The Clean Energy Finance Corporation (CEFC) will be allowed to invest in carbon capture and storage (CSS) technologies after a legislative prohibition was removed today.
Federal Minister for Environment and Energy Josh Frydenberg announced the proposed changes to the CEFC Act.
“Access to finance is one of the barriers to investment in CCS and a change to CEFC legislation will provide a significant signal of support and reduce risk for potential investors,” Mr Frydenberg said.
“This is the latest demonstration of the Government’s commitment to a technology neutral, non-ideological, approach to national energy policy.
“Removing the prohibition will allow the CEFC to support a wider range of low emissions technologies and thereby reduce emissions at lowest cost.”
Mr Frydenberg said CSS technologies could reduce emissions by up to 90 per cent.
“CCS technology has been acclaimed by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) as critical to enabling the world to meet its emission reduction targets,” he said.
“CCS is a proven technology being deployed globally with 17 large-scale commercial CCS facilities already in operation storing around 30 million tonnes per annum of carbon dioxide.”
The CEFC released a statement today in response to the announcement. It said it was committed to transforming clean energy investment to lower Australia’s carbon emissions.
“Under the CEFC Act, our investments include renewable energy, energy efficiency and low emissions technologies,” the statement said.
“To date, we have invested more than $3.3 billion in eligible clean energy projects, with a total project value of $8.3 billion, while also delivering a positive return for the taxpayer.
“In addition to potential applications in the power sector, CCS can also be used in the industrial sector to capture emissions from chemical processes, as well as fugitive emissions.
“There are some industrial processes for which there are currently very few alternatives to reducing emissions, making CCS an important technology if these sectors are to achieve deep cuts in emissions.”
In Australia, there are several industrial pilot CCS projects either in operation or at a planning stage, including the Gorgon LNG project in Western Australia which will soon become one of the world’s largest CCS projects.
Energy Networks Australia welcomed the decision to “level the playing field”.
CEO John Bradley said permitting investments in Carbon Capture and Storage (CCS) technologies by the fund was consistent with a “technology neutral” regulatory framework for achieving carbon abatement.
“Australia’s economy is inherently carbon intense and it needs all viable technology options on the table to achieve deep decarbonisation in line with the Paris aspiration of zero net emissions by the second half of the century,” Mr Bradley said.
“CCS has the potential to support long-term carbon abatement in major industries with significant carbon emissions, like metal manufacturing, fertilisers and advanced manufacturing.
“CCS technologies are not ‘pro-coal’, they are just one of the potential tools that could help Australia to efficiently achieve carbon abatement at scale, while maintaining energy security and affordability.”
Opposition leader Bill Shorten responded to the news via Twitter with a simple: “You’ve got to be kidding”.
Legislation will be introduced into Parliament on Wednesday, May 31.