ).
Data disclosures
Subject to the comments above on commercial-in-confidence data and associated protections, the data disclosure processes set out on page 26 of the Design Paper, and consistent with processes used by the Regulator under the Clean Energy Regulator Act 2011, appear to be appropriate.
Please provide feedback on the product prioritisation and methodology development process
Product prioritisation list
While LETA does not, at this stage, propose new products for a GO scheme expansion product prioritisation list, the process for adding and prioritising new products appears appropriate. It will be important that an active process involving stakeholders is implemented to allow for the market (suppliers and consumers) to play a key role in determining which products should be prioritised.
With that in mind, the annual product prioritisation cycle outlined in Table 5 also appears appropriate. The cycle should also provide for stakeholders to come to the Department at any stage during the annual cycle (it will not always be possible for market demand to align with the proposed September November consultation timetable).
Methodology development process
The methodology development process, with a focus on a co-design process similar to that previously used by the Regulator for ACCU Method development (for example, for the CCS Method) provides an appropriate model to be used for the GO scheme. With that in mind, the process outlined in pages 28-30 appears to be appropriate.
In particular, it will be important at this early stage of scheme development (and expansion) that the burdensome “proponent-lead” development process now proposed for ACCU Method development, which risks posing significant barriers method development under the ACCU Scheme, not form the basis of GO scheme methodology development.
Cost recovery
LETA looks forward to further consultation of any proposed cost recovery methodology. It will be important, particularly for a voluntary scheme that the Government is looking to underpin the development and growth of the industry, and with a desire for scheme expansion, that the cost recovery methodology not place undue cost burdens on scheme participants. This is particularly the case when the proposed ACR and LSTR processes already has cost implications for scheme participation.
Scheme review
The proposed review of the scheme in 2027 and every three years thereafter appears to be appropriate. There may be value in a limited scope ‘post implementation’ review after twelve months of scheme operation, to ensure the scheme and associated processes are working as intended.
LETA would also recommend early thought be given to the appropriate body to conduct such a review, which could, for example, become a part of the regular review cycle conducted by the Climate Change Authority (as is the case for the legislative reviews of the National Greenhouse and Energy Reporting Act 2007 and the Carbon Credits (Carbon Farming Initiative) Act 2011).
