The Australian Government has implemented a mandatory Gas Code of Conduct, as part of the Energy Price Relief Plan announced in December 2022, to ensure that east coast gas users can contract for gas at reasonable prices and on reasonable terms.
The mandatory code is an important addition to Australia’s east coast gas market. Key elements of the Code include:
- a price cap, initially set at $12/GJ, designed to anchor wholesale contract negotiations between gas producers and buyers
- an exemptions framework to incentivise producers to commit more gas to the east coast gas market in the short term and facilitate new investment to meet ongoing demand in the medium term which supports the ability for east coast gas users to access gas at reasonable prices and on reasonable terms
- transparency obligations to increase visibility of the amount of uncontracted gas to be produced, and when producers will bring that gas to the domestic market
- conduct provisions aimed at reducing bargaining power imbalances between producers and gas buyers and establishing minimum conduct and process standards for commercial negotiations.
The Code commenced on 11 July 2023, with a 2-month transitional period to allow companies to adapt to new conduct provisions, record keeping and reporting obligations. The transitional period ended on 11 September 2023.
A fact sheet (DOC 90 KB) provides information on the key elements of the Code, how it is structured and high-level information on how it operates.
The ACCC provides guidance on how it will monitor and enforce the Code. This guidance is published on the ACCC website.
Producers can apply for conditional exemptions from provisions in the Code which will be considered by the Energy Minister and the Resources Minister.
The government consulted on questions relating to the design of the code between 9 December 2022 and 7 February 2023. Over 60 submissions were received.
A second round of consultation was undertaken between 26 April 2023 and 12 May 2023 to allow stakeholders to consider an exposure draft of the code. Over 40 submissions were received.
Measures to mitigate global energy price rise crisis 14 December 2022
First round of consultation - Options to ensure the domestic wholesale gas market delivers for Australians
Second round of consultation - Gas Mandatory Code of Conduct: Consultation paper and draft regulations