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An initial focus on hydrogen production is proposed to facilitate timely establishment of a hydrogen GO scheme. Do you agree with this as a starting point?
An initial focus on hydrogen production is proposed to facilitate timely establishment of a hydrogen GO scheme. Do you agree with this as a starting point?
Given that renewable electricity will play such an important role in hydrogen production into the future, BlueScope believes that methodologies for both hydrogen and electricity guarantee of origin schemes should be developed in parallel and as a priority over other green products.
It would also be advantageous to incorporate other renewable gases into the scheme development as there are already projects underway and a pressing need for broader renewable gas certification.
A well-to-gate boundary is proposed as the initial boundary across which the emissions are to be calculated for hydrogen GO scheme. Do you agree this is an appropriate and acceptable starting point for the boundary?
Is hydrogen production at a pressure of 3MPa and 99% purity appropriate conditions for measuring the emissions associated with hydrogen?
Is hydrogen production at a pressure of 3MPa and 99% purity appropriate conditions for measuring the emissions associated with hydrogen?
The department recognises the need to extend the coverage of the scheme over time to include hydrogen derivatives and downstream products, additional production pathways and additional steps in the value chain. - What additional components should be covered and when? (noting the commitment to include hydrogen energy carriers as an early next step).
BlueScope supports the position that the scheme should create a consistent framework to support a range of low emissions technologies. However, there will be complexities regarding emissions boundaries and carbon accounting methodologies that will require careful consideration when incorporating other low emissions products at a later stage. Each product may require a different approach to ensure that the scheme is consistent with existing international schemes and accreditation for each low emissions product.
Deep consultation with industry participants will be required prior to drafting any downstream low emissions products GO methodologies.
Do you agree that ISO standards and the GHG protocol provide the appropriate basis for the overarching framework for a hydrogen GO scheme?
Do you agree that ISO standards and the GHG protocol provide the appropriate basis for the overarching framework for a hydrogen GO scheme?
BlueScope agrees that maintaining consistency with other existing international standards as much as possible (by referencing existing international standards and protocols) is a sensible approach that will help to support a globally consistent approach and help facilitate export opportunities for an Australian hydrogen industry
Should IPCC Guidelines, the NGERS determination and the Climate Active Electricity Accounting rules be leveraged to provide guidance on the detailed emissions calculations?
Should IPCC Guidelines, the NGERS determination and the Climate Active Electricity Accounting rules be leveraged to provide guidance on the detailed emissions calculations?
Where existing guidelines offer a fit for purpose solution, they should be used as a starting point for drafting the GO legislation.
What is your preferred approach to offset inclusion within a domestic hydrogen GO scheme?
What is your preferred approach to offset inclusion within a domestic hydrogen GO scheme?
Offsets not included to maintain alignment with IPHE discussions and to minimise complexity however this position should be reviewed regularly to ensure consistency with international standards is maintained and that this position doesn’t unfairly disadvantage Australian hydrogen producers or domestic hydrogen consumers.
Do you agree that the Australian government should lead the administration of an Australian GO scheme?
Do you agree that the scheme should be administered by the Clean Energy Regulator?
What should be the role of industry in co-designing a government led scheme?
Industry will need to be actively involved in the development and trialling of the GO scheme as well as ongoing monitoring and review to ensure the scheme remains fit for purpose.
Do you support the creation of Australia’s hydrogen GO scheme as a certificate scheme?
Do you support the creation of Australia’s hydrogen GO scheme as a certificate scheme?
A certificate scheme would be simpler to administer and will likely reduce issues associated with providing commercially sensitive contractual information.
What would you consider to be the best regulatory framework to support hydrogen Guarantee of Origin scheme?
While there are elements of the NGER Act that can be used as a basis for drafting the GO regulations, for clarity of interpretation and administration, the Hydrogen GO should be drafted as new, separate legislation rather than as new regulations under both the NGER Act (for information collection) and ANREU Act (for certificate creation).
How frequently should data be reported; Is the proposed 12 month period adequate?
How frequently should data be reported; Is the proposed 12 month period adequate?
Given the overlap in information reported under NGERS and GO, it would be sensible to align reporting with NGERS financial year reporting timing. It may also be beneficial to leverage the EERS platform to collect the information.
Do you agree with the approach set out for scope 1 emissions?
Do you agree with the approach set out for upstream emissions?
