Bill aims to pass go on proving credentials of hydrogen

A bill to certify renewable electricity and the carbon footprint of the emerging hydrogen industry has been referred for a Senate inquiry.

Introducing the proposed legislation to parliament on Thursday, Assistant Minister for Climate Change and Energy Josh Wilson said the framework would track and verify emissions across a product's lifecycle.

The Guarantee of Origin, or GO, scheme is intended to prove eligibility under the hydrogen production tax incentives that are yet to pass parliament.

The voluntary scheme is part of the broader $22.7 billion Future Made in Australia package to encourage new industries.

"It will create opportunities for Australian businesses to verify new clean products and to market their low-emissions credentials through an effective, trusted scheme," Mr Wilson said.

Separately, a review of the risk of so-called carbon leakage, when big emitters simply move operations to countries with less onerous environmental settings, is due with the federal government by the end of September.

Some rival economies are bringing in carbon pricing, with goods imported from countries such as Australia - with a lower or no carbon price - facing new levies.

Joining the rest of Europe, Britain's looming carbon border adjustment mechanism, or CBAM, will apply to hydrogen as well as iron, steel, aluminium, fertiliser and cement.

But Mr Wilson said the GO scheme was aligned with international standards and would increase Australian exports as part of the push for more local manufacturing.

Hydrogen is expected to be the foundation of new clean energy industries in Australia and elsewhere, as a feedstock to make green iron and steel, ammonia, fertilisers and fuels.

The bill also brings in a renewable electricity guarantee of origin, or REGO, to replace a framework that is being phased out under the Renewable Energy Target that will end in 2030.

The REGO certificates will prove when, where and how renewable electricity was produced to prevent Australia from being punished in markets demanding low-emission commodities.

The Senate Environment and Communications Legislation Committee will report back to parliament on October 31.