About the RFS

Overview of the Renewable Fuel Scheme 

The Renewable Fuel Scheme (RFS) is a certificate scheme under the Energy Security Safeguard, like the Energy Savings Scheme and Peak Demand Reduction Scheme. It is a market-based certificate scheme and creates financial incentives to support the production of green hydrogen. 

The RFS will commence on 1 January 2027. 

The RFS currently supports green hydrogen production. The NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) is currently working on potential legislative amendments so the RFS can support biomethane from 2028.

Certificates for producing green hydrogen

The RFS works by creating a market for Renewable Fuel Certificates (RFCs). Accredited Certificate Providers (ACPs) will be able to create and sell RFCs for revenue. The number of RFCs they can create depends on how much green hydrogen they produce.

The role of scheme participants

The RFS requires scheme participants (natural gas retailers and large users who do not buy gas through a retailer) to support the transition to renewable fuels. Scheme participants must obtain and surrender certificates to meet their share of the scheme’s renewable fuel production target/s or pay a penalty for a certificate shortfall. This creates a demand for RFCs which incentivises renewable fuel production and supports projects to become commercially viable.

Incentives leading to lower emissions

• Green hydrogen producers get revenue from selling the RFCs they create.
• Scheme participants can purchase and surrender certificates to offset liabilities and meet their energy targets.
• Local demand for green hydrogen reduces emissions in NSW.

Governing the scheme

IPART administers and regulates the RFS. 

The NSW Department of Climate Change, Energy, the Environment and Water (NSW DCCEEW) develops and maintains the legislation that establishes the scheme.

The RFS will be integrated with the Commonwealth Government’s Guarantee of Origin scheme (GO scheme). The scheme is voluntary. It will allow participants to create Product GO certificates for the clean energy products they produce (including green hydrogen). ACPs will need these certificates to create RFCs.