Statutes Amendment (National Energy Laws) (Other Gases) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 2 November 2023.)

The Hon. H.M. GIROLAMO (16:34): I rise to speak on the Statutes Amendment (National Energy Laws) (Other Gases) Bill and indicate I am the lead speaker from the opposition. This is another set of reforms born out of the national energy ministers meetings. This bill deals with amending the national energy laws, in particular through the National Gas (South Australia) Act 2008 and also the National Energy Retail Law (South Australia) Act 2011. As South Australia is the lead legislator of these laws, we are seeing this bill now after going through the energy ministers meetings and approval.

This bill, which was originally introduced by the former Liberal government Minister for Energy, the Hon. Dan van Holst Pellekaan, seeks to expand the regulations to include hydrogen, biomethane and synthetic methane, which are renewable gases, and the blending of these renewable gases with natural gases to create blends. We on this side are pleased to see the current Labor government is continuing these efforts.

Having these changes before us will assist in transitioning by cementing regulatory certainty in what is an emerging industry and a fast moving one at that. You only need to look at the rate of legislation that has passed through this place this week, and this is the next step that is following through. To see proof of this emerging technology in the community one needs only to look at the Tonsley precinct and its Hydrogen Park.

The next step from this trial is to increase the percentage of blend, and that will come, but it will come with long-term planning. The best opportunity for this is through new housing and commercial developments. With this bill it now becomes a live possibility: new homes and businesses will have the opportunity to have 100 per cent hydrogen with all the infrastructure, pipes and appliances applicable.

As has been stated here by our leader in the other place, the Liberals have a policy to be able to reach net zero by 2050, and in terms of the path that we want to take we acknowledge the complexity and challenges that are before us in ensuring it is a balanced approach that is taken. Our view is that all technologies should be on the table to ensure a successful transition and this does include gas.

The gas industry is committed to be net zero by 2050 through the use of technologies such as hydrogen, renewable gases and carbon capture. The bill that is before us will incorporate renewable gases and hydrogen into the National Gas Law. It will help reduce the emissions profile of the gas sector in South Australia and allow gas to be a viable energy choice for households and businesses in the future. I look forward to seeing what we can do in the future.

The Hon. R.A. SIMMS (16:37): I rise to speak on the Statutes Amendment (National Energy Laws) (Other Gases) Bill 2023 in what will be my last speech during state parliament's gas week. This bill refers to the definition of gas in our legislative instruments, as has been noted by the Hon. Heidi Girolamo. Currently, the National Gas (South Australia) Act 2008 refers to natural gas throughout. I have talked a bit this week about greenwashing. That is no more evident than in the use of the term 'natural gas', because we know that natural gas is not really natural. It is a non-renewable fossil fuel. The word 'natural' has been coopted by the gas industry to buy a social licence for this polluting energy source, which mostly comprises methane.

Gas production and burning gas for energy produces greenhouse gases that are detrimental to our environment and our health and drive climate change. By clarifying the definition of gases, this bill will allow for gases such as green hydrogen to be subject to the same provisions as natural gas was previously. The Greens are supportive of green hydrogen as an alternative fuel source. I have indicated that during the various debates we have had this week.

According to the Climate Council, only green hydrogen—that is, hydrogen produced with renewable energy—belongs in a zero emissions future. South Australia has sufficient renewable energy to lead a green hydrogen industry. In fact, that was the promise of the Malinauskas government at the last election.

It was disappointing for us to see that what became a promise ended up being a non-core commitment when the legislation came before the parliament, and instead we saw the government being agnostic on the question of whether or not they should be using green or blue hydrogen. That certainly was not the proposition they took to the people of South Australia. I will be interested to know what the Premier's Delivery Unit says about that.

However, we would like to once again put on the record that we are opposed to blue hydrogen, in fact to any other colour in the hydrogen rainbow that is not green. Blue hydrogen produced from fossil fuel is not the way forward; it locks us into a non-renewable gas future. We do note, however, that this bill includes a reference to gas blends.

I should note that I am pretty cynical about gas blends, because they are talked about in the South Australian context as being pumped into homes through the existing gas infrastructure and being used for residential use, and the environmental benefits of that are negligible. I think, from memory, the best that you can hope for in terms of a gas blend is about 20 per cent hydrogen with so-called natural gas. That does not deliver demonstrable environmental benefits, I am advised.

There is concern about a lot of emphasis being put on that at a time when we should be focusing on transitioning households away from gas, looking at some of the approaches that have been taken in other states. Obviously, no other party supported the Greens' push to ban gas connections on new homes from 2025. There has not been support for the Greens' push to prevent developers from mandating new gas connections, but there are things the government could do in terms of putting money on the table, as has happened in the ACT and Victoria, to encourage home owners to move away from gas. That would reduce their energy bills and the environmental effect. That is the missing piece in the puzzle in terms of the government's approach.

