On 19 May 2023, Energy Ministers agreed to amendments to the national energy laws to incorporate an emissions reduction objective into the National Electricity Objective, National Gas Objective and National Energy Retail Objective (the national energy objectives) respectively.
These reforms deliver on one of the first key actions under the National Energy Transformation Partnership. It will integrate emissions reduction and energy policy in the national energy laws, and provide greater clarity to Australia’s energy market bodies — the Australian Energy Market Commission (AEMC), the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) and Western Australia’s Economic Regulation Authority (ERA) — to consider emissions reduction in how they undertake their respective powers and functions.
The amendment will also send a clear signal to wider industry, market participants, investors and the public, of the governments’ commitment to achieve a decarbonised, modern and reliable grid.
The national energy objectives are contained in the National Electricity Law, the National Energy Retail Law and the National Gas Law — the laws that govern the national electricity, gas and related retail markets. Energy Ministers agreed to the Bill giving effect to the amended objectives in May 2023.
The Bill commenced on 21 September for the AEMC and for the AER and ERA on specified revenue determinations and access arrangements. All other processes, including those led by the AER, ERA and AEMO, will incorporate the new emissions objective two months from the commencement day to ensure market participants have sufficient lead time before application.
In June 2023 Energy Ministers released an information paper (PDF 283 KB) to provide stakeholders with a high-level overview of the refinements made to the draft package that was consulted on in late 2022. This paper also has an indicative list of the consequential rule changes to be prioritised to give effect to the new emissions reduction objective.
Reform process and consultation
On 12 August 2022, Energy Ministers agreed to fast track the introduction of an emissions reduction objective into the national energy objectives.
Officials released an initial National Energy Laws Amendment (Emissions Reduction Objectives) Bill 2022 (PDF 98 KB) and consultation paper (PDF 344 KB) for a seven-week public consultation. Submissions closed on 7 February 2023.
Over 50 submissions were received, and all submissions not marked confidential are accessible below. Officials used this stakeholder feedback to inform the development of the final legislative package for these reforms.