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Extending the national gas regulatory framework to hydrogen blends and renewable gases

Publication date

On 20 August 2021, Energy Ministers agreed to reform the national gas regulatory framework.

These reforms will bring hydrogen blends, biomethane and other renewable gases within the scope of the national gas regulatory framework. The reforms will focus on gases and blends that can be used in existing natural gas appliances and consider any required changes to the National Gas Law, National Energy Retail Law and subordinate instruments.

The reforms aim to provide regulatory certainty to support investment in innovative projects that will reduce emissions in our gas networks. The reforms will also ensure existing regulatory provisions and consumer protections will remain in place when hydrogen blends and renewable gases are supplied in the gas network.

Energy Ministers agreed to accelerate this reform process to meet the needs of a transitioning energy market. A draft legislative package is to be presented to Ministers for approval by mid-2022, and draft rules in the second half of 2022.

What are hydrogen blends and renewable gases?

Biomethane and other synthetic methane products can be processed to have the same specifications as natural gas, with net zero emissions. After this processing, they can be used safely in existing gas infrastructure and current appliances.

Hydrogen has different properties to natural gas. It can be made suitable for injection into the gas network by blending it with other suitable gases. Work completed under the National Hydrogen Strategy found that blends of around 10% hydrogen could be used in most existing appliances.

It will take time before existing infrastructure and appliances can safely handle 100% hydrogen gas supply. Where possible, the reforms will be ‘future proofed’ so when other gases such as higher percentage blends of hydrogen can be safely injected into the network, the regulatory framework will allow for these to be supplied.

Work streams

Under the accelerated approach, Ministers have agreed to task:

  1. Jurisdictional officials to lead work to identify and develop amendments to the National Gas Law (NGL), the National Energy Retail Law (NERL) and Regulations
  2. The Australian Energy Market Commission (AEMC) to lead work to identify and develop amendments to the National Gas Rules (NGR) and the National Energy Retail Rules (NERR). Further details on the AEMC’s process can be found on their website.
  3. The Australian Energy Market Operator (AEMO) to lead work to amend the Procedures and other AEMO-made instruments required for settlement and metering in the facilitated and regulated retail gas markets. Further details on the AEMO’s process can be found on their website.

Further details on the reform process can be found in this information sheet and infographic.

Consultation

Initial consultation papers

Consultation papers on all three work streams are now available for review and comment:

Officials’ paper 

Officials' paper on amendments to the National Gas Law (NGL), the National Energy Retail Law (NERL) and Regulations. (accessible version)

Responses to this paper were accepted until 26 November 2021. Submissions will be published on this page shortly.

AEMC paper

AEMC paper on amendments to the National Gas Rules (NGR) and the National Energy Retail Rules (NERR)

Responses to this consultation paper can be made via the AEMC’s website and are due by 2 December 2021.

The AEMC will be hosting workshops on specific topics related to their work on these reforms in December. Further details can be found on the AEMC website.

AEMO paper

AEMO paper on amendments to the Procedures and other AEMO-made instruments required for settlement and metering in the facilitated and regulated retail gas markets

Responses to this consultation paper can be made via the AEMC’s website and are due by 2 December 2021.

Stakeholder forum

A forum was held on 22 October 2021 to provide stakeholders with an opportunity to hear from each of the three work streams and participate in a Q&A session.

To discuss further, you can contact renewablegas@industry.gov.au.

Timeframes

21 October 2021: Initial consultation papers published

22 October 2021: Stakeholder forum

26 November 2021: Responses to the Officials’ consultation paper are due

2 December 2021: Responses to the AEMC’s and the AEMO’s consultation papers are due

13 December 2021: AEMC stakeholder workshop on consumer protections and regulated retail markets

14 December 2021: AEMC stakeholder workshop on facilitated markets (DWGM and STTM)

15 December 2021: AEMC stakeholder workshop on economic regulation, transparency mechanisms, regulatory sandbox

Late March – May 2022: Consultation on draft reports and draft legislative amendments

Mid 2022: Draft legislative amendments presented to Energy Ministers for agreement

Late 2022: Consultation on proposed initial Rules, Procedures and other subordinate instruments

Read more

Information sheet: Extending the national gas regulatory framework to hydrogen blends and renewable gases

Infographic: NG equivalents in the natural gas supply chain

Australia's National Hydrogen Strategy

Australian Energy Market Commission (AEMC) 

Australian Energy Market Operator (AEMO)

Australian Energy Regulator (AER)

Energy Consumers Australia

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