Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

Australia urgently needs to reduce emissions and transition to a zero carbon economy. My community of North Sydney have long realised that the net zero transition is not just an obligation but an opportunity to revitalise Australian industry, increase productivity and meaningfully improve the quality of life for all Australians. In that context, my community largely welcomes the Future Made in Australia policy package to attract invest investment in low-carbon technologies and projects in Australia and leverage the financial and industrial opportunities that arise from the global transition to net zero.

The Guarantee of Origin scheme will underpin the Future Made in Australia package by establishing a critical carbon accounting framework on products made under the package. Specifically, the scheme will function as an internationally aligned, voluntary certification program for low-emissions products and renewable electricity. Certification will initially focus on renewable electricity—through the creation of renewable energy guarantee of origin certificates, or REGO certificates—and hydrogen and associated products through the product guarantee of origin certificates. There will be potential for a phased expansion to low-carbon liquid fuels and green metals.

There's a real need for this. Within the Australian economy there is a lack of trusted, consistent information about low-emission Australian made products and no enduring mechanism to certify renewable electricity. I welcome the government's efforts to provide a legislative framework for a voluntary scheme to certify products such as hydrogen and renewable electricity. However, we must exercise a large degree of caution when implementing such a scheme.

Product guarantee of origin certificates can be likened to a nutrition label that accumulates information, as the product moves through each stage of production, and signals healthier food choices to customers. In this case, these new certificates will indicate lower emissions products. As with all ticks of approval that purport to certify a product, they run the risk of misrepresenting these products. We all remember the Heart Foundation's healthy heart tick which, while intended to help consumers make healthier choices when buying food, drew considerable criticism after ticks were awarded to McDonald's burgers and nuggets. Furthermore, food manufacturers had to pay a fee to get the heart tick on their products, leading to products that were just as healthy, if not healthier, being overlooked by consumers simply because the manufacturer did not apply and pay for the heart tick.

When it comes to certifying environmental credentials, a poorly devised scheme risks greenwashing products by providing a government tick of approval that consumers assume they can trust. The government's own Climate Active carbon neutral scheme has been criticised for lacking credibility and integrity in climate neutrality claims, with the climate neutral certification being awarded to Ampol, for carbon-neutral petrol, amongst others. Other international certification schemes like the Forest Stewardship Council and the Roundtable on Sustainable Palm Oil have also faced their share of criticisms. The lessons from these certification schemes are clear: we need to exercise caution when providing a stamp of credibility. A poorly designed scheme risks being used to greenwash products, undermining the intended benefits of certification, and ultimately to support the fossil fuel industry.

On the other hand, a well-designed Guarantee of Origin system could play a pivotal role in supporting the production and use of low-emissions products. It could allow manufacturers to make objective and credible claims regarding the emissions associated with their products and encourage more informed investments, spurring growth of market forces focused on cleaner energy and low-carbon products. It could boost Australia's competitiveness in emerging export sectors, such as clean energy and sustainable metals and fuels, while accelerating the global transmission to net zero emissions.

It could provide voluntary participants with significant advantages, including access to policy opportunities and funding support, such as the hydrogen production tax incentives, and reduced trade barriers through alignment with international market standards. This is particularly important as other economies bring in carbon pricing, making it increasingly likely that goods imported from countries, including Australia, with a lower carbon price or no carbon price will face new levies. Global markets such as the European Union are implementing policies like the Carbon Border Adjustment Mechanism, increasing demand for certified renewable electricity, hydrogen and other low-emissions products. Australia will need a reliable, transparent and trustworthy certification system to ensure our Aussie-made products meet these emerging global standards. Clearly, it's critical we get this right.

The enabling legislation creates two types of certificates: a product guarantee of origin certificate to record attributes of products including their emissions, and, as I said before, a renewable energy guarantee of origin certificate, or the REGO, a new form of personal property which can be traded, retired and used to support claims about the use of renewable electricity, largely replacing the Renewable Energy Target scheme from 2030. The bill also empowers the minister to make rules and administer the scheme, establishes the Clean Energy Regulator as the administrator and regulator of the scheme and provides the Clean Energy Regulator with associated mandates and powers.

Beyond this, however, much of the detail for the Guarantee of Origin scheme for different products will be set out in subordinate legislation, including rules made for the administration of the scheme and the methodology determinations. While it's appropriate that highly technical elements be housed in subordinate legislation, it's difficult to properly scrutinise the scheme given so much detail is left to later codes and regulations. This was explicitly noted by the Scrutiny of Bills Committee, which stated:

A number of provisions in the Future Made in Australia (Guarantee of Origin) Bill 2024 (the main bill) seek to allow for the rules, made for the purpose of the main bill, to determine or provide various matters that are relevant to the Guarantee of Origin scheme that the bill seeks to establish.

The committee went on to say:

Where a bill includes matters in delegated legislation, the committee expects the explanatory memorandum to the bill to address why it is appropriate to include the relevant matters in delegated legislation…

Yet in this instance the explanatory memorandum does not provide a justification for why this is appropriate for inclusion in delegated legislation rather than in the primary legislation.

Many stakeholders who contributed to the inquiry by the Senate Environment and Communications Legislation Committee on the Future Made in Australia (Guarantee of Origin) Bill 2024 and related bills submitted that it was essential there is a genuine consultation and opportunity for feedback on design features, noting that the detailed methodology underpinning the scheme should be released and consulted on properly. I agree with many of the submitters to the bill's inquiry who called for the timely passage of the legislation for the renewable electricity and product guarantee certification, balanced with proper scrutiny and consultation. It's important that the rules and methodologies underpinning the scheme are prioritised and finalised in a timely manner to ensure the scheme can commence as soon as possible. But it is equally important that they are available for proper public consultation so that industry and other stakeholders can provide feedback on the scheme's detailed operational elements.

To the product guarantee of origin certificate specifically: these certificates will track and verify the carbon intensity and other key attributes of products throughout the product's entire life cycle. This will include information on emissions associated with the supply of raw materials, production, storage and transport to the point of consumption or international departure. However, currently the legislation makes no mention of offsets or Australian carbon credit units. While the consistent position of the government has been to exclude offsets from the calculation of the embedded emissions of a product, under the GO scheme their use is not explicitly excluded in the legislation.

A number of experts, including the Australian National University's Zero Carbon Energy for the Asia-Pacific Initiative, have recommended including an explicit statement in the primary legislation that offsets cannot and will not be allowed to be used to lower product-embedded emissions in the PGO. They have warned that enabling offsets in the Guarantee of Origin scheme would compromise the scheme's integrity, facilitate greenwashing and potentially undermine the interoperability with international schemes and markets. While I don't believe it's the government's intention to allow offsets to be used for this purpose, I do believe the exclusion of offsets should be made explicit in the primary legislation to guard against potential future backsliding on this really important design feature.

