Greenhouse and Energy Minimum Standards (Gas Water Heaters) Determination 2017

GEMS level requirements - The central concept from the Act. The Determination specifies exactly what “energy use” and “greenhouse gas production” levels a product must meet for registration (s 6). The relevant standard, AS/NZS 4552.2:2010 s 2.1, sets out performance thresholds such as minimum gas utilisation efficiency and maximum energy consumption. The exclusion of the reference to the never-published AS/NZS 4452.3 is a clarification that prevents confusion.

Product classes - Two classes with distinct technical boundaries (s 5). Class 1 (storage water heaters) is bounded by a 50 MJ/h gas consumption cap and a 30 litre minimum storage capacity. Class 2 (instantaneous water heaters) has a 250 MJ/h gas consumption cap and a 13.1 kW minimum heat output. The definition of “instantaneous water heater” (s 5(4)) means gas burns only when water is discharged, which excludes units with standing pilot operation for water heating (though pilot flames are permitted). “Storage water heater” means a container that heats and stores water. Central heating boilers and combination appliances are explicitly not covered. The exclusion of combination appliances is a notable scope limitation; such products are not required to meet these MEPS, though they may be covered by other determinations or state regulations.

Families of models - A mechanism to allow multiple models to be registered based on a single test report, provided they share a brand, the same test report, and identical relevant physical and energy characteristics (s 9). For class 1, those characteristics include nominal gas consumption, storage capacity, installation type, temperature adjustment provision, in-built water mixing, and solar boosting provision. For class 2, storage capacity is not relevant. The family arrangement reduces the cost of compliance but creates a risk that genuine differences in a model’s performance (not listed) could be concealed. The requirement that all models in a family be of a single brand means that subsidiaries or licensees cannot pool models across separate brands to reduce testing.

Static incorporation of standards - The Determination locks the versions of AS/NZS 4552.2:2010, AS/NZS 5263.1.2:2016, and AS/NZS 5263.0:2017 as they existed on the date the Determination came into force (s 4(3)). Also, any document referenced within those standards (under “Referenced Documents” or equivalent) is likewise frozen at the version current on 7 December 2017. This prevents a situation where a minor amendment to a standard could change compliance requirements without a new determination, but it also means the MEPS may not reflect technological improvements for years.

No labelling requirement - Section 7 explicitly states there are no GEMS labelling requirements. This is a significant difference from most other GEMS determinations (e.g., for refrigerators or air conditioners). The absence of a label saves compliance cost for manufacturers and retailers but also means consumers have less visible information at point of sale about the energy performance of gas water heaters. The energy use requirements still apply, but the information is not required to be displayed on the product.

Category A products - Section 10 declares all covered products as category A, which under the Act attracts the most stringent registration regime: mandatory registration before supply, with no exemptions. This imposes a barrier to entry for new or small-scale importers, as registration costs and testing must be borne before any unit can be sold.

The Determination directly binds any person who supplies gas water heaters in Australia, including manufacturers, importers, and their agents. It is a legislative instrument under the Act, so non-compliance affects a broad chain: the supplier who registers the model, retailers who sell unregistered models, and potentially wholesalers. Because the Act imposes strict liability in many respects, even an innocent importer could face penalties if they bring in a model that does not meet the specified standards.

Manufacturers and importers bear the primary compliance burden. They must ensure that each model they wish to supply is either registered under this Determination or covered by a family of models registration. They must arrange testing by accredited laboratories following the specified methods (s 6(2) and s 8(2)). The cost of testing and registration is a fixed cost that favours larger firms with diversified product lines, as they can spread testing across families. Small importers bringing in single niche models face a disproportionately high per-unit compliance cost.

Test laboratories and certifiers are indirectly affected because the Determination specifies testing methods (AA3.1, ZC107, ZC108) and performance standards (clause 5.13 of AS/NZS 5263.1.2:2016). They must be familiar with these standards and ensure their testing rigour matches the static version locked in by the Determination.

Retailers and distributors must ensure they only stock registered models. While the primary duty sits with the supplier, the Act may impose secondary liability for selling unregistered products (depending on the supplier’s knowledge and the chain of supply). The Determination gives them a reference point to verify compliance: the GEMS register.

