Pressing GO! on Clean Energy Certification: Understanding the Future Made in Australia (Guarantee of Origin) Bill 2024

The Future Made in Australia (Guarantee of Origin) Bill 2024 (GO Bill) marks a pivotal step in Australia’s clean energy transition, establishing a framework to track and verify low-emissions products and creating an enduring certification mechanism for renewable electricity.¹ The landmark Bill was introduced into Parliament on 12 September 2024 by the Department of Climate Change, Energy, the Environment and Water (DCCEEW). The GO Bill, the Future Made in Australia (Guarantee of Origin Charges) Bill 2024 and the Future Made in Australia (Consequential Amendments and Transitional Provisions) Bill 2024 together establish the broader Guarantee of Origin (GO) scheme framework.² Further details on the operation of the GO scheme – including rules, regulations, methodology determinations and measurement standards – will be provided through legislative instruments.³

The Senate referred the provisions of the proposed legislative package to implement the GO scheme to the Environment and Communications Legislation Committee for the report by 31 October 2024. The Committee is taking submissions until 26 September 2024. For more information visit the Senate Committee website.

On 20 September 2024, the Hamilton Locke New Energy team had the privilege of attending the Clean Energy Council’s member briefing conducted by the DCCEEW. The briefing provided valuable insights into the operational framework of the GO Bill and its implications for the energy sector. This article seeks to provide an overview of the key elements of the GO Bill to enhance understanding of its intended application.

GO Scheme Overview

The GO scheme is intended to support the Australian Government’s Future Made in Australia plan by attracting investment and leveraging the financial and industrial opportunities that arise from the global transition to net zero.⁴ It will function as an internationally aligned, voluntary certification program for low-emissions products and renewable electricity. Certification will initially focus on renewable electricity and hydrogen, with a phased expansion to encompass low-carbon liquid fuels and green metals.⁵

The GO Bill establishes a system that allows manufacturers to make objective and credible claims regarding the emissions associated with their products.⁶ Through the certification of the emissions profile of these products, the GO Bill encourages more informed investments, fostering the growth of markets focused on cleaner energy and low-carbon products.⁷ This initiative is poised to boost Australia’s competitiveness in emerging export sectors such as clean energy, sustainable metals and next-generation fuels, while accelerating the global transition to net-zero emissions.⁸

Key Elements of the GO Bill

The GO Bill outlines several key elements that underpin the structure and functionality of the GO scheme.

(1) Governance

The Clean Energy Regulator (Regulator) will administer the scheme, overseeing the registration of participants, the issuance of certificates and the operation of a public register to track certified products and renewable energy.⁹

(2) Registration

To participate, persons must apply to the Regulator and undergo a fit and proper person test. Part 2 of the GO Bill sets out the matters the Regulator must have regard to in determining whether someone is fit and proper to register for the GO scheme.¹⁰ This includes:

1. whether the person has been convicted of an offence for contravening a law of the Commonwealth, a State or Territory involving fraud or dishonesty;
2. whether the person has contravened, or given false or misleading information, under climate change law; and
3. whether the person is an individual who is insolvent under administration.¹¹

This assessment is designed to verify the applicant’s suitability for participation in the GO scheme¹² through adherence to ethical, legal and financial standards. This is a common integrity standard present in other climate change laws which are also administered by the Regulator.¹³

For renewable electricity certification, eligible participants may register one of four facility types:

1. accredited power stations – noting the GO Bill allows streamlined registration for facilities that are already accredited under the Renewable Energy Target (RET);¹⁴
2. electricity generation systems;¹⁵
3. energy storage systems;¹⁶ or
4. aggregated systems, which will allow small scale systems to participate through aggregation to form a single “facility” for the purpose of creating certificates.¹⁷ However, if it contains a small generation unit that has been issued Small-Scale Technology Certificates, it will only be eligible for registration after 2031.¹⁸

The GO Bill introduces a novel concept for certifying electricity produced by energy storage systems, contingent upon the stored electricity being verifiably renewable. This may be demonstrated through direct supply from a related generation system (defined in the GO Bill as a ‘direct supply relationship’) or through the retirement of REGO certificates, the surrender of Large-Scale Generation Certificates (LGCs), or a combination of these surrenders.¹⁹ Given the inherent efficiency losses during the storage and dispatch process, the subordinate rules will specify the quantity of electricity deemed to have been consumed by the energy storage systems in creating its dispatch.²⁰

