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Queensland hydrogen regulation: have your say

James Plumb, Elizabeth Harvey, and Gemma Sweeney / 02 February 2024

In September 2022, the Queensland Government released the Queensland Energy and Jobs Plan (QEJP) which establishes a pathway for the transformation of Queensland’s energy system to deliver renewable energy and decarbonisation. A key action of the QEJP is growing a safe and sustainable hydrogen industry. The Department of Energy and Climate (the Department) is now seeking feedback from the hydrogen sector and broader community on the next stages of regulatory reforms and has released the following consultation paper: An effective regulatory framework for Queensland’s hydrogen industry (Consultation Paper). 

This article will discuss the Consultation Paper and how to submit feedback. 

1. Overview of Consultation Paper    

The Consultation Paper considers the current regulatory framework that would apply to development of a hydrogen industry to identify any potential barriers or issues for effective regulation, with corresponding options for reform (in some cases). The reform proposals are intended to generate discussion and feedback but other feedback is welcomed whether or not in response to specific matters raised in the Consultation Paper.

The scope of the Consultation Paper is limited to renewable hydrogen (described as green hydrogen) and does not consider other types of hydrogen production, such as brown, grey, or blue hydrogen (each involving fossil fuels and/or carbon capture elements). Naturally occurring hydrogen is also excluded from the Consultation Paper although feedback on its regulation is welcome given the absence of an existing regulatory framework for this type of hydrogen. 

2. Current regulatory environment

A high-level overview of the key regulatory instruments that may apply to a renewable hydrogen project in Queensland is set out below: 

Planning Water Supply
Planning Act 2016 Water Act 2000
Electricity Hydrogen Pipelines
Electricity Act 1994 Petroleum and Gas (Production and Safety) Act 2004 (Qld)
National Electricity (Queensland) Law Gas Supply Act 2003 (Qld)
National Energy Retail Law (Queensland)   
Queensland Energy and Jobs Bill 2023  

Additionally, like most major projects, any hydrogen project may also be subject to environmental, workplace health and safety, and native title and cultural heritage, regulation at both a State and Federal level. The Consultation Paper identifies that the extent of the relevant regulatory instruments means that proponents may find it difficult to navigate this complexity, particularly for an emerging industry. It is therefore important that project approval pathways are clear and efficient to encourage proponents to invest in Queensland.

3. Potential barriers, issues, and opportunities for effective regulation and reform

Based on the regulatory complexity identified, changes may be required to the existing framework to ensure there is a coordinated and holistic approach to approval and development of hydrogen projects. The Consultation Paper explores the following key areas of the existing regulatory framework, with reform proposals presented where required:

Planning framework 

The Planning Act 2016 (Qld) (Planning Act) is the primary legislation in Queensland governing land use planning and development assessment, setting out applicable processes for the assessment of development applications and related matters.  

These existing processes allow for projects to be assessed against environmental, water access, cultural heritage, workplace health and safety, and land use requirements. It may be the case though that as new and innovative uses of hydrogen emerge, that regulatory requirements may need to be revised to properly respond. Guidance materials have been developed to assist with navigating the existing planning framework but feedback is sought on possible reform options as follows:

  • Maintaining the status quo: the current planning framework is established, mostly accommodates hydrogen development and therefore, could be maintained in its current form. The State could continue to offer necessary support by providing updated guidance for industry and local governments. 
  • Hydrogen projects that meet threshold to be assessed by State: the optionality in the decision maker for certain development (local government versus the State) can result in uncertainty about development assessment processes. Greater clarity and certainty could be achieved by establishing a threshold (based on the scale of the project) for assessment by the State, including the introduction of a State code prescribing assessment benchmarks hydrogen projects.  

Renewable energy 

The Consultation Paper notes that hydrogen projects will be extremely energy intensive and require access to affordable, large-scale renewable energy. This could impact the availability of renewable energy to other energy users, including households and other industrial operators. It will be important for regulatory settings to properly manage these competing energy demands. The Consultation Paper proposes the following reform options: 

  • Maintaining the status quo: no requirement for hydrogen producers to demonstrate that they have sourced sufficient renewable energy. The unchanged framework maintains fairness across all industries. 
  • Require a hydrogen generation licence for renewable hydrogen production: grant of the licence would be dependent on the hydrogen proponent demonstrating that they have properly planned for their renewable energy consumption to avoid adverse impacts on energy supply. A threshold could also be imposed so that certain small projects could be exempt from this requirement. 
  • Leverage proposed Renewable Energy Zone framework to provide for hydrogen projects: Renewable Energy Zones are proposed via the Energy (Renewable Transformation and Jobs) Bill 2023 (Qld) for the purpose of utilising capacity for renewable energy.  The Consultation Paper suggests incorporating hydrogen specific Renewable Energy Zones as this could allow the government to utilise areas with potential for renewable energy that are not needed solely for domestic decarbonisation.  

Pipelines 

The Consultation Paper recognises that pipelines are essential for the hydrogen industry but does not suggest further amendments to Queensland’s pipeline frameworks, given the recent passage of the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Act 2023 (Qld) on 10 October 2023 (authorising transportation of hydrogen pursuant to pipeline licences and imposing other relevant safety requirements).

Common user infrastructure 

The Consultation Paper notes that the upfront capital expenditure required to create or expand infrastructure can be a barrier to the development of new projects. This can be alleviated by government support in the development of common user infrastructure. The Government, using a whole of industry approach, is undertaking studies into the required infrastructure to meet the hydrogen industry’s needs. There are existing policies and frameworks for the delivery of common user infrastructure but the Consultation Paper invites feedback on any specific amendments that may be required as part of the broader hydrogen review (without proposing any specific reform options).