Consumers are affected indirectly. The MEPS raise the baseline efficiency of gas water heaters sold, which reduces running costs over time but may increase the purchase price. The absence of labelling means consumers have less ability to compare models on energy performance at a glance. However, the requirement for registration means that the GEMS Regulator holds performance data that can theoretically be accessed, though not at point of sale.

Regulators (GEMS Regulator under the Act) use the Determination as the technical benchmark for registration and compliance enforcement. The static standard reference means the Regulator cannot enforce against models that comply with a later, more stringent standard unless the Determination is amended.

State and territory gas safety regulators may refer to these standards in licensing or approval of gas appliances, creating overlapping compliance. However, the Determination does not itself impose any gas safety requirements; those are covered by separate state/territory legislation.

Duty to comply with GEMS level requirements - Under sections 24(1)(a) and 25(a) of the Act, a registered model must meet the energy use requirements specified in s 6 of the Determination. This means the model’s design must achieve the minimum efficiency prescribed in AS/NZS 4552.2:2010 s 2.1, and its annual energy consumption must be tested per AS/NZS 5263.1.2:2016 Appendix AA3.1.

Duty to comply with product performance requirements - Section 8(1) of the Determination specifies that models must meet the minimum thermal efficiency requirement in clause 5.13 of AS/NZS 5263.1.2:2016. Testing must be conducted per the appropriate appendix ZC (ZC107 for class 1, ZC108 for class 2). This is in addition to the energy use requirement.

Right to use families of models - A supplier may group models into a family (s 9) to avoid testing each variant separately. This right is conditional: single brand, same test report, same physical and performance characteristics. It reduces compliance cost but limits flexibility. The supplier must ensure that all models in the family genuinely share the listed characteristics; otherwise, the grouping is invalid.

Right to rely on transitional provisions - If a model was registered under the 2013 Determination, that registration continues under the 2017 Determination unaffected (s 11). The supplier does not need to re-register or retest. This right is valuable because it grandfathered older models that may not meet the 2017 MEPS. However, it also means that a model registered under the 2013 standards can still be supplied indefinitely, even if its performance is lower than what is now required for new registrations. This creates a two-tier market: new models must be more efficient, while old models can continue.

Duty to ensure no false representations - While the Determination does not impose labelling, the underlying Act prohibits false or misleading representations about GEMS compliance. A supplier must not claim that a model meets the Determination if it does not.

No labelling duty - Section 7 explicitly states there are no GEMS labelling requirements. This is a right in the sense that suppliers are not required to print labels or affix energy rating stickers. However, some suppliers may voluntarily provide efficiency information; they must ensure such information is accurate.

Duty to comply with static standards - The Determination incorporates standards as at 7 December 2017 (s 4(3)). Suppliers cannot satisfy the requirements by complying with a later version of an incorporated standard. If a later version is more lenient, that does not help; if more stringent, that is not required. This duty creates a trap for those who might look only at the current version of an AS/NZS standard without realising they must use the older version.

The Determination itself does not create penalties; enforcement is under the Act. However, because the Determination sets the specific technical requirements, non-compliance with any of its provisions would constitute a breach of the Act. The Act provides for:

• Civil penalties for supplying a registered model that does not comply with GEMS level requirements or other requirements under the Determination. These can be significant (for a body corporate, up to 10,000 penalty units per contravention, which as of 2024 is in the order of $3 million). Each day of continuing non-compliance can be a separate offence.
• Infringement notices (on-the-spot fines) for less serious breaches, such as failing to keep records or provide information.
• Enforceable undertakings accepted by the Regulator.
• Court orders for compliance, including injunctions, corrective advertising, and orders to recall or dispose of non-compliant products.
• Cancellation or suspension of registration by the GEMS Regulator. This is a key enforcement tool: if a model is found not to meet the Determination’s requirements, its registration can be revoked, effectively banning further supply.

