Queensland Government opens the valves on hydrogen pipeline regime – make a submission now

The Queensland Government's legislative review to support the regulation of renewable hydrogen development and use in Queensland is underway and as part of this, it announced on 6 March draft legislation to provide certainty regarding the regulation of the transportation of hydrogen via pipelines.

The draft Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023 places the regulation of these pipelines centre stage in the State's development of a hydrogen industry. Interested stakeholders are invited to comment on the provisions which propose to extend the existing pipeline regulatory framework to hydrogen. If you would like to make a submission, you have until 5:00PM AEST on Friday 3 April 2023 to do so.

A regulatory review for all components of the hydrogen value chain is planned for 2023.

Why hydrogen pipelines need new regulation

Currently there is no specific regime in Queensland for granting a licence or authority for the construction and operation of pipelines for transporting hydrogen. This has been perceived as a looming regulatory barrier to the development of a green hydrogen industry in Queensland.

The Queensland Government is proposing to bring the licensing and development of pipelines transporting hydrogen, biomethane and other renewable gas within the purview of the Gas Supply Act 2003 (Qld) (GS Act) and the Petroleum and Gas (Production and Safety Act) 2004 (Qld) (PAG Act).

These legislative instruments are relevant in the regulation of gas pipelines because:

• the GS Act is the principal piece of legislation regulating gas distribution pipelines (ie., those transporting gas from transmission pipelines to gas users); and
• the PAG Act is the principal piece of legislation regulating gas transmission pipelines (ie., those that transport gas from processing and storage facilities over long distances to distribution networks or large-scale gas users).

This follows amendments to the National Gas Law and National Gas Rules which are presently before Parliament are aimed at ensuring market bodies may exercise their functions and powers in relation to hydrogen and other covered gases. It is expected those amendments will pass later this year.

What would these proposed changes mean for …

… pipeline operators, prospective proponents of hydrogen projects?

The proposed changes will provide a clearer regulatory pathway for the construction and operation of hydrogen gas pipelines – including proponents being able to avail themselves to the existing regimes for land access under the PAG Act. Incumbent pipeline operators familiar with the current licensing and approval regimes will be relieved to know that these pipelines will be regulated in largely the same manner as natural gas pipelines. Further, such pipeline operators may be able to take advantage of the footprint of their existing pipelines (either by expanding or conducting parallel hydrogen pipelines).

… retailers?

Retailers should note that their pre-existing distribution authorities will not automatically be deemed to refer to this new concept of "covered gas". They would need to apply for such an amendment per the new chapter 2, part 1, division 2 of the GS Act.