National Hydrogen Strategy: issues papers

Assuming Australia is committed to development of a guarantee of origin, then its development and launch should occur such that:
(i) it is applicable and deployed simultaneously with initial hydrogen exports
(ii) for domestic consumption, deployed from a specified date with sufficient lead time to coincide with market uptake and consumer awareness of hydrogen origin issues. A ‘soft start’ could be achieved via voluntary participation up until the mandatory participation date. Early adopters of hydrogen fuels can be expected to want to communicate their engagement with the technology; supporting and enabling them to make credible GHG claims will be important.
In both instances, entities in the hydrogen industry will require adequate forewarning to enable development of a management system to support a guarantee of origin system in association with and/or integrated with, other business systems.

The Beyond the University of Queensland report highlights the Australian public concern for adverse impact of a large scale hydrogen industry upon (in particular) water resources in addition to the greenhouse gas impacts. Speculatively, users of exported Australian hydrogen would likely be concerned about greenhouse gas impacts, but possibly not of its impact upon Australian water resources. The same may be true of other environmental and social indicators. A guarantee of origin system can readily communicate a single variable (e.g. greenhouse gas emissions), however complexity will dramatically increase if it is to convey additional variables (e.g. greenhouse gas emission attributes plus impacts upon water resources). The same report highlighted the Australian public’s perceptions of the strength of supporting regulations and standards; it may be through these mechanisms that the non-GHG matters are defined, monitored and assurance provided. That being said, we do not see a need to develop different guarantee of origin systems to support the domestic and export markets - albeit there might be different timeframes for launch and export hydrogen will have additional activities (e.g. international shipping).
As a precursor to this work, it would be prudent to develop life cycle assessment models each type of hydrogen manufacturing plant so as to aid understanding of impacts upon a wide suite of environmental indicators. This work would assist in informing the guarantee of origin boundaries and scope, and inform management of identified impacts.

The important consideration is not whether there is an eligibility threshold for tracking hydrogen via a Guarantee of Origin system, but the nature of the certification claim arising and unambiguous communication/understanding of that claim within the market. We support the Discussion Paper’s observation that further consumer and destination market testing will be required.

At this point in time there is no domestic or internationally recognised certification scheme or standards which could be readily adopted/adapted as a hydrogen Guarantee of Origin scheme in Australia.
Australia can either develop its own scheme or seek interest from other economies towards development of common international standard(s) to underpin an international scheme or country specific schemes. The latter approach will necessitate Australia understand what is important to import economies such that its guarantee of origin verification claim is accepted. The former approach draws upon international expertise to codify (at least) the minimum core requirements upon which guarantee of origin claims can be made.
It seems that whilst Australia may be in a position to be an international leader in development of its own scheme, it will only be a matter of consumer demand, incentivisation and time for other economies to embark upon, and/or achieve the same – or better. There therefore lies a risk in proliferation of bespoke approaches, certification standards and schemes and the potential for market confusion. Competing schemes could be used as technical barriers to trade (for example, a scheme which solely guarantees the GHG attributes compared with a competing scheme reporting upon a wider set of relevant attributes). Unless Australia is of the view that it is the only economy capable of producing low carbon hydrogen with associated verifiable claims, then it is encouraged to engage with other economies on a standardised approach to a hydrogen guarantee of origin. Alternatively, it should be accepting and prepared to adjust its bespoke scheme in time as other economies, or international standards, enter that market; or establishing a framework by which equivalence is accessed and recognised.
The question concerning an appropriate body for the various roles in developing, maintaining and administering a scheme will be influenced by which of the aforementioned paths the project proceeds.
Other considerations include whether a guarantee of origin scheme is mandatory or voluntary for Australian hydrogen manufacturers, participants and consumers.
Our experience is that voluntary participation in certification schemes typically has variable uptake – and often not by those entities who might be best, or in need, to do so. Similarly, chain of custody type systems are reliant on credible transfer of information from the origin to the end user; a hydrogen guarantee of origin system would be at risk of incomplete participation should it be reliant upon voluntary participation or participation without verifier inputs.
Our view is that a Australian guarantee of origin should be a regulatory scheme, which is underpinned by an (as yet to be developed) International Standard. Administration of the scheme should be with the Government; the NGERs model could prove effective at achieving the outcomes of effective administration, validation of verifier competencies, sector education and regulatory enforcement.
Currently JAS-ANZ accredits 137 certification bodies globally, of which 63 have offices in Australia. This conformance system plays an important part in the Australian regulatory framework and the country’s economy. The system incorporates specialist certification bodies which perform audit and certification functions in technical areas across all industry sectors, and as concerned with the certification of products, goods and services to voluntary and regulatory requirements. JAS-ANZ is open to discussion with the COAG to explore whether the accreditation system could provide a framework for management of verification bodies, and verifier competencies and activities. Such engagement would facilitate international recognition of guarantee of origin claims.