Submission

Hydrogen and Renewable Energy Act

The Australian Hydrogen Council (AHC) is the peak body for the hydrogen industry, with over 100
members from across the hydrogen value chain. Our members are at the forefront of Australia’s
hydrogen industry, developing the technology, skills and partnerships necessary to ensure that
hydrogen plays a meaningful role in decarbonising Australian industry.


AHC welcomes the development of legislation to create ‘one window into government’ for the
state’s hydrogen developers. Aligning approvals and land use legislation will help South Australia to
realise its hydrogen ambitions and provide certainty for investors seeking to develop hydrogen
and/or renewable energy opportunities in the state.


We note that the new legislation will leverage approvals processes currently used in South Australia
which have served industry, and community well for some time. Using these existing processes will
ensure that robust consultative frameworks are developed to enable hydrogen to gain and maintain
social license in South Australia.


AHC makes the following comments with respect to the issues for discussion outlined in the Issues
Paper.


Issue 1 – Objects of the Act
AHC considers that the proposed objects of the Act are suitable. We believe that low emissions
hydrogen has a role to play in assisting Australia to reduce greenhouse emissions. However, in order
to fulfill this role, industry, government and the community must come together to enable a
hydrogen industry to establish itself for the benefit of all. The proposed objects note the key
considerations of these stakeholders and should establish a pathway to a sustainable hydrogen
sector.


In order to best achieve the stated objectives, the Act should avoid imposing unnecessary
obligations on industry. These include amending elements of the regulatory framework which are
currently fit for purpose, duplicating regulatory requirements and adding costs or uncertainty where
it does not currently exist. Suggestions relating to these issues are contained in responses to issues
below.


Issue 2 – Renewable energy
In the interest of national harmonisation, AHC consider that the definition of renewable energy
could be aligned with the Federal Renewable Energy (Electricity) Act 2000 definition of eligible
renewable energy sources. The extent to which this is a matter of importance will however be
evident once draft legislation is released for consultation and AHC will provide further views at this
time.


Many proponents are seeking to establish hydrogen production in a number of Australian
jurisdictions. Harmonising definitions and processes across jurisdictions will hasten the pathway
toward the industry becoming commercially sustainable and sharing economic as well as
environmental benefits with all Australians.

We note that jurisdictions are undertaking work with regard to the development of Renewable
Energy Zones and urge South Australia to engage in these processes to further streamline approval
processes.


Issue 3 – Renewable Energy Priority Areas (REPA)
AHC considers that the use of REPAs to identify and prioritise locations for competitive land access
tendering provides a mechanism to maximise the mutual benefits of land access allocations. This will
ensure that industry and the community share the positive outcomes of any development.
We note that mechanisms should exist to grant REFLs over pastoral land outside REPAs. Member
experience suggests that pastoralists and native title holders in these areas are able to negotiate
competitive terms and a further state run competitive process is not required in these instances.


Issue 4 – Renewable energy projects
In line with our comment in relation to issue 2, AHC considers that there may be benefit in aligning
the scope of the Act with the definition of eligible renewable energy sources in S17 of the Federal
Renewable Energy (Electricity) Act 2000. We note that this would likely require amendment to the
Petroleum and Geothermal Energy Act which currently covers geothermal-aquifers.


Issue 5 – What is not covered
Noting previous comments relating to nationally consistent definitions of renewable energy, AHC
generally agree with the list of exclusions from the Act.


Issue 6 – Hydrogen generation
AHC agrees with the proposed definition to the extent that it does not exclude other potentially
viable forms of hydrogen production technology.


Issue 7 – Hydrogen generation activities excluded from the Act
The approach to excluding hydrogen generation activities from the Act appears to be a pragmatic
approach to ensuring that testing and domestic use does not need to be licensed.


Issue 8 – Renewable Energy Feasibility Licence (REFL)
AHC considers that the process used to grant REFL provides sufficient certainty for proponents of
potential hydrogen projects while maintaining a degree of government control to prevent land
banking. We note that an REFL can be extended at the Minister’s discretion and consider that the
development of criteria to guide Ministerial decision making could be specified in regulation to add
greater transparency to the process.

It is not clear from the Issues Paper how the release of REPA land will be conducted. AHC considers
that the competitive processes to acquire a REFL should be concurrent rather than staged to ensure
that proponents who are seeking a REFL on a particular piece of REPA land will have certainty that
they will not have to wait until the REPA is released and can engage in planning and preliminary
work in a timely manner.


