Energy Users Fear Gas Reservation Scheme No Better Than Status Quo – And Potentially Worse
Emily Wood | September 24, 2026
Large commercial and Industrial (C&I) energy users fear that the proposed gas reservation scheme will not deliver the Government’s intent, and potentially make a difficult situation worse for all energy users leading to an uptick in the cost of living across Australia, said Energy Users Association of Australia (EUAA) in its submission to the Exposure Draft Legislation.
“While the EUAA strongly supports the Government’s intent to introduce a national domestic gas reservation scheme, the legislative instruments released to date contain structural weaknesses, definitional ambiguities, and governance gaps that risk undermining the scheme’s effectiveness and failing to deliver the outcomes intended by Government,” said Acting Chief Executive Officer, Dr Leigh Clemow.
“While the Gas Market Review Final Report correctly diagnoses the structural failures of the east coast gas markets; persistent market power, opaque conduct, insufficient supply, and prices that have become adrift from domestic production costs. But the Exposure Draft Legislation, in its current form, does not adequately address these underlying problems.”
“The gas industry has already secured concessions and that’s where it must end. We’ve seen this dynamic before: incremental pressure that gradually erodes the intent of the legislation. That can’t be allowed to happen again, and Government has a critical role in holding the line,” said Dr Clemow
The EUAA has consistently argued over more than a decade that the core requirements for an effective gas market are affordability, additionality, transparency & predictability, and enforceability.
The EUAA remains deeply concerned that the current exposure draft does not adequately address these requirements. In particular, there is a risk that a reservation obligation that does not deliver genuinely additional gas at a competitive price could simply reshuffle existing supply, while adding regulatory complexity and uncertainty to an already dysfunctional market.
“Getting gas reservation right matters. A scheme that fails to deliver affordable, additional gas, backed by transparency, predictability and effective enforcement, risks locking in higher costs for electricity, essential goods and services for all Australians while negatively impacting jobs in manufacturing,” said Dr Clemow.
“Gas is a critical and growing input to our energy transition, electricity generation, and the manufacturing of food, building materials and other essential goods and services. It is also critical to a thriving and growing C&I sector,” said Dr Clemow.
“Australia needs a domestic reservation scheme that delivers real and additional gas, at a competitive price, under rules businesses can understand and trust.
“The Government has an opportunity to get this right. But the legislation needs to be strengthened to ensure the scheme delivers its intended outcomes rather than simply changing the rules around an existing market that is already failing Australian energy users.”
The Energy Users’ Association of Australia (EUAA) is the peak body representing Australian commercial and industrial energy users. Our members are the engine room of the Australian economy, producing many of the products that households and business use every day including bricks, glass, steel, aluminium, paper, food and beverages. Combined our members employ over 1 million Australians, pay billions in energy bills every year and in many cases are exposed to the fluctuations and challenges of international trade.