Chemistry Australia welcomes the release of the Federal Government’s national Domestic Gas Reservation draft legislative package to support the fair allocation of Australia’s natural gas assets to domestic and export markets.

The proposed national domestic gas reservation architecture is a welcome development for Australian chemical manufacturers, with the proposed legislation ensuring mandatory domestic supply obligations are preserved and reservation volumes of up to 20 per cent are maintained for domestic gas users.

These arrangements will provide chemical manufacturers and industrial gas users with the certainty and confidence it needs to continue investing in critical chemical manufacturing and to build Australia’s industrial resilience.

Gas is a critical input for the value-adding chemicals and plastics sector, which supplies 108 of Australia’s 114 industries and supports around 240,000 jobs across supply chains from fertiliser production for agriculture to essential inputs for mining, healthcare and food production.

Domestic chemical manufacturing adds significant value to Australia’s natural gas assets, adding more than $430 million of economic value to every petajoule of gas used by the sector.

Chemistry Australia CEO Matthew Flügge said the gas reservation is important for the chemical manufacturing industry, which requires affordable gas supplies under long term contracts to grow investment in domestic manufacturing, secure urban and regional jobs, and build resilience in Australia’s supply chains.

“Manufacturers need certainty to invest; a more structured domestic gas market will support investment in critical chemical manufacturing and help secure the valuable inputs Australian industries rely on every day,” Mr Flügge said.

“We are pleased to see domestic supply obligations included in the draft framework, helping ensure gas users can secure the gas they need to invest with confidence and support the future growth of Australia's chemical manufacturing sector.”

“The exposure draft is an important acknowledgment that gas used as feedstock and process heat are fundamental to Australia's future industrial capability and economic resilience.”

Chemistry Australia will continue to work with the federal government to ensure the framework supports Australian manufacturing and heavy industry with reliable, long-term access to competitively priced gas, to help secure urban and regional jobs, and strengthen Australia's economic resilience.