Do you agree that the calculation of electricity (scope 2) emissions should be based on the market-based method?
Do you agree that the calculation of electricity (scope 2) emissions should be based on the market-based method?
BlueScope agrees that the market-based method supports transparency and alleviates issues with double counting. However, the market-based method may potentially add cost to hydrogen production in low emissions states that due to their physical location already consume a material amount of renewable energy. If their emissions are reported under the market-based methodology that utilises a national emissions factor their emissions will be much higher than under the location based method and they will need to purchase LGCs to negate this impact. Alternatively, if the location-based method is used, and LGCs are not recognised, action taken by producers to support renewable energy will not be recognised.
BlueScope believes that given the importance of improving the commercial attractiveness of hydrogen that DISER ensure that unintended commercial consequences associated with both methods should be comprehensively explored before finalising the approach.
Would you suggest any changes to the Climate Active approach (set out in detail in Attachment D) for the purposes of a hydrogen GO scheme?
While the Climate Active methodology is simple to apply, it does have a number of limitations due to this simplicity that could possibly be addressed as part of the GO development:
o The Residual Mix Factor is only available at a National Level because it utilises the RPP– this is mis-aligned with the location-based method that uses state-based factors.
o NGA Factors are a 3-year average and not the most timely reflection of the intensity of the grid
o RPP is calendar year based therefore timing issues need to be rectified by averaging two calendar years to obtain a financial year RPP.
o The RPP does not recognise below baseline renewable energy
BlueScope would recommend that DISER investigate whether it is possible to improve on the Climate Active methodology by allowing the use of more timely intensity information.
What are your views on using voluntary surrender of LGCs to verify the consumption of renewable electricity under the market based method, compared to the alternative of a location-based method?
What are your views on using voluntary surrender of LGCs to verify the consumption of renewable electricity under the market based method, compared to the alternative of a location-based method?
See comments Q17
Do you agree that a means of identifying consumption of below-LRET-baseline renewable electricity generation would be beneficial for the hydrogen certification scheme?
What are your views on establishing a new renewable guarantee-of-origin certificate for verifying below-baseline and post-2030 renewable electricity?
What are your views on establishing a new renewable guarantee-of-origin certificate for verifying below-baseline and post-2030 renewable electricity?
BlueScope supports establishing a renewable energy GO certificate for below baseline and post-2030 renewable electricity.
What would be the effect of having a general certification scheme for renewable electricity?
Provide longer term certainty over the mechanism for verification of renewable energy claims and scope 2 emissions reporting requirements.
Do you agree that certification should recognise other sources of renewable electricity, including those outlined outlined in Section 3.5.1?
Do you agree that certification should recognise other sources of renewable electricity, including those outlined outlined in Section 3.5.1?
If LGCs are chosen as the main instrument to verify a producer's percentage of renewable energy then to the extent that this is equitable and in line with GHG Protocol guidelines, these renewable energy sources should be recognised.
Do you agree that emissions should be attributed to co-products where they are on-sold?
Are the by-products identified for each pathway likely to be co-products (or are they more likely to be waste products?)
Do you think that the allocation methods suggested in each pathway are appropriate and practical?
Do you agree with an approach limiting provisions for CCS and CCUS in an initial Guarantee of Origin scheme to those included under the NGER determination, noting that these will be expanded or adjusted as new CCUS technologies and industrial processes are implemented?
Do you agree with setting a materiality threshold allowing entities to exclude a small amount (e.g. 2.5 to 5%) of total emissions from analysis?
What would you consider to be an appropriate threshold?
Threshold levels that are consistent with GHG protocol would be appropriate
Is a trial phase an appropriate next step for testing and refining the proposed methodologies?
Is a trial phase an appropriate next step for testing and refining the proposed methodologies? - Trial phase
As long as there is broad support for the proposed method.
Is the list of attributes and features to be tested correct?
Is the list of attributes and features to be tested correct?
The trial should also include ensuring that the scheme is equitable and does not introduce commercial barriers
Would you like to be involved in a trial (noting an affirmative response will not guarantee participation)?
Submission - General comment
Thank you for the opportunity to provide feedback into the development of the Hydrogen GO scheme.
If you have any questions or require clarification on any of our feedback in our submission we would be happy to discuss at the appropriate time. We would also welcome early engagement on any development in the coverage of downstream “clean/green” products.
Submission - File for publishing
Submission - File for publishing
