Mandatory Gas Code of Conduct
The Australian Government is designing a mandatory Gas Code of Conduct, as part of the Energy Price Relief Plan announced in December 2022, to ensure that east coast gas users can contract for gas at reasonable prices and on reasonable terms.
The mandatory code will be an important addition to Australia’s east coast gas market, with key elements subject to review on the basis of changes to the market’s structure and conduct.
The government consulted on questions relating to the design of the Code between 9 December 2022 and 7 February 2023. Over 60 submissions were received.
A second round of consultation was undertaken between 26 April 2023 and 12 May 2023 to allow stakeholders to consider an exposure draft of the Code. Over 40 submissions were received.
Stakeholder submissions are currently being considered.
The government sought stakeholder feedback on the design of the Code which includes:
- a reasonable pricing framework that sets a price anchor of $12/GJ for commercial negotiations of wholesale gas contracts
- incentives for domestic supply commitments through conditional exemptions from the price cap - if producers make enforceable commitments that support domestic gas supply at reasonable prices - and automatic exemptions for small producers who exclusively supply the domestic market
- conduct provisions that will establish conduct and process standards for commercial negotiations between gas producers and their customers
- reporting requirements that provide greater transparency on uncontracted gas that producers have available and when this would be brought to market over the next 12 months.
Final approval and commencement of the Code is a decision for government but it is expected it will be implemented in June 2023 following consideration of submissions from this consultation round.
Measures to mitigate global energy price rise crisis 14 December 2022