Announcement date
12 September 2024
Link to announcement
Future Made in Australia (Guarantee of Origin) Bill 2024 – Parliament of Australia (aph.gov.au)
Problem being addressed
Within Australia there is a lack of transparent, consistent, and trusted, consistent, information on low-emission and clean Australian-made products, and no enduring mechanism to provide certification on renewable electricity.
The deficiency of product information restricts the capacity for consumers to ascertain the difference between carbon-intensive and low-emission goods that are physically identical. Without this information, buyers and sellers of these kind of products are unable to efficiently transact and co-ordinate their activities, inhibiting the development of markets for low-emission goods. Consumers may not be willing to pay a premium for a good described as ‘low emission’, ‘green’, or ‘renewable’ without robust evidence that the low emissions attributes of the product are correct. Additionally, the absence of product information could limit the ability of government incentive programs to discriminate and target support towards low emissions or renewable products.
Renewable electricity certification exists in Australia under the Renewable Energy Target (RET) scheme. However, the RET scheme, including the ability to certify renewable electricity, is legislated to end in 2030 and only applies to a subset of total renewable electricity generation in Australia.
Proposal
The Impact Analysis (IA) considers three policy options:
- Option 1: Status-quo (non-regulatory) – Australian industry would develop emissions accounting and certification frameworks as required without Australian Government involvement.
- Option 2: Publish framework with no government administration (quasi-regulatory) – The Australian Government would develop an emissions accounting framework for hydrogen that industry could voluntarily choose to adopt and apply to their certification schemes for clean products for both domestic and export. This option would not apply to renewable electricity.
- Option 3: Australian Government administered Guarantee of Origin Scheme (regulatory) – The Australian Government would implement and administer a voluntary scheme, the Guarantee of Origin or ‘GO’ scheme, to measure, track and verify emissions information related to products, and provide an enduring certification mechanism for renewable electricity.
The preferred policy option is Option 3, the Guarantee of Origin (GO) scheme, as this option would provide the necessary investment certainty, achieve greater integrity and unlock greater economic opportunities over the medium-to-long term.
Assessed Impact Analysis outcome
Adequate
Assessment comments
The IA is informed by a high quality consultation process. To be considered good practice as per the Australian Government Guide to Policy Impact Analysis, the IA would be improved by further detail on implementation and evaluation planning.
Regulatory burden
The Department of Climate Change, Energy, the Environment and Water estimates the Guarantee of Origin (GO) scheme option would increase annual regulatory costs by approximately $20.2 million, on average over 10 years. This represents an average annual cost of $16.9 million to the renewable electricity sector (including participants transitioning from the Renewable Energy Target Scheme from 2030) and $3.3 million to the hydrogen and other sectors.