The Federal Government is reshaping the nation’s approach to reducing carbon emissions, turning the focus to backing a select few technologies and supporting heavy industry.
- Energy Minister Angus Taylor will announce the Government’s new energy policy at the National Press Club on Tuesday
- The new plan will focus on select technologies and involve an advisory panel
- In his speech, Mr Taylor will state “Australia can’t and shouldn’t damage its economy to reduce emissions”
Energy Minister Angus Taylor on Tuesday will release a Technology Investment Roadmap that will guide $18 billion of Commonwealth investments towards five priority technologies: hydrogen, carbon capture and storage, soil carbon, storage options and ‘low-carbon’ steel and aluminium production.
It’s a reversal of the Coalition’s last attempt to set an energy policy, the Turnbull Government’s technology-neutral National Energy Guarantee (NEG).
The NEG would have let the market determine how to meet targets on reliability and emissions reduction, while the Technology Investment Roadmap will fund particular approaches to helping industry reduce their emissions.
The roadmap includes price goals for each of the five priority areas, aiming to reach the point where the cost of the technology is competitive with existing alternatives.
For example, the Federal Government wants hydrogen production to cost less than $2 per kilogram by 2030, regardless of whether it is produced using renewable energy or fossil fuels.
For soil carbon, the goal is to reduce the cost of measurement to less than $3 per hectare per year, which would be a 90 per cent reduction.
The plan is reliant on the Senate passing legislation that changes the investment rules of the Australian Renewable Energy Agency (ARENA), the Clean Energy Finance Corporation (CEFC) and the Clean Energy Regulator (CER), which the federal government announced last week.
The Federal Government also wants fast-track approval of methods to reduce emissions that can be funded by the Emissions Reduction Fund — in particular, soil carbon and carbon capture and storage.
Mr Taylor will outline the details in a speech at the National Press Club, where he is expected to re-enforce the Coalition’s aversion to putting a price on greenhouse gas emissions.
“You either suppress emissions intensive economic activities — usually through some version of taxation — or you improve them,” Mr Taylor’s speech notes show.
“There is no third way. Australia can’t and shouldn’t damage its economy to reduce emissions.”
He will state that this roadmap will “drive around 130,000 jobs” and “avoid 250 million tonnes of emissions [annually] by 2040”.
The Technology Investment Roadmap is the plan the Federal Government will present as Australia’s long-term strategy for reducing emissions to the next round of global climate change talks, which was delayed this year because of the coronavirus pandemic.
The Government’s energy hierarchy: Four categories of technology
While the Government will focus almost all of its efforts on the five priority low-emissions technologies, the roadmap includes a hierarchy of other technological approaches to reducing emissions.
The Government will look to remove barriers to “emerging and enabling technologies”, such as energy efficiency and electric car charging infrastructure.
“Emerging and enabling technologies will be included in the mandates of our technology investment agencies,” Mr Taylor will tell the National Press Club.
“Over time they may become priorities for us or they may drop off all together.”
There will be a “watching brief” approach to prospective technology being developed overseas, like small modular reactors and direct air capture.
On the bottom rung is solar, wind, coal and gas, all of which have been categorised as “mature technologies” that the Government will only invest in when there is a clear market failure or the where it would save jobs.
The Federal Government last week threatened to develop a gas power plant in the Hunter Valley to counter the closure of the Liddell coal-fired power station in 2023, but the Prime Minister later toned down the ultimatum.
Big business on advisory panel to shape technology investment roadmap
Each year, the Energy Minister will deliver a “Low Emissions Technology Statement” to Federal Parliament setting out the challenges, opportunities and priorities in reducing carbon emissions.
To advise the minister, a permanent advisory council will be formed with representatives from government agencies and big business.
It will include the chairs of ARENA, the CEFC and the CER, along with the Chief Scientist Alan Finkel, CSIRO chair Drew Clarke and Department of Infrastructure Deputy Secretary Jo Evans.
They’ll be joined on the advisory council by four business leaders — Macquarie Group chief executive, Coca-Cola Amatil Managing Director, Australian Gas Infrastructure Group chief executive, and the author of a government report on emissions — and former president of the Business Council of Australia — Grant King.