I thank the assistant minister for his constructive engagement on this issue and welcome the government's amendments to this effect. It's particularly pertinent given the history of this scheme. Consideration of a hydrogen certification scheme first emerged as a key government action under the National Hydrogen Strategy under the last government in 2019. Back then much of the talk was around clean hydrogen, a misleading term that grouped green hydrogen, which is produced using electrolysis and zero-emissions electricity and does not create greenhouse gas emissions, with hydrogen, which used fossil fuel stocks—these do cause emissions—combined with unproven and unsuccessful carbon capture and storage.

The coalition has recently reiterated this in the coalition senators' dissenting report to the inquiry into this bill. There they stated that the Guarantee of Origin scheme's original intent under the then coalition government was to:

… cover a variety of ways in which clean hydrogen could be produced, including from renewable sources and from methods using gas or coal with substantial carbon capture and storage.

It's not unreasonable then to assume that a future coalition government might seek to use this scheme to facilitate greenwashing-polluting industries.

I now want to turn to the renewable energy Guarantee of Origin certificates. These REGO certificates will certify that the electricity linked to them is verified as renewable. They will be tradable, will enable the holder to claim the benefits of renewable electricity use and will offer detailed information about the generation and delivery of electricity, including the facility age, fuel source, time of generation and facility location. They are intended to operate alongside the existing large-scale generation certificates under the current renewable energy target until this system is phased out in 2030, after which they will function as the primary certification method for green electricity. This is widely welcomed.

The renewable energy target has successfully accelerated investment in new renewable supply, but continued investment in renewable generation is needed post-2023 in order to reach net zero. Continuity of a renewable energy certification scheme is essential so those investing have policy certainty. At the same time, expectations are changing as to which renewable energy attributes a certificate should contain, making it an opportune time to shift to a modern certification scheme. However, this shift has raised the controversial issue of how to deal with pre-1997 renewable generation capacity—specifically, whether those projects should be able to generate certificates or not. Ultimately, this issue goes to the purpose of the renewable electricity element of the Guarantee of Origin, and there are differing views as to what that purpose is.

If the purpose of the REGO scheme is to purely meet information needs for energy buyers and their stakeholders, then it would make sense to include all generation capacity. However, if the purpose of the scheme is to incentivise new renewable investments, as the current renewable energy target does, then it would make sense to exclude older capacity. Below-baseline certification inclusions in the REGO scheme would be a departure from the large-scale generation certificate scheme, which deliberately excluded old hydro and biomass projects built prior to 1997 because they didn't add to the renewable energy supply.

The result of this policy change would be a massive gain to two government-owned firms, Hydro Tasmania and Snowy Hydro, for projects that were built decades ago. In fact, the Smart Energy Council estimates that the windfall gain for old hydro and old biomass projects at 2023 large-scale generation certificate prices is approximately $200 million. This has raised concerns that allowing access to below-baseline generation may place downward pressure on the LGC price and may negatively impact the investment case for new projects. I know the government has considered this issue in detail and has responded in part, but, while the bill provides for rules to be created which could restrict the surrender of these certificates to new emissions-intensive trade-exposed entities, given the complexity of this issue and the ramifications of this policy decision, I believe the government's position should be made clear in the primary legislation.

In summary, the Guarantee of Origin scheme could play a really important role in Australia's energy transition and create an enduring renewables certification framework to empower the purchaser to purchase green energy, with the inclusion of energy attributes giving customers choice about the type of certificate they want to purchase. It's a welcome move—one supported by my community of North Sydney. But, to get it right and ensure the scheme is not used to facilitate greenwashing, it is critical there is proper scrutiny of the rules and regulations that will govern the operation of the Guarantee of Origin scheme. While it's appropriate for highly technical matters to be included in delegated legislation, I urge the government to ensure proper and detailed consultation on the rules and methodologies underpinning this scheme, to explicitly rule out the use of offsets and to make clear the government position on below-baseline credits within the primary legislation.

Barnaby Joyce (New England, National Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I think I come to this debate with some credentials, having worked on country-of-origin labelling, which was fought for over a long period of time whilst I was the leader and deputy leader of the National Party and then the former Minister for Agriculture, as part of a coalition agreement with the Liberal Party. That's part of the reason we brought it forward and managed to get it through. It was a bit of a battle at the time, and final negotiations were between myself and the former member for Groom, Ian Macfarlane. Every time you pick up a can of goods and see the triangle with the kangaroo in it and the bar graph below, I get a great sense of pride, because I can say I had very much to do with that. In fact, it will be a notation, when I leave here, in my memoirs of something I did. If I forget about the time I was in parliament, I'll go buy a can of beans and see what's on it!

That was just a statement of fact about exactly where something came from. If you actually want to make things in Australia, then you've got to be completely honest with how it comes about. You have three basic components. One is the raw materials, like gas, iron, coal and iron ore, that go into it. They're sold on the global market, and they come at global prices. There are no real tricks to them. That is what it is. Then you've got labour costs, for which you're at a distinct disadvantage to places such as Bangladesh, China or India, and nobody is suggesting we match them in labour costs. That is not what the great joy and blessing of living in Australia is about. It's about having quality of life in an egalitarian nation where you have equal opportunity to get ahead. The third part is incredibly important: it's the price of energy. That used to be our strategic advantage. That was how we did it. We had some of the cheapest energy in the world.

Other issues have come to the fore and take primacy over that. Other issues are now apparently more important than having the cheapest energy. We no longer have the cheapest energy, and there's no prospect of us ever having the cheapest energy again under the current party. The best way to ameliorate it is nuclear, and I'll get to that in a second. We have to be the adults and understand what we are doing. You can have all the modelling from here to gazoo, from the CSIRO, AEMO and whoever you want. But the trick in accountancy—these are the former sins of an accountant—is, as we used to say, to get in the helicopter of reality and fly above your papers, look down on them and see if they make sense. When you fly above the reality of our energy grid, we had a direct correlation between the increase in 'intermittents' and something else. They are not renewables, and that is a sort of benevolent nomenclature and a very good trick—to call it something it's not to make you feel good about it. They are not renewables. They are intermittent power. The places they are procured from are intermittent power precincts. They are certainly not farms. Farms grow spuds, beef, carrots and marvellous things like that. They do not grow steel towers. That is not a farm; that is an intermittent power precinct. That is an industrial area.

But, as we increase our draw on intermittent power, the price of power, unsurprisingly, keeps going up. In fact, last year it would have gone up by 30 per cent. I know the government gave some of the taxpayers back their money—temporarily—but it still went up, and there's nothing that's saying it's going to change. It is so astounding that we live in this pixie world—this absolute alternative universe. Last night I saw people earnestly look down the barrel of the camera and say: 'The way we're going to deal with our power crisis is to turn the power off. Turn off your air-conditioners. Don't have them on. Don't be cool.' It's almost a cry: 'You can't be cool, if you want intermittent power.' That's just a sign of abject failure.

