An effective regulatory framework for Queensland’s hydrogen industry – Queensland Government issues consultation paper

In Queensland there is increasing interest from local and global hydrogen proponents seeking to establish large scale production for export markets, with over 50 hydrogen projects currently underway across the state.

Introduction

Given there are strong opportunities for investors in export scale projects, along with hydrogen technology, green metal manufacturing and future transport solutions, it is timely for the Queensland Government to review the regulatory frameworks to investigate how to improve and support the efficient and effective regulation of the growing hydrogen industry.

As part of that review, the Queensland Government has issued a new consultation paper: An effective regulatory framework for Queensland’s hydrogen industry and is now seeking feedback from the hydrogen sector and the broader community.

This consultation follows the passing of the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Act 2023 on 10 October 2023, which established approval pathways for transporting hydrogen in pipelines.

Purpose of consultation paper

The paper sets out:

1. the current regulatory environment applicable to hydrogen industry development
2. the potential barriers, issues, and opportunities for effective regulation of hydrogen industry development
3. the potential options for reform (including maintaining the status quo) to address barriers, issues and opportunities to support effective regulation of the hydrogen industry as it evolves.

The stated intent of the paper is to seek public feedback on key areas of reform to ensure regulatory settings support the hydrogen industry to develop safely and efficiently, as well as deliver economic, environmental and community benefits for all Queenslanders.

Objectives for hydrogen industry regulatory reform

The stated key objectives proposed to guide regulatory reform are to:

1. provide a clear regulatory pathway for the safe and effective development of the hydrogen industry in an ecologically sustainable and safe way
2. support the actions in the Queensland Energy and Jobs Plan to ensure reliability of the electricity system with low to no emissions
3. support domestic decarbonisation, including encouraging domestic production and use of hydrogen to reduce emissions in hard to abate sectors
4. support the industry in its efforts to show accountability and responsibility in its business practices, particularly in environmental, social, and corporate governance
5. ensure net environmental and economic benefits for Queensland, such as emissions reduction, meaningful employment opportunities and broader economic growth outcomes
6. facilitate the industry’s social licence to operate, greater coexistence between present and future land uses, and new economic opportunities and ensure benefits for host communities
7. ensure participation of, and early engagement with, First Nations people in relation to industry development, which includes preserving cultural heritage
8. align, where possible, with national reforms and international best practice.

The paper goes on to detail the key elements of the current hydrogen regulatory framework and discusses issues and potential opportunities with the existing regulatory environment. Based on these issues and opportunities, a range of options for reform are then presented, including:

1. introducing a threshold into the planning framework for hydrogen projects to be assessed by the State
2. requiring a hydrogen generation licence for renewable hydrogen production
3. leveraging the proposed Renewable Energy Zone framework to provide for hydrogen projects
4. considering community benefits in assessment for a hydrogen generation licence
5. extending existing assessment pathways to ensure stakeholders benefit from largescale hydrogen projects
6. accommodating underground storage of hydrogen in resources legislation
7. creating a new hydrogen storage framework in a standalone Hydrogen Act.

The paper invites feedback on the proposed reforms and questions highlighted in various sections of the document and on other regulatory issues that are not included in the paper.

Written submissions can be uploaded at qld.gov.au/hydrogenreform. Consultation closes at 5.00 pm on Friday 1 March 2024.

We will provide further updates on legislative developments in this area and, if you would like to discuss the paper in the meantime, we invite you to contact partner Leanne O’Neill.