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25 March 2025
Director, Guarantee of Origin and Trade
Department of Climate Change, Energy, the Environment and Water
Via email to: GuaranteeOfOrigin@dcceew.gov.au
Dear
Public Consultation on Tranche 1 of the Exposure Draft of the Guarantee of Origin Rules – AGIG
Response
Thank you for the opportunity to provide comment on Tranche 1 of the Guarantee of Origin Rules.
AGIG is one of Australia’s largest energy infrastructure groups with distribution, transmission and storage assets worth over $9 billion. We deliver natural gas reliably, safely and efficiently to over 2 million residential, commercial and industrial customers across Australia.
We are committed to net zero and are supportive of government goals to reach net zero emissions. We are leading the transition from natural gas to renewable and carbon-neutral gases such as renewable hydrogen and biomethane including through our investments in renewable gas projects. Today we have two small-scale demonstration projects operating and a larger 10 megawatt commercial project under construction, along with a pipeline of additional projects which is evidence of our confidence in the deliverability of renewable gas to customers 1.
We are generally supportive of the exposure draft and the Guarantee of Origin scheme
The Guarantee of Origin (GO) scheme is important to AGIG because of its critical role in enabling/facilitating support for the nascent renewable gas industry, and because it enables our customers to decarbonise. Certification of renewable gases such as hydrogen and biomethane through the GO scheme is an essential pre-requisite to accessing support for our hydrogen projects through the recently announced hydrogen production tax incentive (HPTI). We have welcomed the opportunity to engage regularly with DCCEEW over the course of the development of the scheme.
We have reviewed the exposure draft on the GO scheme and are supportive of its provisions, as well as the
Department’s continued work to enable the scheme’s operation. Overall, the GO scheme will allow the financial value of the production of renewable gases to be recognised, while striking a balance between the ability to measure a product’s lifecycle emissions, and allowing the tradeability of the renewable characteristics of the product where appropriate. The exposure draft creates appropriate provisions for creation and registration of Product GO certificates.
Timing risks to the development of methodologies creates uncertainty for projects
Notwithstanding the progress on the exposure draft, we note that a significant body of work must still be undertaken by the Department to develop further regulations and methodologies for the detailed operation of the GO scheme.
Certainty around access and eligibility for projects to register for a GO certificate, and subsequently the HPTI, is a critical consideration in achieving financial close for projects.
For new projects to come to market by mid-2027, the date when hydrogen production becomes eligible for the HPTI, providing certainty to projects by mid-2025 is critical to mitigating investment risks so that investment decisions can be made.
As outlined above, providing early certainty to hydrogen projects banking on their eligibility to register for the HPTI is crucial for the project to progress to financial close. This is particularly significant for the HPTI, with projects only being able to claim credits for hydrogen production for a period of 10 years but no later than 30 June 2040. Further delays to the development of regulations and methodologies for the GO scheme may hinder the progress of new projects
1
A list of our advanced renewable gas projects is available on AGIG | Australian Gas Infrastructure Group | AGIG under “Future of Gas”.
+61 8 8227 1500
info@agig.com.au agig.com.au
coming to market, while a rushed implementation of the same regulations and methodologies may result in practical and implementation issues down the track.
We recommend utilising GreenPower as an interim solution while further regulations and methodologies are developed
Our recommendation is that the Department consider an interim solution using the existing GreenPower scheme, while further regulations and methodologies are developed. By doing so, project proponents can reduce risk around eligibility for the HPTI, and also allow customers an option to decarbonise sooner.
Existing trusted certification schemes such as the GreenPower Renewable Gas Guarantee of Origin (RGGO) 2 scheme administered by the NSW Government already exist, and can be easily implemented quickly while the federal
Guarantee of Origin scheme is developed fully. A transition period can apply for projects to transition to the Product
GO Scheme when it is fully developed.
We commend the Department’s collaboration so far on the development of the Guarantee of Origin scheme and look forward to continuing to engage with the Department on further development of the scheme. Should you require any further detailed information, please contact
Yours sincerely,
Executive General Manager Customer & Strategy
2
https://www.greenpower.gov.au/
+61 8 8227 1500
info@agig.com.au agig.com.au