My area is one of the poorer electorates. People can no longer afford to live. 'You can heat or you can eat,' as the saying goes. In winter, they can't afford the power bill to stay warm. In summer, they can't afford the power bill to stay cool. So they move out of the house. You do get people living in their car. This is not Australia. This is not the Australia we're supposed to have created. We've created an area where we've made the poor poorer, and we do it because we say, 'There's some virtue in it.' The Australian teachers federation says, 'It's virtuous to do this.' It's not. It's garbage. It's cruel, and it has to change.

When it comes to manufacturing, no-one is going to come here and set up a factory if you can't even keep your air conditioner on. No-one is going to take you seriously if you've got the highest power prices in the world. No-one's even going to look at you. You can have all the bills you want, but, until you decide to get the fundamentals right, it's just a narrative. It's just rhetoric. The people who can judge whether or not you can make something in Australia, naturally, are the major global manufacturers: Krups, Siemens, Microsoft, Hitachi, Mitsubishi, General Motors, General Electric, Rolls-Royce, Boeing, Airbus, Embraer from Brazil, and more. They'll determine whether or not you can make something in Australia. They've made a choice: the answer's no. If they thought that we were on the correct path, if they truly thought that we had it worked out—they're not dumb—they'd be lined up. They'd be saying: 'Quick! Go buy some industrial area, because we're going to set up a factory. Australians are geniuses! They've done it! They're power alchemists. They've finally done it! We're all going to go to Australia.' No major manufacturer is coming. They might be selling their products here, but they're not moving here. They might even assemble them here, but they're not moving here. They're not making them here.

Take the swindle factories—your intermittent power precincts. Why do I call them 'swindle factories'? It's because even things like the capacity investment scheme get a return despite the power that they don't produce. That's bizarre, and it's secret. It's commercial-in-confidence—a rolled-gold, taxpayer-backed government annuity for no real purpose but to make rolled-gold billionaires richer. That's what it does. Yet they've got you on a string because they say, 'If you don't support my right to provide a vital and essential product—only for me, the private person; not from the government—you can only buy my product at my price.' That's called a monopoly, and that's why they make so much money out of you. We sit back and say, 'That's okay,' because we know that, if we don't do that, the children will instantaneously combust. They guilt trip you into it. You've got to step back from them and say: 'Look, my position on climate change—for or against it—is irrelevant. My position on whether you are ripping us off is incredibly important.' If it's so virtuous, then it should come at a virtuous price, and it's not. The taxpayer is paying for this garbage by underwriting it, and then the pensioner in the weatherboard and iron is paying for it when it arrives there.

It affects the price of groceries. For the essential manufacturer, it must happen domestically. So the price of your groceries goes through the roof, your power bill goes through the roof and, because other people are saying, 'How do I get a return to maintain my lifestyle?', rents go up and then builders—we have builders going at home at the moment—say, 'Well, mate, the price of products is going up, so the price of your house is going up. It is no longer 1,300 bucks per square metre or 1,600 bucks per square metre; we are now talking about $2,000-plus per square metre.' The extension of the new house costs more, so guess what you have to do? You need to charge more rent to pay for it.

We sit back here living in this alternate universe because we don't pay for that. We don't pay for the power. As an accountant, I get a bill for that. As an accountant, I get a bill for my staff. As an accountant, I get a bill for my car. As an accountant I get a bill for fuel and my phone, but not here. There is this disconnect of the actual realities of what happens in people's lives. You have this aura, you have this protection, you have this life ring on that, unless you are really focus, disconnects you from the reality of the person in the weatherboard and iron and the pensioner who can't pay their power bill.

Going back to making things in Australia, if they can't afford to live, how do you think a smart organisation with rooms full of cost accountants are going to ever make any decision? When you make a decision in a big corporation, you have to get it across the board. It is called a capex proposal—a capital expenditure proposal—and there is a lot of work in it. If it is small, you have discretion and you can basically approve it yourself. At a certain level, it has to go to your branch line manager, but, if it is big, it goes to the board, and you have got to muscle it through the board. I was a very small-wheel cost accountant in a very big organisation called Conagra, a big American multinational in big food production. Big decisions had to go to Chicago and go through the board. These were small bald men who could make grown men run and cry. They were rather tough. You are not going to get anything through a board if it does not stack up and as a return to the shareholder—nothing. You have to actually put a proposal of the cost of energy at the time and going forward. You can try and hedge it. Sometimes for big things such as fuel, you can take hedging contracts out through Singapore but you would have to be buying diesel in megalitres. They look at Australia and go, 'Apparently they are going to do it with windmills and solar panels that are made in China—they can't even make them themselves.' We had one person who tried to make wind turbines but they have gone broke. They were in Tasmania. It is ridiculous. The people who make them for us use coal-fired power.

This nation has to become as powerful as possible in the full sense of that word as quickly as possible. With the rise of totalitarianism, the rise of China, the waning of democracies globally, yes, we have a duty to try broaden our economy is make it strong because the time is coming quicker and quicker when we will have to more and more stand on our own two feet. We have to be aware.

We want the United States of America to be strong, we really do, but they have got to the inversion point where their interest bill will be higher than their defence bill. We have to read the tea leaves for our children about what could possibly be coming their way. Yes, I want us to become as powerful as possible as quickly as possible and, yes, I want us to have a manufacturing sector. In the past—to be honest, it is all over now—I raised a very good argument at the time about why we shouldn't close down our car industry. I was derided, with people saying, 'Do you think this thing will make tanks if we get into strife?' And I said, 'Absolutely, 100 per cent, that is precisely what I think it is going to do.' But those days are gone. If we want to bring them back, we must become adults and flood the market with baseload energy.

Energy is like physics. It doesn't matter what you think of me, or your views. It is just physics. It goes out a little bit below 50 hertz. If it does not go out a bit under 50 hertz then it does not work. It is like arguing against gravity—9.9 metres per second. That is how it works; you have to get baseload onto the grid. We used to use it with the spinning capacity of coal-fired power.

If you want to do a proper analysis—I know the analysis they throw around; I had the CSIRO in my office the other day. You have to have a more fulsome analysis of everything, a complete system analysis, which, to be quite frank, would show that the cheapest form of power would be to the refurbish coal-fired power stations. Nobody disagrees that that; that's how you do the cheapest form. But, if we're going to go down the path of zero emissions, if that's the goal, if that's the grand nirvana, then you've got to have 24/7 spinning capacity at zero emissions, and the only way you're going to get that is with a different rock boiling steam to turn a turbine. We used to use a black rock called coal; now we're going to have to use a different rock called uranium. There are no other tricks to this.

