Australia’s prime minister has launched a billion Australian dollar ($738m) investment fund to fast-track emerging low emissions technologies, including carbon capture and storage, as he bolsters his government’s green credentials ahead of elections due within months.
Prime Minister Scott Morrison expects the private sector will at least match his government’s 500 million Australian dollars ($369m) contribution to the fund.
“Australia can become a world leader in creating low-emissions technology that is both affordable and scalable,” Morrison said in a statement on Wednesday.
The ruling conservative coalition wants the fund to be administered by the Clean Energy Finance Corp, a government-owned green bank established to increase investment in the clean energy sector.
But that would require a change in the law because the corporation can invest only in technologies that have proved to work in the short term, such as wind and solar. It cannot invest in more experimental technologies with longer-term potential like carbon capture and storage.
The new fund would address a gap in the Australian market in which small, complex, technology-focused start-ups can be considered “too risky to finance”, the statement said.
Industry, Energy and Emissions Reduction Minister Angus Taylor said the law change was needed for Australia to achieve its net-zero emissions target by 2050.
“There’s lots of people, when it comes to climate policy, who want to wipe industries out,” Taylor told Australian Broadcasting Corp.
“They say we want to see resources industries gone or agriculture impacted. That’s not where we start. We start at the solution: low emissions technologies that can bring down emissions,” Taylor added.
The centre-left opposition Labor Party hinted at the possibility of supporting the legislation in the Senate if the government was promising new money and not taking investment away from other areas of clean energy production.
“If this is genuine new money, then we’ll look at the detail” of the proposed legislation, Labor’s spokesman on climate change and energy Chris Bowen said.
The government’s new policy to reduce Australia’s carbon emissions comes after Morrison was widely criticised at the United Nations climate conference in Glasgow, Scotland, for failing to set more ambitious targets for 2030.
Australia aims to reduce emissions by 26 percent to 28 percent below 2005 levels, while other countries have made steeper commitments.
With Australian elections due by May, Morrison on Tuesday announced a 250 million Australian dollars ($185m) plan that he hopes would result in 30 percent of new passenger vehicle and light commercial truck sales in Australia being battery electric or plug-in hybrid electric by 2030.
Less than 2 percent of new vehicles sold in Australia are electric, and the transport sector is a major reason why Australia, on a per capita basis, is one of the world’s worst greenhouse gas emitters.
Australia is also one of the world’s largest exporters of coal and liquid natural gas.
Carbon capture and storage involves capturing carbon at the source, concentrating it and then injecting it deep underground.
Richie Mercian, a former Australian government representative on climate change, said the new fund would “support fossil fuel technologies like carbon capture and storage” instead of phasing out fossil fuels.
Australia is home to the world’s largest carbon capture and storage facility at Chevron’s Gorgon natural gas project on Barrow Island off its northwest coast. About 60 such facilities are operating or under construction around the world.
The Gorgon project has stored more than 5 million tonnes of carbon emissions since it started operating in 2019.
But Chevron announced in July it had failed to meet its target of storing at least 80 percent of the carbon produced by the facility, or approximately 4 million tonnes a year.
Peter Milne, a former oil and gas industry engineer, estimated that Chevron had injected only 30 percent of the carbon it had promised.
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