Ai Group welcomed the chance to make a submission on the Mandatory Gas Code of Conduct.

Our members include many industrial users of natural gas, who currently rely on it for process heat, electricity generation, or chemical feedstock. While all will need to contribute to the transition to net zero emissions in coming years, most likely through replacing natural gas via electrification, biogas or hydrogen, the availability and affordability of natural gas will be important to their viability for many years to come. Many other members make use of goods and services for which gas is an important input. And all businesses are impacted by the gas market for so long as gas powered generation plays an important role in reliability and price-setting in the electricity market.

The Mandatory Code of Conduct includes the Government’s proposal for an extraordinary intervention in the setting of the relevant prices. There are significant known and unknown risks associated with such an intervention. It is critical that these risks should be fully understood and mitigated. A key mitigant of the risks would be a clear articulation of the triggers for the lifting of the RPP and legislative provisions governing its removal.

It is essential that the benefits of Government’s energy price interventions, including the emergency price cap, the Mandatory Code and the RPP, ultimately flow through to all users of natural gas, whether they are wholesale buyers, retail customers or users of gas-intensive products.

This submission considers the context of the energy crisis; the policy considerations; the options for the implementation of the Code; and the need for clear principles to guide interventions of this sort.