The only other nation on earth, serious manufacturing nation, that's neither got nuclear power nor imports it via a transmission line from a nation that does is New Zealand. That's it. Even Ghana and Bangladesh are going down the path of developing a nuclear industry. Kenya, Uganda, Laos, Vietnam are all going there, and we're going to go there too; Australia is going to go there too. It's just a matter of time. We can get there now and be the smart ones developing it, or we can buy it like we've bought everything else from overseas at a later stage. That's what you're going to end up doing. You won't even be manufacturing your own small modular reactors. You'll be importing that with your car, your fuel and every other cursed thing that you need in your life in Australia!

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

News outlets are presently reporting power outages impacting thousands of residents in Wagga Wagga. And it's not just at that large inland city in southern New South Wales; it is also Henty, Holbrook, Rand, Culcairn, south of the largest inland city in the state. Thousands of houses in Wagga Wagga are without power as the oppressive heat wave continues to grip parts of New South Wales: that's what the media reports are suggesting. Reports of a blackout were first recorded at about 5.30 am on Wednesday, today, affecting more than 6,000 customers. They are Essential Energy customers.

The fact is at the moment in Wagga Wagga it is 21 Celsius. The fact is there hasn't been a heatwave, as suggested by the media outlets. The fact is it is the second power outage that the city has experienced just in recent weeks. We had a storm go through there several days ago and knock the power out for many of the homes and many of the businesses—not anywhere near half the homes or businesses, I might add, but many thousands of people were affected.

This is the thin edge of the wedge. If you can have a storm but not a huge storm, if you can have hotter weather but not a heatwave affecting power like this, then what is going to happen when we have a real storm or, indeed, when the weather reaches temperatures, as it normally does in Wagga Wagga, of the old 100 Fahrenheit, the old century mark of 38 degrees Celsius? That will come in summer, in December, January through February. That's how hot it gets in Wagga Wagga.

I remember some years ago suggesting that nobody will really worry too much about blackouts. And we'd had some dreadful blackouts in Adelaide, with thousands upon thousands of South Australia's affected. I said, 'Well, people won't really get all that worried until one of the day-nighters at one of the major cricket grounds is cast into pitch blackness,' and I was mocked. I was derided by the media. And do you know what? It was only a week or so later when that's exactly what happened.

Heaven help us if we do have to power shed this summer, as we will, and Tomago, our largest electricity user, is forced to shut down, forcing people off duty. It is a real worry. If you can't have reasonable, cost-effective power, how on earth are you going to have a future made in Australia manufacturing? I'm all for making things in Australia and ensuring we have manufacturing jobs and factories producing things in Australia, but there is so much folly about this bill. The purpose of this package of three bills is to initiate a guarantee of origin scheme to track and verify emissions connected with products made in Australia. Further, it provides a mechanism for renewable electricity certification. That should send a shiver down many people's spines. The framework of the Guarantee of Origin scheme aims to 'transparently'—note that I say that word rather facetiously—determine where a product came from, how it was made and what its total emissions were. It will initially cover hydrogen and renewable electricity but will expand over time to cover other products.

The bills will also establish the renewable electricity Guarantee of Origin certification mechanism, to acknowledge the renewable energy component of the electricity used in a production process. I don't know about others, but I think we're treading into very dangerous territory, and I'll tell you why. These bills fail to be technology agnostic, and everything that we've said and done as a coalition when it comes to energy has included the word 'balance'. We've always said that we need to have a correct and proper balance. Renewables are fine, but this rush to renewables by the Labor government puts at risk jobs, costs and, indeed, our ability to produce things—to make things in Australia. It puts at risk our farmers. It puts at risk our ability to grow food and fibre.

The bills also show bias against hydro in favour of wind and solar. The Snowy hydroelectricity scheme, which is in the Snowy Valleys—soon to be incorporated again into the Riverina electorate—was built, to begin with, to be not only a hydroelectricity scheme but also an irrigation scheme for the Murrumbidgee Irrigation Area and, later on, for the Coleambally Irrigation Area, which utilised that life-giving product called water that Samuel McCaughey pioneered for that particular region in the late 19th century.

When John Oxley the explorer went through the area now known as the Murrumbidgee Irrigation Area, that Garden of Eden, he described it as land that no-one would ever want to inhabit. It was a veritable desert, and he described it thus. What those irrigation pioneers did—the likes of Sir Samuel and those World War I veterans who were sent there and given a small plot—was turn that desert into a food-producing area. Now we have a government that wants to not only bring in bills such as this but also buy all the productive water out of the system, such that our farmers—some of them debt stressed—have a distorted water market. And once that water goes out of the valley, it very rarely comes back. At the behest of the Greens, who hold Labor by the nose and pull them along, all that productive water is sent out of the mouth of the Murray and out to sea and, thence, it can't be used.

If we're going to have a future made in Australia, the first thing we should be growing is food, not just for our people but for many other nations besides. Our food is the best. Our food is the cleanest. Our food is the greenest. I could have replaced the word 'food' with 'farmers' in every one of those sentences, because our farmers are the best stewards of the environment in the world and they do grow the best, the freshest, the cleanest and the greenest food, and whether that's at Shepparton or in the fine state of Tasmania, or in Queensland or New South Wales, right across this nation our farmers are champions. These bills don't align with the efforts that our farmers go to to produce that food—a future made in Australia.

Speaking of alignment, these bills also do not align with overseas schemes. Whilst alignment with international geoschemes has been a recognised priority of industry, apparently, the preclusion of technologies such as blue hydrogen using gas with carbon capture and storage puts Australia's scheme at odds with similar schemes being established in the European Union and the United Kingdom.

But do you think Labor cares? Do you think Labor worries about those concerns that I and others have with these bills?

It's also a great risk for Australia, putting a trojan horse for a broader, economy-wide, carbon price. We all remember what happened when, in late 2010, the then Prime Minister said, 'There will be no carbon price,' or carbon tax, 'under a government I lead,' and that was perhaps right then. But then of course we had Bob Brown as the Greens leader—and I will say one thing about Bob Brown: he was an environmentalist, first and foremost and probably only. These days, the member for Melbourne and the member for Griffith and all the other Greens cabal from that Greens political party are not environmentalists. They want to just change society for the worse. They want to tear down traditions. They want to strip away all the things that have made this country great—but I digress.

Then Prime Minister Gillard held a press conference, in that unholy Greens-Labor alliance, and placed a price on carbon. And we know what happened after that.

That said, what we see here is a scheme intended to initially cover hydrogen. The government's plan will expand it over time, and the devil will be in that detail. That's what you have to worry about, because it's not what is in the bill per se, as it stands now; it's what a future Labor government, and a Greens-teals-crossbench—and who knows what parties they'll gather together if need be—will do in the future.

It bears little resemblance to the policy of the former coalition government. The coalition's approach was technology-agnostic. The coalition's approach was balanced. The coalition's approach was practical and sensible. It understood and took on board what stakeholders said or suggested should happen.