Issue 9 – Renewable Energy Infrastructure Licence (REIL)
AHC supports the approach to REILs as outlined in the issues paper.


Issue 10 – Hydrogen Generation Licence (HGL)
AHC supports the approach to HGLs as outlined in the issues paper however we consider that the
Minister should have discretion to issue an HGL with an area of greater than 5km2 upon application
by the applicant.


Issue 11 – Associated Activity Licence (AAL)/Research and Demonstration Licence
AHC considers that AALs and Research and Demonstration Licences may be required to support the
broader regulatory approach to approvals outlined in the Hydrogen and Renewable Energy Act.


Issue 12 – Environmental impact assessment process (Stage 2)
AHC supports the proposal to align environmental impact assessment requirements with existing
processes and does not consider that a hydrogen specific approach is required.


Issue 13 – On-ground activity approvals (Stage 3)
AHC considers that gaining social licence from the community is every bit as crucial as a licence
gained under a legislative framework. Consultation with stakeholders should be thorough and
meaningful and consider impacts on stakeholders outside the immediate REPA who may be
impacted by the conduct of licensed activities. Such groups could include residents and businesses
who may be impacted by construction activities (eg, increased traffic volumes on local roads) or
parties who use adjoining land for recreational purposes.


Issue 14 – Land within a Renewable Energy Priority Area (REPA)
AHC supports the approach outlined in the Issues Paper.


Issue 15 – Freehold land
AHC supports maintaining current arrangements with respect to freehold land and believe that the
provisions of the Hydrogen and Renewable Energy Act should not apply.

Issue 16 – Native Title
AHC acknowledges the stewardship of First Nations people over Australian land encourages their
participation in Australia’s transition to net zero emissions. We would be pleased to work with
traditional owners and the South Australian government if there is a role for us to do so.


Issue 17 – Data reporting
AHC considers that sharing information is vital in order to establish a clean hydrogen industry. We
are concerned however, that the approach to data reporting outlined in the Issues paper may
disincentivise investment.


We appreciate that the free provision of information will facilitate the development of the industry
by reducing costs for subsequent proponents, however this approach does not recognise the costs
borne by the initial proponent in collecting the relevant data.


We consider that any data provided to government should be in respect to State owned land only;
not publicly released until either a decision not to proceed with a development has been made, or
the facility has been decommissioned; and be aligned with existing data provision requirements, eg,
AEMO or where data sharing is a condition of any grant funding provided.


Issue 18 – Fees, charges and benefit sharing
AHC is keen to see a thriving clean hydrogen industry establish itself in Australia. As outlined in the
Issues Paper, concessions may be required until such time as the industry is self-sustaining. We
consider that the imposition of a benefit sharing mechanism once the industry is established
recognises pre-commercial nature of the hydrogen industry but charts a course towards a future
where clean hydrogen production can benefit the broader community.


Similarly, the imposition of rent levied at market value prior to the industry reaching commercial
sustainability will act as a disincentive to investment. This may see proponents seek to locate
hydrogen production facilities outside South Australia. We consider that rental payments under
REILs or HGLs should be a nominal amount to allow the industry to develop.

Conclusion

AHC supports the development of legislation to provide for an all-inclusive approach to land use and
planning approvals for the purposes of hydrogen and renewable energy generation. The proposed
approach seeks to leverage existing processes where possible to minimise disruption to developers,
and has identified and addressed issues with the current regulatory framework to reduce barriers to
investment.


We note that the process is intended to provide potential proponents with certainty around
approvals and consequently we consider that it should be made clear that the provisions of the Act
will not be made retrospective. The South Australian Government can provide further certainty by
outlining transitional provisions to bridge the gap between the current arrangements and those of the Act. AHC suggests that these provisions should include an assurance that the grant of any licence
(including the competitive allocation of REFLs) under the Hydrogen and Renewable Energy Act will
take into account agreements that have already been executed. This includes existing agreements
with pastoral lessees and relevant parties relating to Native Title. We further consider that REFLs
granted on a non-competitive basis due to existing exclusivity agreements, revert to competitive
tender when the current agreements cease.


As an additional transitional arrangements we recommend that the State continue to grant access to
proponents under S49J of the Pastoral Land Management and Conservation Act 1989, where
agreements are in place with pastoralists. This will allow for initial investigations to occur in line with
current processes. S49J licences can be converted to REFLs at the commencement of the new Act.
Crucially, the processes to be governed by the Act ensure that all community stakeholders are
appropriately engaged in decision making about land which belongs to all South Australians.
We look forward to continuing to engage on this matter.

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