EUAA Submission: Domestic Gas Reservation Scheme – Draft Design Framework
Emily Wood | June 30, 2026
‘…This submission emphasises that Australia’s east coast gas market is structurally failing, with high prices, opaque conduct, and supply insecurity eroding sovereign manufacturing capability. EUAA members argue that urgent, fundamental reform is required to prevent further demand destruction and loss of industrial competitiveness.
EUAA members also believe that a well-designed and implemented DGRS will not negatively impact existing LNG export contracts nor will it result in a domestic market that is “un-investable”. After an initial establishment period the DGRS will provide long-term policy certainty and balance the needs of gas producers, investors and domestic consumers.
The core messages in this submission are:
- Affordability is the central objective. The DGRS must de‑link domestic gas prices from volatile LNG netback pricing and deliver domestic gas below $10/GJ with many members arguing that domestic prices should be closer to Tier‑1 production costs (~$6/GJ). Long-term gas at or above the previous $12/GJ cap is considered too high and misaligned with Australia’s competitive advantage.
- Reservation must deliver real gas, not paper compliance. Members insist on a must‑sell obligation, not merely “make available”, due to past instances where producers offered gas at $40–$60/GJ with unworkable terms—offers described as disingenuous and validated by ACCC findings. “Members have reported… gas was offered… at prices that could not be accepted by the buyer… These offers were seen as disingenuous.”
- Support for a 20% reservation target, with transparency on modelling. Many members believe the target should be in the range of 15–25%, reviewed annually, but affordability must be guaranteed regardless of the percentage. Members would also appreciate gaining a clearer understanding of the modelling that underpins the reservation percentage.
- Strong governance and transparency are essential. EUAA argues that opaque Ministerial discretion has undermined trust in past mechanisms (Code of Conduct, ADGSM, HoA). Therefore, we call for the AER to lead a transparent, rules‑based compliance framework, with public reporting of DSO plans, contract offers, and market data and an annual statement to parliament on the performance of the DGRS in supplying the Australian domestic gas with affordable gas. In order to do this, the AER must be appropriately resourced as soon as possible.
- Compliance flexibility must not become avoidance. Limited flexibility is acceptable to manage demand fluctuations, but EUAA strongly opposes exemptions, indefinite deferrals, or WA‑style “whole‑of‑life” obligations that allow obligations to be “kicked down the road”.
- Infrastructure investment is critical. Pipeline and storage constraints must not be used to justify DSO exemptions; swaps, banking, and third‑party contracting provide alternative compliance pathways. We believe the DGRS will deliver long-term certainty and provide a clear path for investment in not only new production but infrastructure to support transport and storage capacity.
- Integrated market reforms are required. EUAA supports enhanced transparency, mandatory price‑range offers, improved Gas Bulletin Board reporting, and conduct obligations that eliminate silent auctions and information asymmetry.
- Transition measures must remain until the DGRS is proven. ADGSM, the Code, and HoA should not be dismantled prematurely. EUAA members remain unconvinced on the merits of LNG import terminals, with many expressing concerns it would entrench import‑parity pricing and stymie new domestic production…..’
Please download attached document to read the full submission.