We do need a future made in Australia, and I'm not so blind as to say that we shouldn't take on board green energy suggestions. I met with Helen Philippidis, the Manager of Corporate Affairs at the Australian Gas Infrastructure Group, just on Monday. This group is one of the largest infrastructure businesses in Australia, with assets valued at more than $9½ billion. They're suggesting a considerable project in the industrial hub at Wagga Wagga, and, by the looks of it, this project will provide a 10-megawatt hydrogen electrolyser that will blend up to 10 per cent renewable hydrogen into the local network. We have to look at these things, seriously, and we have to take them on board for the effort and the investment that are being put in. I know that the project is also intended to work in conjunction with an anaerobic digester to be built. I know what they're doing just outside Parkes, with converting waste into energy. These are good and sensible ideas. The project at Parkes is taking on board what they're doing at Kwinana as well, over in the west. These are good and sensible projects, and people are happy to back them. But this particular bill and this package of bills are not good.

What also worries me is that so many of the energy projects in and around my area, these huge solar farms, are taking up valuable prime agricultural land. You've only got a certain amount of farmland, and, once it's taken, it's decades before you potentially get it back, and then who knows what leaching will be in the soil anyway? But what happens is that they're considered significant state priority projects, and the New South Wales government comes in and just rides roughshod over local people—local residents, local ratepayers and local councils, be they shire or city councils. In either case, they are people elected by locals to do the job for them. They don't get a say, because the state government says, 'Oh, no, this is a state significant project.' Some of the projects are as small as $5 million, yet, because they're considered state significant, Macquarie Street just rides roughshod over the local council and over local people. It's just not right. It's just undemocratic. We live in Australia in 2024. We should be far better than that.

Yes, we do need a future made in Australia. We do need the factories and the farms to be operating as efficiently and as smoothly as possible. We don't need them to have to continue to pay huge power bills. What is happening at Wagga Wagga and elsewhere in southern New South Wales today, with the tripping, the outages and the power blackouts, is just, as I said, the thin end of the wedge. I hate to think what's going to happen during the rest of the summer if a small electrical storm or a little bit of hot weather can knock out the power like that.

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

I too rise to speak on the Future Made in Australia (Guarantee of Origin) Bill 2024. When I spoke on other bills in relation to this, such as the Future Made in Australia Bill, I began—I'd like to remind people of this—with a tour of the industrial part of Shepparton, the main city in the region that I have the great honour of representing, and I talked about driving around. If I could take people on a virtual tour, we'd be driving down Old Dookie Road and New Dookie Road, and we'd turn right and see Noumi, a brand-new manufacturing facility that takes a huge amount of milk from the dairy farmers in the immediate area, who work so hard to produce that milk and invest so much of their capital and are hoping to have enough irrigation water to be able to grow the feed for those cows. That milk comes into Noumi, and Noumi turns that into UHT products. A lot is for the domestic market, but a lot of it gets exported. It's a heat process that turns that milk into something that can be exported. I've been to China. I've been to a supermarket in Shanghai where I've seen that product on the shelf being sold for quite a large amount of money.

You can turn around then, and you'll see SPC, now called SPC Global, which is an iconic food manufacturer. Every time I talk about SPC in this place, I renew my invitation to everyone in this place: if you want some SPC peaches, they're in my office, so just go and help yourself, please. Member for Swan, you're also welcome to come and do the SPC taste challenge. You do a blind tasting of the SPC processed fruit and the Chinese import, and then you'll see how good made in Australia really tastes if we look after those industries.

Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Link to this | Hansard source

I'll come to your office.

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

Yes, I look forward to that. SPC's had an interesting history. Fruit processing is not what it was, because we're a lot better at getting the fresh products onto the table now than we used to be, so people don't have as many processed fruit products as they used to, but there's still a market there. They also have tomato manufacturing. Again, that's a heat process.

J Furphy & Sons manufacture tanks and have been doing so since the late 1800s. Nowadays, those tanks are high-tech stainless steel engineered tanks for the beer, wine and milk industries and all sorts of other things, but when they started out in the late 1800s and early 1900s they were making water tanks, and those water tanks went over with our diggers to World War I, in the field. The diggers would all stand around the Furphy water cart having a drink and exchanging gossip and rumours, and that's where the term 'furphy' comes from. I think there are a few furphies told in this place, more this term than previously—anyway, I digress.

Rubicon has manufactured great things in irrigation technology. We have a company called Pental, which manufactures a lot of chemical products. White King is a brand. Campbell's Soup gets a lot of vegetable products from around the area and manufactures them in Shepparton into processed food products. There's another one called MC Pipes. MC Pipes is a manufacturer of large, concrete pipes for housing developments—crucial.

We sit in here and we talk about housing. We fire across these missives to each other on housing, and the Greens do their thing on housing. But, if we're going to increase supply, we've got to make sure that everything that goes into a new housing development is manufactured at an effective cost. Just one of those things, which is manufactured in my electorate, is the big stormwater drainpipes. We've got to make sure that those companies have a future made in Australia if we are going to look after them.

The reason I mention all of those businesses in my electorate of Nicholls is that I talk to them often. What they need is cheap and reliable energy. The cheap and reliable energy in Victoria has come—and will probably come for a bit longer—in the form of burning brown coal in Gippsland, and that's what we did. In other parts of Australia, we burn a higher quality coal to create cheap baseload dispatchable energy. We did that for a long time because we had it and it was cheap, and we'll probably still do it for a while. The reason we didn't look to technology such as nuclear, when every other country was, is that we thought we could keep burning this coal into the future. But climate change and the challenges associated with that have led us, and many around the world, to say that we have to eventually get out of fossil fuels at the rate that we're burning them at the moment. I accept that.

When I came into this place, in my maiden speech, I said that climate change is a big challenge and, to stop some temperature rises that would cause some real challenges for us in the future, we need to act with the globe. But what I also said was that how we act is critical because, if we get it wrong with unrealistic timelines and we have an ideological approach to technologies that feel good or we might think are the right technologies, then we could really stuff up Australia's economy. We might see businesses, like the ones I have just talked about in my electorate, move offshore because they can't get cheap and reliable energy in Australia and so they'll go and find cheap and reliable energy somewhere else. Global emissions won't have changed. It won't have the slightest effect on the climate change challenges that the globe faces, but what it will have a big effect on is Australia's ability to manufacture.

The reason we are so worried about this bill is that it's got that ideology: 'We feel good about this technology, so we're going to put all the eggs into that basket.' Green hydrogen is just one of those things. When the former coalition government began this sort of scheme, the program was originally designed to certify and track the emissions intensity associated with hydrogen production, allowing buyers, both domestic and international, to verify the green credentials of energy sources that would feed into the production processes for hydrogen. But Labor seems to have hijacked this policy principle. This scheme, and the reason we've got so many problems with it, is that it's not technologically agnostic. It favours some forms of renewables—wind and solar—over others, like hydro. It could become a mechanism for a broader economy-wide carbon price. The member for Riverina outlined the history of that. He's been in this place a lot longer than I have, and he talked about some of the challenges with that.