The Determination’s reference to “minimum thermal efficiency requirement” (s 8(1)) and the exclusion of the unpublished standard (s 6(1)) are both mandatory. A supplier cannot argue that a different test method or a different standard is equivalent. The static incorporation of standards (s 4(3)) means that even if the technical committee later amends a test to be more lenient, the supplier is still bound by the 2017 version.

The absence of a labelling requirement (s 7) means that the Regulator cannot pursue a supplier for failing to display a label. However, that also removes a low-cost enforcement avenue: if a label were required, spot checks at retail would reveal compliance; instead, enforcement relies on testing of samples and record-keeping.

The Determination’s clear specification of what constitutes a family of models (s 9) also creates a compliance risk: if a supplier groups models that do not share all required characteristics, they may be using an invalid registration, potentially attracting penalties for supplying unregistered products.

Greenhouse and Energy Minimum Standards Act 2012 - This Determination is made under ss 23 and 35 of the Act. It specifies the matters that the Act leaves to determination: GEMS level requirements, labelling (none here), other requirements, families, and categories. The Act provides the overarching enforcement framework.

Legislation Act 2003 - The Determination is a legislative instrument registered on the Federal Register of Legislation. It is subject to tabling, disallowance, and sunsetting (usually every 10 years). The note at the end of the Determination points to the Register.

State and territory gas appliance safety laws - Each state and territory has regulations requiring gas appliances to be certified for safety (often referencing AS/NZS 5263.1.2 or similar). The Determination’s performance requirements (energy use and thermal efficiency) are separate from safety, but both sets of rules often reference the same standards. A supplier must comply with both. The Determination’s static incorporation of AS/NZS 5263.1.2:2016 means that if a state safety regulator later adopts a newer version, the supplier may have to test to two different editions of the same standard.

Trading law provisions - The Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010) prohibits misleading conduct and false representations about product quality or performance. If a supplier claims a water heater exceeds the minimum standards, but it does not, that could attract enforcement by the ACCC or state consumer affairs agencies in addition to GEMS penalties.

Customs Act 1901 - Imported gas water heaters must be customs cleared. Customs may check that the product has a valid GEMS registration. The Determination’s product classes and test requirements form part of the import control framework.

Other GEMS determinations - Water heaters that do not fall within the scope of this Determination (e.g., electric water heaters, solar water heaters, or combination appliances) are covered by separate determinations. Suppliers who deal across multiple product types must navigate different standards and testing regimes.

Competition law - The Determination does not directly address competition, but high compliance costs (testing, registration) may act as a barrier to entry, potentially reducing competition. Conversely, setting common minimum standards prevents a race to the bottom on efficiency, which may protect consumer interests but also limits product differentiation.

The Determination itself has no amendment history within its text; it is a single instrument made on 7 December 2017 and registered shortly after. Its key amendment is that it revokes and replaces the Greenhouse and Energy Minimum Standards (Gas Water Heaters) Determination 2013 (s 2(2)).

The most substantive change from the 2013 version is the update of incorporated standards. The 2013 Determination would have referenced earlier editions of AS/NZS standards. The 2017 version updates the references to AS/NZS 4552.2:2010, AS/NZS 5263.1.2:2016, and AS/NZS 5263.0:2017. It also includes a note that the 2013 Determination likely referenced AS/NZS 5263.1.2:2012 or earlier. The deletion of the reference to AS/NZS 4452.3 in s 6(1) is a correction of an error that existed in the 2013 Determination (the note says that standard had not been published as at commencement of this Determination, but presumably the 2013 Determination also contained a similar anticipatory reference that never materialised).

Another change is the explicit exclusion of combination appliances in s 5(3). The 2013 Determination may have been ambiguous on that point. The 2017 Determination also introduces more precise definitions, such as “fan assisted combustion system” (s 5(4)), which were drawn from the updated standard.

The family of models provisions (s 9) are more detailed than the 2013 version, listing specific physical characteristics that must be shared. This was likely a response to enforcement experience showing that loose groupings were being used to avoid testing.

There is no indication in the Determination of any later amending instruments. However, as a legislative instrument, it may have been amended by subsequent determinations (e.g., to update standards), but the text provided does not show any such amendments. Users should check the Federal Register of Legislation for any amending instruments registered after 7 December 2017.

