Hydrogen in Australia – The States of the Game | Insights and Events

Introduction

In May, we published a legal update on the recent Australian federal election (here) and what a new Labor government could mean for the renewable energy industry in Australia. The note pointed out that no specific legislation was planned for hydrogen.

Australian states have been more active in trying to jump on the hydrogen bandwagon. This legal update provides a brief overview of existing and planned hydrogen legislation in Australia’s six states and two territories.

Federal

Australia does not have federal laws in place that directly address hydrogen. There are funding mechanisms in place, as well as new announcements from the Labor government to encourage the development of renewable energy. The federal government has also taken the initiative to try to harmonize hydrogen regulations between states. For example, Australia’s energy ministers (federal and state) recently agreed to amend the national gas regulatory framework to address biomethane and hydrogen and to reconsider the definition of “natural gas” in the frame of the National Gas Law.

The federal government has also begun testing a guarantee of origin system that could eventually allow hydrogen exports to be certified as “green hydrogen”. This will be of particular importance to importers in Japan and Korea, where hydrogen is seen as part of their carbon neutral plans by 2030 and 2050, respectively.

New South Wales

The government published the NSW Hydrogen Strategy in October 2021. The government has pledged up to A$3 billion to support green hydrogen. The government aims to create hydrogen hubs where there are geographic requirements for green hydrogen and, importantly, in coal producing areas (such as the Hunter Valley and Illawarra) where ‘going green’ is often considered as an attack on jobs and the local economy. .

The government has also introduced the Energy Law Amendment Bill 2021, with a plan to allow the blending of up to 10% hydrogen and biomethane in gas pipelines by 2030. The law amends also the Electricity Supply Act 1995 and the Energy and Utilities Administration Act 1987 grant specific exemptions for electricity used in the production of green hydrogen. Electricity used for the production of green hydrogen will also be exempt from the Climate Change Fund.

Western Australia

Western Australia’s economy is strongly tied to the energy and resource industry. It has a highly skilled workforce and a strong export infrastructure, offering significant potential for the development of a green hydrogen market.

In 2019, the government published its Renewable Hydrogen Strategy. As with other states, the document was more ambitious than detailed. Key areas to consider were replacing diesel with hydrogen in remote communities and industries, integrating hydrogen into existing natural gas networks, mobility and leveraging existing infrastructure and skills to promote the export of hydrogen. The strategy was recently updated (Japanese translations (here) and Korean (here).

Western Australia is one of the few states to implement laws to encourage hydrogen development. The government recently announced the Land and Public Works Amendment Bill 2022which will change the Land Administration Act 1997. This will allow the introduction of “diversification leases”. Although not as exciting as the announcement of a multi-million dollar fund, the actual impact of this bill could be significant. The introduction of a diversified lease could allow the development of renewable energy and hydrogen projects on Crown land or pastoral leases. Currently, pastoral leases only allow land to be used for pastoral purposes. The changes could free up significant areas of land for hydrogen and renewable energy development.

The government has also announced plans to introduce up to 10% renewable hydrogen into the gas grid by 2030. The government had previously set a 2040 timeline to achieve this.

southern australia

South Australia is a leading state in terms of spending and measures to facilitate hydrogen development. In February 2021, the government amended the Petroleum and Geothermal Regulations 2013 to make hydrogen, and its compounds and by-products, “controlled substances” under the Petroleum and Geothermal Act 2000. geothermal energy. This amendment permitted the exploration and development of natural hydrogen under state petroleum licensing.

The government has also announced its intention to introduce legislation that will accelerate the development of hydrogen. The legislation will cover the licensing of green and blue hydrogen, with the intention that the law can be the focal point for hydrogen reduction. No details of the law were provided. It is not known when an Exposure Draft will be released for public comment.

Like other states, South Australia promotes a number of active projects. Notably, the government has committed A$593 million over four years to create a hydrogen hub in Whyalla (an industrial port city, about 400km from South Australia’s capital, Adelaide).

Tasmania

Tasmania already generates around 90% of its electricity from hydropower. Tasmania exports electricity to the mainland during peak demand through the Basslink electricity interconnector. Tasmania has established the Tasmanian Renewable Hydrogen Industry Development Fund which will promote the testing of hydrogen fuel cell vehicles and provide loans to support hydrogen projects. There are no specific hydrogen laws in place.

Victoria

The government has published the Victorian Renewable Hydrogen Industry Development Plan. Like other state governments, the Government of Victoria emphasizes the importance of hydrogen and renewable energy development. No specific legislation has been announced.

queensland

Queensland has received particular attention in the area of ​​renewable energy and hydrogen. Queensland’s existing gas and LNG infrastructure, strong resource industry, favorable solar climate and proximity to Asian markets have made it a popular development location, particularly with Korean and Japanese investors.

The government has not introduced any specific hydrogen legislation. The Hydrogen and Renewable Energy Jobs Fund was established to promote job creation in the renewable energy and hydrogen industries. Emphasis is also placed on the creation of “hydrogen hubs”. The mining industry is a big employer in Queensland, so government policy may need to be more nuanced than in other states.

North territory

The Northern Territory released its Renewable Hydrogen Master Plan in October 2021. While the document talks about ‘extraction value’, ‘downstream value-added opportunities’ and plans to ‘drive economic growth’ and to “leverage the unique value propositions of the Territory”, no relevant legislation has been tabled for consideration. However, the Northern Territory’s proximity to export markets, as well as its renewable energy potential, make it a jurisdiction to watch.

Australian Capital Territory (ACT)

Given its small geographical area, it is not surprising that there is no legislation in place for the large-scale development of hydrogen in the ACT. While most of the energy produced in the ACT comes from renewable sources (mainly solar), the ACT imports most of its electricity through the national electricity grid, via New South Wales. The ACT has introduced incentives for renewable energy, including subsidies for electric vehicles.

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