Guarantee of origin scheme for green hydrogen, renewable electricity put on fast track

The Albanese government will fast-track the roll out of a national certification scheme that will guarantee the provenance of hydrogen – and electrons – produced in Australia, to distinguish whether they are derived from renewable resources or from coal or gas.

Federal Labor said on Tuesday that it hopes to have the Guarantee of Origin Scheme in operation by the second half of 2025 after doubling the funding for its development in the 2024/25 Budget to a total or more than $70.4 million.

The scheme – a version of which was proposed by the Morrison government in 2021 as part of its National Hydrogen Strategy – has been teased out under federal Labor into an “emissions accounting backbone” to support the development of green industry through its $22.7 billion Future Made in Australia program.

This will include a Renewable Energy Guarantee of Origin scheme, which will issue digital certificates proving when, where and how renewable electricity was produced – and which will replace the RET in 2030 as the framework for certifying renewable electricity.

First up, however, the scheme will focus on hydrogen – which can come in a range of colours, from green (renewables), to blue (gas) and brown (coal) – and will then expand to include low carbon liquid fuels like sustainable aviation fuel, green metals like steel and aluminium, and biomethane and biogas.

The scheme will issue digital certificates that allow producers, exporters and users to prove where a product was made, and the emissions associated with its production and transport. 

The government says the certificates will be used to establish eligibility for tax credits under the $6.7bn Hydrogen Production Tax Credit announced in the 2024/25 Federal Budget and are likely to play a crucial enabling role in the development of other green industries. 

“The Guarantee of Origin scheme is the most important green industry program you never heard of,” said federal Labor’s assistant minister for climate and energy, Jenny McAllister, on Tuesday.

“As the world decarbonises, it will be increasingly important for businesses to be able to account for the carbon emissions associated with their products. 

“The Guarantee of Origin scheme will give Australian companies a competitive advantage by providing government backed certification of the carbon intensity of key green products.” 

McAllister says the department is currently considering the submissions made as part of its consultation into the design of the scheme, with a final response to that consultation due to be released “shortly.”

From there, the plan is finalise the enabling legislation for the scheme so it can be put into action in the second half of 2025, the government says.