“We say these ads were intended to encourage consumers to connect to, or remain connected to, Australian Gas Networks’ distribution network and to purchase gas appliances for their homes, based on the misleading impression they would receive ‘renewable gas’ within a generation.”
An industry source familiar with the development of the company’s advertising campaign said concerns had been raised internally that the technologies being promoted were “very far away from being realised”.
However, in a statement, Australian Gas Networks said it had continually strived to provide accurate communications about its services, and declared it would challenge the ACCC’s legal action.
“We are disappointed with the ACCC’s decision to take proceedings and will be defending these claims,” a company spokesperson said. “Australian Gas Networks will not be making any further comment at this stage.”
An image from the advertising campaign called “Love Gas”.Credit: ACCC
Contraventions of consumer protections carry penalties up to $50 million in each instance, but it is up to the court to determine the fines in each instance.
Gas companies often refer to renewable gases such as green hydrogen – the name for hydrogen made using renewable energy to split water from hydrogen to ensure the end product is emissions-free. They also often cite biomethane, produced when bacteria break down organic material such as landfill or agricultural and human waste.
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The pipeline infrastructure run by network companies generates revenue via usage charges, meaning their business models will come under intensifying pressure if there are not enough homes and companies using gas to heat their premises.
A number of pipeline companies across the country have made requests to energy regulators to increase the charges they are permitted to charge, pointing to a reduction in their customer base as homes switch from gas to electric heating and cooking.
Tony Wood, director of energy at the independent Grattan Institute, said switching household gas appliances to electric alternatives was a cheaper way to reduce emissions than using hydrogen or biomethane, which were “too costly and too far off for widespread use in homes and small businesses”.
“I started my life in the gas industry, so I’m not an enemy of the gas industry, but the numbers we did basically suggested biomethane and hydrogen are just bad ideas economically,” he said.
As no Australian green hydrogen project has yet moved into commercial operation, Wood said it was understandable why a gas network operator may want to claim it could deliver greener fuel sources.
“When your only asset is gas networks and there’s an existential threat to your business, then of course you’re going to fight back,” he said.
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