Again, this bill is about that ideological 'this technology feels right so we're going to back it' approach to our energy transition. But scientific knowledge and the analysis of what is viable moves really fast. I dare say it moves a lot faster than governments and parliaments, so this picking winners idea where governments think, 'This is the way to go; we're going to pick this winner,' is problematic. Picking winners is problematic at any time. I went to Derby day and tried to pick some winners, but I had no success. But the next day at Mornington I did a lot better and my wallet was a bit fuller. I don't bet much, but I have a flutter around the Spring Racing Carnival. But what Labor are doing is going to the races and saying, 'We're going to put all our money on this horse,' and that's what I worry about, especially when there are so many options around the world.

I'm really happy that this debate is happening because it didn't previously. But I wish it was a bit more of a sensible debate in this place about nuclear energy. It's one of the tools that can help get us to a cleaner energy future and make sure that we have the baseload power for a genuine future made in Australia. We are up against countries that are using this technology to power their factories, to make sure their factories have got enough electricity.

When I came into this place and talked about climate change, I said we have to use all the technologies in the world to be able to approach this big challenge of how do we have a future made in Australia when we can't burn coal anymore? You look around the world and you say—and I did. I went to Europe last year. I was looking at education, but I asked everyone, 'What are you doing about making sure that your industry has enough energy to continue?'

In Sweden they said: 'We don't talk about renewables anymore. We don't say we have a renewable future. We say we have a low-emissions future.' They've commissioned new reactors. Finland is fascinating because the Finnish Green League are interested in reducing carbon emissions. They're not interested in having this fight about what sorts of technologies we use, they're just interested in reducing carbon emissions for the benefit of the planet. So the Green League in Finland are supportive of nuclear energy because they think that's a good way for them to get there. Germany is ruing relying too much on renewables and piped gas from Russia. France is very pleased that it has gone down the path where 70 per cent of their energy is from nuclear. Canada is moving towards nuclear. The United States is moving further into nuclear.

One of the most powerful things that was said to me—this goes back to the very ideology of this bill, which is the picking winners thing—is that we don't know what's going to be a winner. Everyone thought green hydrogen was going to be a big winner a year or two ago and now we're seeing it may not be the big winner that it looked like it was going to be. Companies are pulling out of green hydrogen. Now, it might come back. Someone might find a way to make green hydrogen work, and I hope so. But if it doesn't and the government has put all of its eggs in that basket, then I really worry about where we're going to be.

But what was said to me by an expert in energy and energy systems—at the moment nuclear fission is good and it's a technology we should be heading down. The best time to start was yesterday, but if you didn't start yesterday then you have to start now. But he said: 'What if fission works? What if nuclear fission becomes the technology that really takes off?' It's not there at the moment. It's not there yet.

Pat Conroy (Shortland, Australian Labor Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Do you mean 'fusion'?

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

Fusion, sorry. Thank you. I appreciate that. What if fusion takes off where fission hasn't and we're not even in the fission game? Every other country will have a massive advantage in getting into nuclear fusion because they are already in fission. I'm not enough of an expert to know whether fusion is going to be the future, but the concept of Australia keeping all of its options open for all the technologies that are out there is really important.

What this bill does is put all our eggs in one basket. It's very focused on green hydrogen and it's very focused on some other things. Like a lot of the government's investments, it's very ideologically narrowly focused. I worry that, if some of those things don't take off or if technology goes off in a way that we didn't predict, we are not going to be in the game globally. That's frightening for Australia and it's frightening for the people of the Goulburn Valley. If those businesses that I started out with in this address leave our shores, there'll be a lot of people in my electorate who won't have jobs anymore. If those people don't have jobs, they won't have money. Their living standards will go back even further than they have done. So we really have to focus on making sure we protect Australia's manufacturing future, and this bill is not it.

James Stevens (Sturt, Liberal Party, Shadow Assistant Minister for Government Waste Reduction) Share this | Link to this | Hansard source

I would like to start by commending my colleague the member for Nicholls, who has made an exceptional contribution on this bill, the Future Made in Australia (Guarantee of Origin) Bill 2024. In fact, I fear I am at risk of repeating many of his fine arguments in my own contribution. I rise to speak in favour of the member for Fairfax's second reading amendment. As has been made very clear, we in the coalition do not support this Labor version of the guarantee of origin. When we were in government, we had a very different scheme that we hoped to be supporting through this parliament, but, regrettably, what has been brought forward by the government is vastly different to what we intended to do when we were in government. That is regrettable because a proper guarantee-of-origin scheme would be an excellent thing for this country. What is being proposed in this bill is a lost opportunity to give that certainty and that opportunity to so many industries that would be looking for the system that we intended to legislate for.

I would like to start by giving a shoutout to the HILT CRC, coordinated by the University of Adelaide. I have had a lot to do with them over the years. I met with them when they were applying for and, happily, were successful under the previous government through the CRC funds at getting support. 'HILT CRC' stands for the Heavy Industry Low-carbon Transition Cooperative Research Centre. They are doing work on trying to crack some of the challenges that are in place when it comes to industrial chemistry and commercially viable technology to undertake some of those very high-emitting heavy industry processes.

We know that getting the energy that's generated and zapped down the transmission lines of this country to net zero through zero emissions technology is nowhere near enough to address the totality of emissions. One of the big ones that's probably got one of the most challenges is those industrial processes and heavy industries that emit a lot. It is very difficult to replicate those processes from the 240-volt power connections. I think this figure is still accurate, but it's certainly been the case for a long period of time that seven per cent of total emissions comes from steel alone. I think cement is about five per cent. The really important industries for the planet but particularly our country like steel, cement and aluminium at the moment are high in emissions. We have to come up with commercially viable solutions to address how they can become carbon neutral.

In my home state of South Australia, the state government are putting a large amount of state government funds into building a hydrogen plant in the iron triangle. I wish them well, but there are some very concerning early signs about how that project is tracking and where it is going to end up, particularly from a cost point of view and whether or not the markets that were believed to potentially be accessible to that plant once it is constructed will exist in the form that was envisaged by Labor when they developed this scheme. It now seems that the timelines that were promised—they can't be concealed from the public; you know if you are or are not successfully building a hydrogen electrolyser plant—on that commitment are running dramatically late. But what isn't known in the public domain is just where the financial situation, the cost of that plant, has landed. Around half a billion dollars, I think, was initially earmarked by the Labor government in South Australia to build that plant.

I have deep concern and I think any reasonable observer would have deep concern that not only the delays to that but also the likely cost blowouts for building that plant seem likely to be quite significant. If they weren't, you would think there'd be a lot more transparency around what is happening with that project from the state government's point of view than there currently is. In fact there were attempts, I believe, to establish a select committee in the legislative council to look into that project, and they were blocked. So the transparency around what's happening there is extremely concerning. I think the dreams of what might be possible and when for hydrogen at that plant that the South Australian government is building are pretty well replicated across all of the hoped-for hydrogen developments across this country and really across the world.

