New legislation paving the way for hydrogen projects in Queensland

What you need to know

• The Queensland Government has passed theGas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023.
• This new legislation enables hydrogen to be transported under a pipeline licence granted in accordance with thePetroleum and Gas (Production and Safety) Act 2004(Qld).
• This is an important first step in the regulatory reform required to enable the development of hydrogen projects in Queensland.

What you need to do

• Monitor further anticipated reform in this space, including a consultation paper likely to be released by the Department of Energy & Public Works later this year.

This week new legislation has been passed which bolsters the regulatory framework required for the development of renewable hydrogen projects in Queensland.

On 10 October 2023, theGas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023was passed. The key amendments introduced by this Act relate to an expansion of the existing pipeline licence provisions in thePetroleum and Gas (Production and Safety) Act 2004(Qld) (P&G Act) to enable hydrogen to be transported under a pipeline licence. This provides a clear regulatory pathway for the licensing and operation of transmission pipelines to transport hydrogen and hydrogen carriers such as ammonia and methanol.

The P&G Act regime will apply in totality to these pipelines. This means that "pipeline land" must be secured before the pipeline can be constructed and operated. "Pipeline land" is generally obtained by way of an easement or written permission from the owner. Similarly, native title consents and cultural heritage agreements may be required, and an environmental authority will be necessary.

The new legislation does not deal with the authorisations for hydrogen processing or storage facilities. Presently, it is contemplated that these facilities will be largely regulated through the planning framework in Queensland.

However, a broad regulatory assessment for these projects is currently underway, led by the Department of Energy & Public Works. We understand that the Department is currently preparing a consultation paper which will deal with issues, opportunities and potential options regarding the broader regulatory settings relevant to hydrogen industry development. We expect to see the consultation paper released later this year.

The new legislation also included amendments to theGas Supply Act 2003(Qld) to expand its remit from processed natural gas to "covered gases", which include hydrogen, hydrogen blends, biomethane and certain other gas products. The amendments align with changes being progressed nationally to the National Gas Law and the National Energy Retail Law.

This regulatory review is consistent with the actions identified in the Government'sQueensland Energy and Jobs Planand theQueensland Resources Industry Development Plan.

The new legislation is an important first step in the regulatory reform required to enable the development of hydrogen projects in Queensland, and we expect to see further reform in the coming years.

We will continue to provide updates on these regulatory developments.

Authors:Libby McKillop, Senior Associate; Paul Wilson, Partner; Tony Denholder, Partner; Dale Gill, Partner; and Dan Brown, Partner.