Water

The Consultation Paper states that the Water Act 2000 (Qld) and the relevant water plans, providing for water management in Queensland, are already sufficiently flexible to accommodate hydrogen project development.  However, regarding the availability of water, while there may be sufficient supply for now, the Consultation Paper considers that more water sources will be needed as hydrogen projects increase in number and scale. The Queensland Government is currently undertaking appropriate planning to ensure that water requirements for a green hydrogen industry can be met. The Consultation Paper nevertheless invites feedback regarding any specific amendments that may be required as part of the broader hydrogen review (without proposing any specific reform options).

Safety 

A hydrogen industry, like any other, is susceptible to hazards and risks that require appropriate safety considerations to be woven into regulatory frameworks. The Consultation Paper notes that the Office of Industrial Relations already administers several Acts, including the Work Health and Safety Act 2011 (Qld) and the Electrical Safety Act 2002 (Qld), that will facilitate safety regulation for hydrogen. Hydrogen will also be subject to safety requirements as a fuel gas under the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (Petroleum and Gas Act). 

Having regard to these existing instruments, the Consultation Paper invites feedback on whether the current approach is proportionate to the risks presented by hydrogen, whether a standalone Act is required, and whether changes are required to the applicable thresholds for Major Hazard Facilities. 

Environment

The assessment of environmental impacts resulting from hydrogen development will be a key component of appropriate approvals processes. The Consultation Paper notes, however, that such assessment will already occur under a number of existing frameworks, such as the Environmental Protection Act 1994 (Qld) and the Environmental Protection and Biodiversity Act 1999 (Cth).

As such, the Consultation Paper does not propose amendments to environmental assessment at this stage as the area is considered fit for purpose and applies equally to hydrogen projects, as it does to all development proposals. Feedback is still invited to determine whether any specific amendments are required, or if there are any risks associated with hydrogen that are not adequately addressed by the existing frameworks. 

Community Impact and Benefits 

The nature and scale of renewable hydrogen projects is likely to result in a variety of impacts for local communities. The Consultation Paper notes that there are benefits for industry in considering community impacts, just as there are positive economic benefits and employment opportunities for the local communities. It is also a priority at a State and Federal level that First Nations people are involved and benefitting from the hydrogen industry.

The Consultation Paper proposes the following reform options to ensure that hydrogen projects consider social impacts and address engagement with First Nations people: 

  • Maintaining the status quo: existing frameworks already require some hydrogen projects to consider social impacts. However, the requirement does not apply to all projects or require holistic consideration of cumulative impacts.  Additionally, without explicit regulatory requirements to assess and manage social impacts, management approaches vary creating a risk to the industry’s social licence to operate. 
  • Consider community benefits in assessment for a hydrogen generation licence: if a hydrogen generation licence framework is progressed, criteria could be included requiring proponents to demonstrate assessment and management of community impacts and benefits. The requirement could include engagement with First Nations peoples and communities.  Conditions could be imposed by decision-makers to ensure community matters are managed.
  • Extend existing assessment pathways to ensure stakeholder benefit: the Strong and Sustainable Resource Communities Act 2017 (Qld) could be extended to included hydrogen projects, meaning the projects would be required to consider social impacts and complete and environmental impact statement. Alternatively, criteria could be created within the development assessment process of the planning framework for hydrogen projects. 

Hydrogen storage

Hydrogen storage is a key challenge for the industry.  Above ground storage arrangements for hydrogen projects will require approval under the Planning Act 2016 (Qld) and, if certain thresholds are met, will also be regulated as a Major Hazard Facility under the Work Health and Safety Regulation 2011 (Qld). The Consultation Paper notes that these regimes are fit for purpose so whilst feedback is welcomed, no amendments are proposed.  

The Consultation Paper does acknowledge, however, that there is interest in underground storage of hydrogen. This could be done via underground formations such as salt caverns or depleted gas fields. The following reform options are proposed to facilitate underground storage of hydrogen:

  • Maintaining status quo: the existing regulation of Major Hazard Facilities applies whether or not the storage is above or below ground but further changes would be required to either the P&G Act or the Mineral Resources Act 1989 (Qld) (Mineral Resources Act) to enable storage in underground geological formations (so storage would be limited to tanks or similar physical structures). 
  • Accommodate underground storage of hydrogen in resources legislation: storage of hydrogen in undergrounds reservoirs could be accommodated by revising the Mineral Resources Act and the Petroleum and Gas Act. This would allow for the re-commercialisation of depleted gas reservoirs and other underground structures.
  • Create a new hydrogen storage framework: a new standalone Hydrogen Act could create a hydrogen storage licence. Interaction with the resources legislation described above would require careful consideration.  

4. Providing feedback

The Department is asking for feedback in response to the questions raised throughout the Consultation Paper, including in response to the various reform proposals. Feedback may also be provided in relation to other regulatory issues that are not addressed in the Consultation Paper.  

If you or your organisation wishes to provide feedback, this can be completed either through an online survey or by uploading a written submission here. Any feedback must be submitted by Friday, 1 March 2024 at 5.00pm.  
 

Key Contacts
James Plumb
Partner
James is a Partner in our Resources, Energy and Projects practice.
Elizabeth Harvey
Special Counsel
Elizabeth is a Special Counsel in our Resources and Energy practice.
Gemma Sweeney
Senior Associate
Gemma is a Senior Associate in our Resources and Energy practice.

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