Gas Code aiming to secure domestic gas supplies now law

The federal government’s Mandatory Gas Code of Conduct is now law, with the government aiming for the code to secure more gas at more reasonable prices for Australian gas users.

The government said in a statement that the code would ensure Australian gas is available for Australian users at reasonable prices, give producers the certainty they need to invest in supply, and help to ensure Australia remains a reliable trading partner.

The Code has been registered and will come into effect from today.

The government said producers had already offered indicative domestic supply commitments of at least 260 PJ to 2027.

“These indicative commitments reduce the risk of shortfalls as assessed by the ACCC and AEMO.”

The Code is a combination of:

• A price cap, which is to be set at $12/GJ and subject to a review commencing by 1 July 2025
• A process for qualifying for exemptions from the price cap on the basis of making satisfactory ACCC and court enforceable supply commitments
• And allowing small producers of gas to be exempt from the price cap if they supply only the domestic market.

In addition, the code requires all participants to abide by standards of conduct to level the playing field between users and producers and deliver a better functioning, more competitive gas market.

The Gas Code is supported by an enforcement regime through the ACCC, with a review to be undertaken no later than two years after coming into effect, to ensure the Gas Code remains effective and fit for purpose.

The government claims that coupled with action to cap coal costs for power generators, its’ actions nearly halved wholesale energy prices.