There was a lot of early hype around what and where hydrogen might lead to, but regrettably a lot of boardrooms are making a lot of decisions to cancel a lot of investments in hydrogen projects and infrastructure around hydrogen because it seems to be that the sort of market that some believed might develop in a certain timeframe is not eventuating. Some of the major partners, particularly in Japan and South Korea, who seemed to be very enthusiastic around hydrogen produced in Australia for their markets, are not quite as enthusiastic as they have been in the past. Here we have before us a bill that we're discussing that could be very different to what the government's brought to us, and that's regrettable because the huge focus that they've got on green hydrogen through this is not panning out to have the same likelihood of significant success that some believed it would in previous years.

As the member for Fairfax points out in the amendment to the second reading, we have significant criticism around the fact that this is not a technology-agnostic proposal. We have obviously made a decision in the coalition that there is no prospect of getting to a 'net zero by 2050' circumstance in this country without nuclear—reliable base-load generation which is obviously also emissions free. As the member for Nicholls pointed out, as we see the retirement of coal generation, that reliable base-load generation which completely underpinned the industrial development of this country for many, many decades, we want to see that replaced by an equally reliable base-load generation, being nuclear power. Not only can nuclear be a huge part of generating electricity to go through our electricity market and power our homes and businesses but nuclear has enormous applications across the other elements and challenges of getting to net zero.

The heat produced from nuclear is a big opportunity for certain industrial processes. The heat that can be created out of nuclear is very superior to what you can create from three-phase electricity powered heat capability. Even with nuclear heat, there are heat requirements in certain industrial chemistry and certain heavy industries that not even nuclear can create, and those are challenges that need to be cracked. People like the HILT CRC are working on exactly that, because at the moment there is no real commercially viable non-carbon-emitting alternative.

That's why we recognise that there'll be some processes that will always emit carbon and we need to accommodate the need to offset emissions. Net zero isn't absolute zero. Net zero is net zero, and there will undoubtedly be processes in certain industrial transformations from which the emissions will need to be offset, because there's no solution other than continuing to undertake chemical reactions that release carbon. None of that is accommodated in this bill.

I have my friend the member for Braddon here; he is a proud Tasmanian. One of the most egregious things in this bill is that legacy hydropower generation capacity, which is resplendent throughout the great island of Tasmania, is for some bizarre reason excluded from being eligible for this scheme. Now, that surely is an oversight. I can't possibly imagine why hydropower is excluded. I concede that the government have got an ideological objection to nuclear, but I've not identified that they've got an ideological objection to hydropower—certainly not in the modern era. I know there was a time when dams in Tasmania had a degree of controversy, for different reasons to emissions reduction, but the fact that existing hydro-powered plants that have serviced Tasmania and, in fact, export that great clean energy across Bass Strait to Victoria are excluded from this scheme is just nonsensical. Hopefully that's something that the government recognises. If they're not prepared to consider other points, at least don't do this to the poor people of Tasmania.

Obviously, the other thing that we think is very odd and where we need as much international interoperability as possible—because getting to net zero is a global effort that is also going to involve a lot of cooperation and collaboration between economies—is that we've got a situation where our scheme doesn't align with the one that's been designed for the EU and the UK. So our Guarantee of Origin scheme, if it passes this parliament, won't be compatible with the schemes in the EU and the UK. That's greatly disappointing, because that's an enormous opportunity lost for Australian businesses that could see an export opportunity, potentially, if we had a scheme that was aligned with the EU and UK one and accredited to that. There would be businesses that would be operating under our scheme that would also have an opportunity to access markets in the EU and UK with that accreditation through our Guarantee of Origin scheme, if it were properly aligned with those overseas ones, and the proposal here from the government does not do that. So that, of course, concerns us.

Most importantly, we have a very credible concern that this is the beginning of creating something akin to the previous carbon tax regime that the Gillard government introduced, Certainly, this bill heads down that path. It provides a mechanism for putting a price on carbon again, and that is something that the Australian people have spoken very comprehensively on. Indeed, if the government believe that that would now be popular, they're very welcome to take that to an election and have it as their central campaign position. But to bring, through this legislation, a mechanism that could well open the government up to putting a price back on carbon by stealth again is something we bell the cat on very much in this debate. That is what the member for Fairfax is doing through the second reading amendment.

It is regrettable that this is a lost opportunity to have a bipartisan bill that would have been able to continue on from the work we did in our last term, would create something that would provide certainty for Australian industry and, of course, would be agnostic in relation to the great opportunities around technologies like nuclear that we look forward to presenting to the people of Australia at the upcoming election. It is very regrettable that, again, the government are not open to the people having their say on a matter like that through this legislation. So, indeed, I support the second reading amendment from the member for Fairfax. We don't support this bill for all the reasons outlined. I commend the member for Fairfax's amendment to the House.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

This is a very interesting bill, to say the least. I hate to disappoint listeners and members in this chamber, but I can't support it, because of the reasons I'll outline. The Future Made in Australia (Guarantee of Origin) Bill 2024 and associated bills are really quite extensive, but, on reading an analysis guided by the investigative powers of the Parliamentary Library, it has confirmed my worst fears. This is another renewable subsidy boondoggle.

We all know that the current renewable energy subsidy scheme will come to an end at the end of 2030. The hope then was that everyone would just be paid for electricity, not paid for generating large-scale renewable energy target-induced large-scale generation certificates, small-scale renewable energy schemes developing small-scale technology certificates, and energy efficiency certificates and energy savings certificates—at least in New South Wales, Victoria and the national electricity market.

There is a cost to all these certificates that we have in our system now. The value of these gets paid for by retail and wholesale customers. That's included in the price that people pay for their electricity. They sound really innocuous—large-scale generation certificates, small-scale technology certificates, energy efficiency and energy savings. They're all innocuous, but basically it's about $4 billion every year just to meet the 2024 targets. The LGCs from large-scale wind and solar are $1.6 billion. There are 33 million of these certificates floating around already. Similarly, the cost to retail customers of small-scale technology certificates to meet the 2024 target is $1.516 billion. The Victorian scheme is $788 million and the New South Wales Energy Savings Scheme is $108 million.

These LG and ST certificates will come to an end at the end of 2030, but this new Guarantee of Origin scheme is all about carbon emissions accounting and more certificate generation. The whole system is going to create registered holders of either a production certificate or a delivery or consumption profile, and they will generate PGO certificates for each batch—each one-megawatt hour—of green electricity that produces green hydrogen. This certificate will add a whole new level of complexity and will continue the current system onwards from 2031.

The industry can actually touch up the value of their certificates, and that is buried in the details. These certificates will then be labelled 'REGO' certificates, and after 2031 starts there will be the ability for them to be aggregated, so even small-scale renewable projects that are used to generate green hydrogen will be able to take part in this festival of a second line of payments behind the electricity or the renewable energy generation. The Guarantee of Origin scheme was originally planned for hydrogen, but it could be applied across the board in many other sectors.

