24 June 2025
Policy shift, but gas hot water ban still leaves households behind
The Australian Gas Infrastructure Group (AGIG) acknowledges the Victorian Government’s announcement on its revised ‘Building Electrification’ policy, warning that the decision to press ahead with a gas hot water ban for homes will be costly, disruptive and ineffective.
AGIG Chief Executive Officer Craig de Laine said while it is encouraging there has been some shift by the Victorian Government in the face of strong opposition to its original policy, AGIG remains opposed to the Government’s decision to restrict customer choice and to force significant costs onto households during a cost-of-living crisis.
“It’s not clear who benefits from this policy: it places a direct and upfront cost on households and removes choice,” Mr de Laine said.
“The forced end of life replacement of gas hot water systems across more than 2.2 million homes is a significant undertaking, and there is no evidence that the government has a credible roadmap to deliver its policy, including to ensure affordability and that their energy needs are properly met in a cost-effective way.
AGIG is particularly concerned that rental properties remain subject to forced electrification under the Government’s revised policy, with replacement gas space heaters and hot water systems banned in rental properties from March 2027.
"This creates a confusing, two-tiered system that places stricter requirements on owners of rental properties, with the mandatory changes potentially reducing rental amenities and driving up costs for both tenants and landlords.
“No other state is taking this approach, and it’s unclear why Victoria is choosing to - especially when a more balanced path could avoid these higher costs and disruption for households and business.”
Mr de Laine said the shift from the government’s draft position reflects a recognition that forced electrification is challenging for many Victorian households, businesses and industries, and there are other policy options to achieve net zero without the inequity and cost impacts that remain under the revised policy.
“We acknowledge the Government’s willingness to listen and to refine its draft policy based on evidence and consultation, and encourage it to apply that same lens to the residential hot water and rental components of the policy.” Mr de Laine said.
“Our commitment to our customers, employees, and the broader Victorian community remains strong. We will continue to operate our networks safely and reliably while advocating for energy solutions that deliver on affordability, emissions outcomes and long-term investment confidence.”
Background
In December 2024, the Government outlined its preferred option to mandate electrification for all new and existing residential buildings (excluding existing cooking appliances) and most new commercial buildings.
AGIG is one of Australia’s largest gas infrastructure businesses and a key partner for our customers; delivering the infrastructure needed to support the energy transition today and in the future. Across every Australian mainland state, and the Northern Territory, our infrastructure delivers gas to more than 2 million homes and businesses; and transports
and stores gas that underpins the Australian economy for power generation, mines and manufacturers. We employ more than 500 people with more than 1,600 contractors working on our business.
Our Net Zero Ambition and emissions reduction targets outline our ongoing dedication to a sustainable energy future. We know that to deliver our net zero ambitions in a timely, affordable and reliable way for all customers, a diverse range of energy supply is needed. We are actively participating in the energy transition by delivering the natural gas needed today and advancing solutions for the future, including through our hydrogen production facilities, and we will continue to work with customers and stakeholders to deliver and develop the energy infrastructure solutions essential to lowering emissions.
For Further Information Contact
Alex Woff, Advisor External Communications