The Determination itself has not been the subject of reported litigation in the text provided. There are no cases cited, and no judicial interpretation is referenced. This is not surprising for a technical, prescriptive instrument that largely operates in the administrative domain.

However, the underlying Act (Greenhouse and Energy Minimum Standards Act 2012) has been involved in some administrative appeals and judicial review applications. Those cases typically challenge decisions of the GEMS Regulator (e.g., to refuse registration, to cancel registration, or to issue compliance notices). The Determination’s text would be central in such cases because it defines the substantive requirements.

Potential grounds for litigation include:

• Disputes over the interpretation of the product class definitions (s 5). For example, whether a particular appliance is a “storage water heater” or “instantaneous water heater” could determine which test method applies.
• Arguments about the validity of a family of models grouping (s 9). A supplier might challenge a regulator’s conclusion that two models are not in the same family.
• Challenges to the regulator’s use of the static incorporation rule (s 4(3)). For instance, if a supplier tests to a later version of a standard and claims that is ‘equivalent’, the regulator would reject it, and a court would need to decide whether the Determination permits that.
• Disputes over the transitional provision (s 11). A supplier may argue that a model registered under the 2013 Determination is still valid, even if the regulator argues it should be cancelled because it does not meet the 2017 standards. However, s 11 seems clear that registration is unaffected, so the regulator’s power to cancel under the Act would be limited.

Because the Determination is a legislative instrument, it could also be challenged under administrative law principles (e.g., that it is ultra vires the Act or that it was not properly made). But given it was made by the Minister and is consistent with the Act, the likelihood of successful challenge is low.

Practitioners should monitor the GEMS Regulator’s enforcement actions and any decisions of the Administrative Appeals Tribunal (AAT) on review of registration decisions. Such decisions would be the most likely source of litigation history for this specific Determination.

Static standard lock-in - The Determination incorporates versions of standards as at 7 December 2017 (s 4(3)). If a later standard amends test methods in a way that makes compliance easier or changes performance thresholds, the supplier cannot rely on the new version. Conversely, if a later version is more stringent, the supplier is not required to meet it. This creates a risk of regulatory lag. Suppliers who update product designs after the effective date must still test to the older standard unless and until a new determination is made.

Grandfathering of 2013 registrations - Section 11 preserves existing registrations. This means a model that met the 2013 standards but would fail the 2017 standards can continue to be supplied indefinitely. This gives an advantage to incumbent suppliers who have grandfather rights; a new entrant offering a similarly efficient product would need to comply with the 2017 standards (which may be higher), creating an uneven playing field. A supplier who missed the transitional window (or whose product was not registered in 2013) may have to design a more efficient product despite the market viability of the older design.

No labelling requirement - While section 7 says there are no requirements, the Act itself may still impose a duty not to mislead. But the absence of a mandatory label means that a consumer cannot easily see the energy performance of a gas water heater at the point of sale. This may reduce market pressure for efficiency above the minimum. It also removes a compliance check for regulators (no label to inspect).

Exclusion of combination appliances - Section 5(3) excludes combination appliances (boiler plus water heater). These products are not covered by this Determination, so they do not need GEMS registration. However, they still consume gas and produce emissions. If a supplier markets a combination appliance as a water heater substitute, it escapes the MEPS regime. The note says combination appliances have two separate water circuits, but borderline designs could be argued either way.

Definitional overlaps - The product class thresholds (e.g., 50 MJ/h, 30 litres, 250 MJ/h, 13.1 kW) create boundaries. A storage heater with a consumption of 51 MJ/h is not covered by class 1; it may fall outside this Determination entirely (if it is not an instantaneous water heater). Similarly, an instantaneous heater with a heat output below 13.1 kW is not covered. This could create perverse incentives to choose a design just below or above the thresholds.

Ambiguity in “nominal gas consumption” - The definition (s 5(4)) refers to the manufacturer’s specifications and statements. This is not an independently verified figure. A supplier could manipulate the stated nominal consumption to fit within a class, though the regulator may challenge that.

