Hydrogen to be included in Australia’s energy laws

The Australian Energy Market Commission (AEMC) has recently recommended changes to the national gas and energy retail rules in order to facilitate the incorporation of hydrogen and renewable gases into the Australian market.

These recommendations, of which there are 25 in total, will be a priority under the Australian Government’s National Hydrogen Strategy and energy sector participants should turn their minds to the opportunities presented by the accelerated development of Australia’s hydrogen industry.

Electricity and gas supply and delivery is variously regulated at a State and market level, both at a safety and technical level to enable a functioning market, and given their essential service characteristics.

The AEMC is recommending that: (i) the existing economic regulatory framework and market transparency mechanisms be extended to hydrogen and renewable gases; (ii) new services and commodities be allowed to be priced or traded within retail gas markets; and (iii) consumers be informed about the transition to natural gas equivalents. For further details, see the full suite of the AEMC’s draft recommendations.

These recommendations are an important next step toward the decarbonisation of Australia’s energy sector. They are critical to laying the regulatory framework to allow for hydrogen and renewable gases to be supplied through current distribution infrastructure and into Australian homes and businesses. The recommendations will also unlock growth and investment by offering certainty around Australia’s commitment to moving toward low-carbon fuel sources.

Norton Rose Fulbright supports the draft recommendations of the AEMC and continues to advise a range of private and public clients on the energy transition and move to a decarbonised energy sector. We can also assist any clients looking to provide a written submission to the AEMC on its draft recommendations, which is due by 19 May 2022.