While participation in the GO scheme is voluntary, it offers participants significant advantages – including access to policy opportunities and funding support and reduced trade barriers by aligning with international market standards.²¹ For example, GO certificates could serve as a critical eligibility criterion for the Government’s $6.7 billion Hydrogen Production Tax Incentive, thereby incentivising GO scheme compliance.²²

(3) Certification

Participants who choose to take part in the GO scheme are able to generate certificates detailing a product’s emissions profile or renewable attributes.²³ The GO Bill defines and provides a framework for two types of certificates:

1. Renewable Electricity Guarantee of Origin (REGO) certificates; and
2. Product Guarantee of Origin (PGO) certificates.²⁴

Both certificates will be visible on a public register maintained by the Regulator to enhance transparency and consumer confidence regarding renewable electricity claims and product emissions.²⁵

In summary, REGO certificates:

1. certify that the electricity linked to the certificate is verified as renewable;
2. are tradeable independently of the physical delivery of electricity;
3. enable the holder to claim the benefits of renewable electricity use; and
4. offer detailed information about the generation and delivery of electricity, including facility age, fuel source, time of generation and facility location.²⁶

REGO certificates are set to operate alongside the existing LGCs under the RET until this system is phased out in 2030.²⁷ From 1 January 2031, REGO will function as the primary certification method for green electricity,²⁸ providing a seamless transition for the industry and ensuring continuity in renewable energy certification.

In summary, PGO certificates:

1. track and verify the carbon intensity and other key attributes of products throughout the product’s entire lifecycle;
2. document information on emissions associated with the supply of raw materials, production, storage and transport to the point of consumption or international departure;
3. employ a chain of custody model to monitor the physical movement of products through the supply chain; and
4. provide a reliable basis for making credible claims regarding the production and consumption of products.²⁹

PGO certificates can be likened to a ‘nutrition label’ that accumulates more information as the product moves through each stage of production.

(4) Timestamping and residuals

REGO certificates are issued based on the eligible amount of electricity generated or dispatched by a facility within a specified time period.³⁰ Clause 91 of the GO Bill designates a default one-hour period and each certificate is timestamped with the hour during which the renewable electricity was generated or dispatched.³¹

Certificates are generated by combining two components:

1. eligible amounts (whole megawatt hours produced within an hour that can create full REGO certificates);³² and
2. residual amounts (fractional megawatt hours produced within an hour).³³

The residual amounts are aggregated over a month to form additional certificates, which are timestamped by month rather than by hour.³⁴  Residual fractions that do not amount to a full megawatt hour by the end of the month are carried over into the following month.³⁵ However, any residuals that remain at the end of the calendar year – that do not total a full certificate – will be discarded, as certificates cannot extend across calendar years.³⁶ Although the GO Bill specifies one-hour periods for certificate creation, the rules may provide additional flexibility by adopting alternative time intervals, such as daily, monthly or yearly timestamps.³⁷

(5) Transitional provisions

Transitional provisions within the GO Bill address the period between its commencement and the conclusion of the RET framework in 2030, allowing facilities accredited under the RET to streamline their registration for REGO certification as noted above. However, electricity generation can only be applied to create either LGCs under the RET or REGO certificates, but not both.³⁸ Moreover, electricity that has been used in other certification schemes – such as the creation of International Renewable Energy Certificates – is ineligible for generating REGO certificates.³⁹ These measures ensure a seamless transition while preventing the duplication of credits across multiple schemes.

(6) Below baseline certificates

Baselines that have been calculated under the Renewable Energy (Electricity) Act will apply to facilities that are also registered under the GO scheme, ensuring consistency in baseline calculations and emissions tracking.⁴⁰ Generation below the baseline will be able to create REGO certificates but these will be noted as being below-baseline REGO certificates.⁴¹

The GO Bill prohibits the Regulator from retiring below-baseline REGO certificates generated prior to 1 January 2031 if the rules establish specific conditions for such retirements and those conditions have not been fulfilled.⁴²