Family of models requires a single brand - Section 9 requires that models in a family be “of a single brand”. This prevents grouping across brands even if the products are mechanically identical (e.g., OEM branded products). This increases testing costs for suppliers who sell the same product under multiple brands.

Testing requirements are per standard - The Determination does not spell out the test procedures; they are incorporated by reference. Suppliers must purchase the standards (AS/NZS 4552.2:2010 and AS/NZS 5263.1.2:2016) from SAI Global. This adds cost and may catch out smaller operators who rely on summaries.

Step 1: Determine if your product is covered.
Check that it is a gas water heater fired with natural gas, LPG, or simulated natural gas (s 5(1)(a)). It must use natural draught or fan assisted combustion (s 5(1)(b)). If it is a combination appliance (central heating boiler plus water heater with two separate circuits), it is excluded (s 5(3)). If it is a central heating boiler only, it is not covered.
For storage water heaters (class 1): verify nominal gas consumption ≤50 MJ/h, storage capacity ≥30 litres, and not certified only for indoor installation (s 5(2)).
For instantaneous water heaters (class 2): verify nominal gas consumption ≤250 MJ/h and heat output ≥13.1 kW (s 5(2)).
If the product does not fit either class, it is not covered by this Determination, though it may fall under another GEMS instrument or state regulations.

Step 2: Meet the energy use requirements.
Ensure the product complies with section 2.1 of AS/NZS 4552.2:2010 (excluding the words referring to AS/NZS 4452.3) (s 6(1)). This sets minimum gas utilisation efficiency and maximum annual energy consumption. Testing must follow the annual energy consumption test in paragraph AA3.1 of Appendix AA of AS/NZS 5263.1.2:2016 (s 6(2)). Use an accredited laboratory familiar with that test.

Step 3: Meet the product performance requirements.
The product must meet the minimum thermal efficiency requirement in clause 5.13 of AS/NZS 5263.1.2:2016 (s 8(1)). Testing must use the appropriate appendix ZC: for class 1, paragraph ZC107; for class 2, paragraph ZC108 (s 8(2)). Again, engage a competent laboratory.

Step 4: Consider using a family of models.
If you have multiple models that share a single brand, the same test report, and the same physical and energy performance characteristics (listed in s 9), you may register them as a single family. This reduces testing cost. Ensure that the characteristics match exactly: nominal gas consumption, storage capacity (class 1 only), installation type, temperature adjustment, mixing provision, solar boosting provision, average annual energy consumption, and thermal efficiency (s 9(1)(c)-(d) and (2)(c)-(d)). If any differ, you must test and register separately.

Step 5: Register with the GEMS Regulator.
Submit an application for registration (or variation for a family). Provide test reports demonstrating compliance with steps 2 and 3. Pay the applicable fee (not specified in this Determination, but set by the GEMS Regulator). The product will be registered as a category A product (s 10). Registration is mandatory; supply of an unregistered model is a breach of the Act.

Step 6: No labelling required.
Do not affix any GEMS energy rating label; there is no requirement (s 7). However, if you voluntarily provide energy performance information, ensure it is accurate and not misleading (general consumer law applies).

Step 7: Review transitional provisions.
If you had a model registered under the 2013 Determination, that registration continues automatically; you do not need to re-register (s 11). However, if you want to register a new model that is derivative of an old one, it must meet the 2017 standards. Also note that the old registration continues even if the model would not meet the 2017 standards; this is a compliance advantage, not a liability.

Step 8: Maintain records.
Keep copies of test reports, registration certificates, and any correspondence with the regulator. The Act may require retention for a period after supply ceases. The Determination does not specify a period, but the Act generally requires records for at least 5 years.

Step 9: Monitor for amendments.
Because this Determination may be amended or replaced in the future (especially when standards are updated), check the Federal Register of Legislation periodically. Any new determination may change thresholds or standards, and you may need to re-register or retest.

Step 10: Ensure compliance across the supply chain.
If you are an importer, ensure your overseas manufacturer is aware of these specific Australian requirements, especially the static standard versions. Do not assume that compliance with a general AS/NZS standard will automatically satisfy the Determination.