Guarantee of Origin rules for renewable superpower plan hit below the baseline

The rules for Australia’s renewable energy and low-emission products guarantee of origin are open for public viewing, and include a compromise on issuing certificates to generation built before the scheme starts. 

The Guarantee of Origin (GO) draft outlines the rules governing the two frameworks, the Product GO (PGO) for low-emissions products which will start with green hydrogen and later include green steel and low emissions fuels, and the Renewable Electricity GO (REGO).

The GO scheme is part of the federal government’s $22.7 billion Future Made In Australia project and legislation to make it happen passed the Senate in December.

The draft rules will allow industry and renewable energy producers to weigh in before the end of March as to what the future GO scheme will look like, said assistant energy minister Josh Wilson in a statement.

“The GO Scheme is about building Australia’s future as a renewable energy superpower,” he said. 

“It will generate jobs in green industries and keep us on track for achieving Net Zero emissions by 2050. It will provide accountability for new products like green hydrogen and low-carbon liquid fuels.

“Hopelessly stymied by the climate deniers in its ranks, the Coalition voted against the GO Scheme after failing in government to deliver the scheme industry needed. That neglect has held back Australia’s emerging renewable energy and green manufacturing sectors for too long.”

The GO scheme is expected to be operating by mid-2025.

Below-baseline compromise

One element of the law establishing the GO scheme was the creation of below-baseline certificates, for renewable energy generators established before the scheme begins this year. 

Government program Greenpower, which already certifies renewable energy, said in a previous submission that these certificates weren’t allowed under the Renewable Energy Target  and shouldn’t be allowed under the GO as it would distort the market. 

The draft rules put a condition on who can use below-baseline certificates to offset their overall emissions.  

Only entities doing emissions-intensive, trade-exposed activities or who are creating PGO certificates are allowed to retire certificates before 31 January 2031.

And those retirements can only be done within 18 months of the generation of the electricity they represent.

Further decarbonisation

The idea behind the GO scheme is to certify Australian-made low-emissions products and replace the Renewable Energy Target (RET), which will finish at the end of 2030.

Certificates will show how a product is made and the emissions throughout its lifecycle, including during consumption.

The expectation is that just as the RET began the decarbonisation of the electricity industry, so the PGO scheme will help to decarbonise the economy, and help export products avoid carbon border taxes such as Europe’s CBAM.

The PGO scheme is also the basis on which claims will be made for the new hydrogen production tax incentive.

The draft rules cover the first section of the legislation, which is registration for the scheme and of renewable energy facilities, who can do it, and certification of products. 

PGO certificates will allow producers, exporters, and consumers to prove where a product is made, and the emissions associated with its production, transport, and storage.

REGO certificates will show when, where, and how renewable electricity is produced, allowing users to make verifiable claims about their renewable electricity use.