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13 March 2023

Powering the future: new legislation to boost Queensland’s renewable hydrogen industry

The legislative changes proposed in the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill seek to provide a clear regulatory framework for the development, production and distribution of renewable hydrogen in Queensland. Ratification of the Bill is a crucial step in the expansion of the industry.

The legislative changes proposed in the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill seek to provide a clear regulatory framework for the development, production and distribution of renewable hydrogen in Queensland. Ratification of the Bill is a crucial step in the expansion of the industry.

Queensland’s role in renewable hydrogen

Queensland has potential to be among the world’s largest producers and exporters of renewable hydrogen. However, the growth of the renewable hydrogen industry that has been proposed in the Queensland Hydrogen Industry Strategy 2019-2024 highlights the need for greater regulatory oversight concerning the production, transport, storage and distribution of hydrogen.

Current gas production and supply legislation

Currently, gas production and supply in Queensland is governed by the Gas Supply Act 2003 (GS Act) and the Petroleum and Gas (Petroleum and Safety) Act 2004 (P&G Act). As the growth of the hydrogen industry was not contemplated at the time this legislation was enacted, the legislative frameworks fail to adequately regulate hydrogen use and development in Queensland.

Accordingly, the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023 has been developed to address these deficiencies and to mitigate the current complexity and risk involved in developing hydrogen projects. The Bill will amend the GS Act and P&G Act to provide clear approval pathways for hydrogen and liquid hydrogen carrier pipelines and will extend the National Gas Law (NGL) to hydrogen, biomethane and other renewable gases.

Changes proposed under the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023

Gas Supply Act 2003

The GS Act will be amended to include definitions for a ‘covered gas’, ‘primary gas’ and ‘gas blend’ to ensure consistency with the NGL. Hydrogen and other gases such as biomethane, synthetic methane and a blend of other gases will fall within the scope of a ‘covered gas’. The inclusion of these terms will enable distribution authority applications to be made for the transportation of a covered gas and for any relevant conditions to be imposed.

Requirements for ring fencing, connection contracts, metering and control apparatus, distribution officers, reticulated gas supply, sufficiency of supply, distribution network codes and general offences will also be introduced for covered gases in the amended GS Act.

Petroleum and Gas (Production and Safety) Act 2004

The Bill proposes to extend the existing petroleum and gas pipeline licensing pathway to transmission pipelines for hydrogen, hydrogen gas blends and other regulated substances, such as methanol and ammonia. The extension of the licensing pathway will streamline the current process in Queensland. Under the existing P&G Act, a hydrogen pipeline cannot be constructed on private land without an easement or written agreement with the relevant landholders and native title parties. Reaching a mutual agreement often requires a range of arbitration and resolution measures involving significant expenditure of time and resources for all stakeholders .

However, the P&G Act will still require developers to make an application, consider any impact upon cultural heritage in the proposed area, and provide a regional interest development approval .

Conclusion

The lack of a specific regulatory framework administering hydrogen development and use has been a hindrance to the progress of the renewable hydrogen industry in Queensland. The Bill will support the growth of the industry in Queensland and assist in achieving decarbonisation targets by widening the scope of definitions in the GS Act to match the NGL and consolidating the application process in the P&G Act to reduce the burden for proponents to build hydrogen transmission pipelines.

We will provide further updates as changes take place and, if you would like to discuss the Bill in the meantime, we invite you to contact partner Leanne O’Neill.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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