We recognise there may be some need for gas blending in industrial settings, and therefore we will not oppose the inclusion of that in this bill, but we want to see much more work being done to support these industries to start to move away from methane gas, and we want to see fossil fuel being eliminated.

Changing the definitions for gas in the Gas Act will allow us to become a green hydrogen superpower, if this is the government's ambition, and I sincerely hope that it is. We are ready to support a green hydrogen plan if the Malinauskas government really wants us to be a leader in a zero emissions future. We, of course, welcome any moves away from methane gas, but we want to ensure that we are not just throwing another lifeline to the fossil fuel industry and prolonging the use of gas under another name.

We will continue to monitor this closely, and of course I will continue to ask questions in this place and give speeches outside of our energy week on this topic to ensure that we can keep the issue on the burner, so to speak. With that, I conclude my remarks.

The Hon. C. BONAROS (16:43): I was not going to speak, but I will speak briefly. I am sorry, Mr Simms—

The Hon. R.A. Simms: Not again!

The Hon. C. BONAROS: It should come as no surprise to the Hon. Rob Simms by the end of this week. I am being consistently inconsistent with the Hon. Robert Simms and, in that, supporting this bill. I do so because of some of the comments just made. There is a theme here this week. We know that a lot of other gases are mooted for decarbonisation and that this bill extends the scope to apply to other sorts of gases.

We have a complementary set of bills that we are considering. Unlike one of the previous bills, this one regulates this space from an economic perspective rather than a regulatory one. It is intended to provide some economic efficiency so that producers of gas can get product to market. It has been described as a futureproofing bill so that other gas types that are found could be brought within the scope of those national laws.

In SA, the way it was very simply put to me is it is the downstream regulation, picking up the definitions at the national level and reflecting that in our local gas act, which is also being amended. I suppose the point I am making is that if we have concerns around those other sorts of gases and the gas blends, it is worth noting that as a result of this bill we will indeed be incorporating these new definitions that are within this bill in the next bill that we are going to be considering.

If we are talking about gas blends, for instance, and this bill allows for gas blends, the next bill, which is very simple in nature, actually adopts those definitions at a local South Australian level. I am supporting it on the basis that, as I said, from an economic efficiency perspective the intent is to get products to market and provide that futureproofing. We do not generally get tied in knots over national laws, but I think it is important to put that into context, given that the next bill we are going to be debating effectively adopts the definitions that we are about to adopt now.

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (16:45): I thank the members of the council who have made contributions: the Hon. Heidi Girolamo, the Hon. Robert Simms and the Hon. Connie Bonaros. This bill is an essential precursor for development of the domestic hydrogen and biomethane industries. It will remove barriers which could hinder access by producers of hydrogen and other gases to infrastructure and markets. It will ensure consumers are protected as Australia's energy system transitions to net zero emissions. It will allow businesses to seize the opportunities of the hydrogen industry as the world looks for pathways to decarbonisation.

In South Australia, this bill has significant implications for the Upper Spencer Gulf region, encompassing Whyalla, Port Augusta and Port Pirie, as well as Eyre Peninsula more broadly, the Far and Mid North, Riverland and South-East. The Malinauskas Labor government has recognised the huge potential of using the plentiful solar and wind resources of this state to manufacture renewable hydrogen.

We are determined to foster a broad hydrogen industry. To achieve creation of that broader industry, we must first build domestic hydrogen supply and demand. This government is putting down the first foundation stone, the Hydrogen Jobs Plan, which will see the world's biggest electrolyser built in Whyalla, alongside a hydrogen-fuelled power station and associated storage.

We will prove it can be done, and this will encourage commercial operators to proceed with plans for their own hydrogen manufacturing facilities. Before these businesses make final investment decisions, they need reassurance that they will be able to get their hydrogen to their customers, and that is where this bill comes into play. It establishes the framework for the market.

The bill also facilitates growth in the biomethane sector, creating a pathway for business to transform a problem of waste into an opportunity for revenue. It futureproofs the regulatory system for the years ahead, anticipating that competitive industry can develop in blending gases and allowing for innovation in energy gases, as we look to address reducing the emissions which cause climate change across all sectors, including manufacturing, processing and transport.

The need for these reforms was identified through the national ministerial council of energy ministers. The bill has been refined through two rounds of public consultation and takes into account advice from the Australian Energy Market Commission, the Australian Energy Market Operator, the Australian Energy Regulator and the Western Australian Economic Regulation Authority.

The Malinauskas government is committed to decarbonising the economy and is pleased to have a leadership role in energy law reforms which will pave the way for Australia as a whole to advance towards that goal. This bill is a facilitator, providing for a level playing field for an industry to develop. I thank members for their support and commend the bill to the council.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (16:50): I move:

That this bill be now read a third time.

Bill read a third time and passed.