A new domestic reservation scheme will see Queensland gas producers and communities punished because southern states spent years not developing their own resources, according to a peak industry group.

The Federal Government policy, which will come into effect from next July, will see Queensland’s three liquefied natural gas exporters forced to set aside 20 per cent of new supplies to sell for domestic use.

The Queensland Resources Council said the scheme risked the state’s reputation as a reliable trading partner and impacted investment, along with future gas supply.

“The 20 per cent reservation scheme threatens Queensland’s successful gas industry, which has generated significant economic benefits for all Queenslanders and supports thousands of local jobs, particularly in the regions,” QRC chief executive officer Janette Hewson said.

“A domestic reservation scheme could work if it is carefully designed and encourages further investment in the industry to boost local supply.

“By imposing a blanket 20 per cent there is a real risk for domestic oversupply which could have unintended consequences for local gas producers.”

Regional economic development group Townsville Enterprise said it had consistently called for a domestic gas reserve and was thankful that the Albanese Government had delivered this policy.

“We advocated for between 15 per cent and 25 per cent gas reservation and we’re happy with this medium,” Townsville Enterprise chief executive officer Claudia Brumme said.

She said it was an important step toward ensuring Australian gas supported Australian industry and jobs first.

“For energy‑intensive industries in the North and North West, access to reliable and competitively priced gas is not a ‘nice to have’; it’s essential to keeping smelters, refineries and manufacturers operating and people employed,” Ms Brumme said.

The Federal Government said the 20 per cent domestic reservation would put strong downward pressure on domestic gas prices, shield industry and households from global price volatility, and ensure Australia’s energy security by avoiding potential gas supply shortfalls.

Industry and Innovation Minister Tim Ayres said it was a key plank of the plan to build Australia’s energy sovereignty, alongside growing fuel reserves and supporting more fuels made in Australia to stay in Australia.

“A Future Made in Australia is about securing Australia’s industrial capability – and secure and affordable gas is critical to strong local manufacturing firms,” he said.

“Gas isn’t just an energy source for heavy industry – it can also be a feedstock – and putting downwards pressure on price through the reservation is particularly important for those facilities.”