We have had to have a moment of reality—both economic reality and reality about the amount of energy produced in hydrogen compared to the amount of energy that is invested and used up in generating the hydrogen. Legislators and regulators thought that, just by creating a parallel scheme to LGCs and STCs—that we are burdened with now—we would, all of a sudden, have an amazing huge hydrogen superpower in this country because everyone around the world will want to buy green hydrogen. But, around the world, renewable hydrogen projects are being jettisoned time and time again. The hard-nosed energy return on energy investment is really negative with hydrogen. In terms of electrolysis alone—which is what is planned to produce green hydrogen; there are people who are deadly serious about appropriating colour labels to hydrogen—the serious people who need hydrogen need an awful lot of it for rockets and missiles. And, if you do want to produce steel in a green way, you will need a massive increase in the amount of hydrogen to do that, rather than using coal and gas to produce steel.

There are 70 million tonnes, in the whole world, of hydrogen being produced as we speak. Seventy-six per cent of that comes from gas, and 23 per cent comes from coal. But, by 2050, the plan was to increase that to 287 metric tonnes, mainly in the green energy and the hydrogen superpower plans that this government has for Australia. It would have to be massively scaled-up, beyond anyone's rational comprehension. Around the world, we have, in total, only 5,000 kilometres of hydrogen pipelines that can actually take hydrogen gas and cryo-compressed liquid hydrogen. We would need three million kilometres of new pipes. You can't put that amount of hydrogen into gas pipelines or into gas turbines. There is a limit to how much hydrogen you can use. Also, to make hydrogen by electrolysis in these hydrogen hubs—which is the plan, using our renewable energy certificate makers—they will need nine litres of distilled fresh water to split with electrolysis and heat to make one kilo of hydrogen. In a country like Australia, to get pure hydrogen means either setting up a desalination plant and then a distillery filtration system or taking water out of our rivers that is already dedicated to growing food and providing water supply for cities. To get 287 metric tonnes of hydrogen would use prodigious amounts of water, which Australia doesn't have.

The hydrogen withdrawals around the world are falling like dominoes because everyone has gone with this promise of huge amounts of energy. They've been sold a policy position: 'We'll just change from gas and coal, and we'll make a lot of hydrogen.' These policies have been made by scientists, but they're political scientists. They're not necessarily hard-nosed chemical engineers or electrical power and gas and oil industry engineers who understand the scale of this project. That's why we've seen Fortescue Metals drop their plans. In the Financial Times, in America, in the financial pages, you'll see hydrogen projects meeting reality. But I'm concerned that we will continue on this path of thinking that this is actually achievable.

Australia does need a hydrogen industry because it's a very important industrial chemical, particularly if we're going to have missiles and rockets and things that are essential for our defence. We'll need a hydrogen source. We need it, but to think that we naively expect these plans to be reality is quite scary. In fact, Princeton University, Melbourne university and Queensland university, along with other energy groups, have analysed the cost of this green energy hydrogen superpower scenario, and it will mean 23,000 kilometres of new poles and wires and millions of acres for renewable energy projects, which will consume vast amounts of water. All these processes need to be constant to be efficient, but they will stop at night, on cloudy days or when the monsoons are coming and we have lows across all of Queensland and New South Wales.

To make hydrogen and then to make ammonia requires a huge amount of energy. We have to be realistic. You can have your grey hydrogen from methane—that's natural gas, and you get four molecules and one carbon. Or you can have blue hydrogen, which is splitting natural gas again—methane being split. This is called 'methane reforming'. You add on carbon capture and storage, which is a known technology. There are two ways to make it, but they're both energy intensive.

Could someone play the dark scary music again? Because we're going to talk about coal. There is a lot of hydrogen made from coal and it's called 'black' or 'brown'. Then there's pink hydrogen at the end. That's made by electrolysis of water, but the heat and the electricity are coming from a nuclear power plant that produces bountiful, constant energy at a reasonably low cost. I have visited hydrogen plants in Korea and Japan; the Standing Committee on Climate Change, Energy, Environment and Water did a tour. Korea and Japan have an amazing industrial capability, but their ambitions are being met by energy reality. They will invest billions and billions if they think it can be produced, but they're all coming to the same conclusion. We are in that situation here now.

I call all these schemes to everyone's attention. These new rego certificates will be traded like large-scale generation certificates, small-scale technology certificates and all these energy-efficiency and energy-saving schemes, which every electricity user pays for now. People have to realise that these green schemes are not free. They cost a lot on your electricity bill. The cost of the extra transmission in the system is also being subsidised separately by other policies. There's a huge grant allocation in the budget to help rewire the nation with a lot of grids that are totally unnecessary. They're there to supply a transmission vehicle for energy that is only going to be produced by a big solar farm for 24 per cent of the time, at best. If it's coming from a wind farm, either at sea or on land, it will be produced for an average of 34 per cent of the time over a year, at best. The rest of the time, they won't even have electricity in them, because they're plugged into these renewable megaprojects. Unless there is electricity being generated, which stops when it's cloudy or when it's night or when we have big rain events for days or weeks on end, it's just going to sit there. And all these grids get paid money for their capital costs. They have a fixed return on it.

Part of this renewable energy mania has involved New South Wales and Victoria, I'm told. The regulatory investment test was set by the regulatory system. Before a new grid could be built or upgraded, it had to go through the regulatory investment test. But that has been abandoned, so a lot of these grids are being approved without an economic basis.

But, again, guess what costs retail customers 42 to 45 per cent of their bill now? It's their grid costs. The energy-generating cost is actually one of the smaller parts of your bill. The cost at the power plant is one thing, but to get the power from the plant, which can be a wind farm, a solar farm or rooftop solar, involves a lot of grid costs. So this current plan is going to double or triple the costs—or quadruple them if they did the whole hydrogen superpower and green energy superpower plans. Our bills won't go up by just the 20 per cent planned for next year; it'll be multiples much greater than that. In fact, this whole value of certificates— (Time expired)

Julian Hill (Bruce, Australian Labor Party, Assistant Minister for Citizenship and Multicultural Affairs) Share this | Link to this | Hansard source

I move:

That the question be now put.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question before the House is that the question be put.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

For the clarity of all members, I will step through what has happened for the House. We moved a second reading amendment that was defeated on the voices. We then put the question about the second reading of the bill. The Manager of Opposition Business is seeking the call.

Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

by leave—There was confusion as to whether we were on the amendment or on the second reading question, that the bill be agreed to. We certainly want a division on that second reading. I move:

That the second reading of the bill be rescinded and the question on the second reading be put again.

Question agreed to.

Milton Dick (Speaker) Share this | Link to this | Hansard source

We will now deal with that issue. The question before the House is that the bill be read a second time.