Aligning with Global Markets and Supporting Australia’s Green Industry

The GO Bill positions Australia to align with the growing international demand for verifiable low-emission products, helping attract investment and fostering the growth of green industries. As global markets, such as the European Union and the United States, implement policies like the Carbon Border Adjustment Mechanism and the Renewable Energy Directive II, the demand for certified renewable electricity, hydrogen and other low-emissions products is rapidly increasing.⁴³ By establishing a reliable certification system, the GO Bill ensures that Australian-made clean products meet these emerging global standards, while also aligning with domestic frameworks such as the National Greenhouse and Energy Reporting scheme.⁴⁴ This integrated approach allows industry and state-led certification schemes to leverage GO scheme data, supporting interaction with international frameworks and enhancing Australia’s competitiveness in global markets.⁴⁵

Building Consumer Confidence and Safeguarding Against Greenwashing

The GO Bill also plays a crucial role in building consumer confidence by ensuring that claims of low emissions are supported by credible, transparent data. As low-emissions products like renewable electricity and hydrogen are often indistinguishable from their higher-emission counterparts, robust certification is essential to justify the ‘green premium’ many consumers pay for sustainable options.⁴⁶ Absent trusted certification, the market becomes vulnerable to greenwashing, where false claims of sustainability undermine the integrity of genuine low-emissions products.⁴⁷ The GO Bill helps safeguard against greenwashing by offering a clear framework for certifying the carbon footprint of products, ensuring that consumers and businesses alike can confidently invest in clean energy. By doing so, the GO Bill supports a level playing field in markets where verifiable low-emission products can differentiate themselves and attract demand based on their certified emissions attributes. This will be essential as Australia seeks to maintain its position as a leader in clean energy while supporting international decarbonisation efforts.

For more information read the GO Bill or the Explanatory Memorandum here.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.

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¹Explanatory Memorandum, Future Made in Australia (Guarantee of Origin) Bill 2024 (Cth) <https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r7245_ems_f6ba1951-c855-47e4-af3d-9bbae044ea6b/upload_pdf/JC014047.pdf;fileType=application%2Fpdf> 6 (‘Explanatory Memorandum’).

²‘Guarantee of Origin Scheme’, Australian Government Department of Climate Change, Energy, the Environment and Water (Web Page, 13 September 2024) <https://www.dcceew.gov.au/energy/renewable/guarantee-of-origin-scheme>.

³Explanatory Memorandum (n 1) 7.

⁴Ibid 6.

5Ibid.

⁶Ibid.

⁷Ibid.

⁸Ibid.

⁹Ibid 7.

¹⁰Ibid [98].

¹¹Ibid [143].

¹²Ibid [142].

¹³Ibid [141].

¹⁴Ibid [418]-[422].

¹⁵Ibid [423]-[440].

¹⁶Ibid [441]-[452].

¹⁷Ibid [375]-[380].

¹⁸Ibid [453]-[463].

¹⁹Ibid [381]-[384].

²⁰Ibid [502].

²¹Ibid 6.

²²Ibid.

²³Ibid.

²⁴Ibid 8.

²⁵Ibid [629]-[631].

²⁶Ibid 8.

²⁷‘Guarantee of Origin Scheme’, Australian Government Department of Climate Change, Energy, the Environment and Water (Web Page, 13 September 2024) <https://www.dcceew.gov.au/energy/renewable/guarantee-of-origin-scheme>.

²⁸Explanatory Memorandum (n 1) 7.

²⁹Ibid 8.

³⁰Explanatory Memorandum (n 1) [495].

³¹Ibid [496].

³²Ibid [497].

³³Ibid [512].

³⁴Ibid [513].

³⁵Ibid [517].

³⁶Ibid [519].

³⁷Ibid [496].

³⁸Ibid [572]-[573].

³⁹Ibid [573].

⁴⁰Ibid [385].

⁴¹Ibid [388].

⁴²Ibid [618].

⁴³‘Implementing a Guarantee of Origin Scheme’, Australian Government Department of Climate Change, Energy, the Environment and Water (Impact Analysis, 2024) 8 <https://oia.pmc.gov.au/sites/default/files/posts/2024/09/Impact%20Analysis_0.pdf> (‘Impact Analysis’).

⁴⁴Explanatory Memorandum (n 1) 7.

⁴⁵Ibid.

⁴⁶Impact Analysis (n 43).

⁴⁷‘New Guarantee of Origin Scheme Paves the Way for Australia’s Emerging Net Zero Industries’, Clean Energy Council (Media Release, 12 September 2024) 1.