The Turnbull Government will remove a legislative prohibition on the Clean Energy Finance Corporation (CEFC) to allow it to support investment in carbon capture and storage (CCS) technologies which can reduce emissions by up to 90 per cent.
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.
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.
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.
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. In Australia, the Gorgon LNG project in Western Australia will soon become one of the world’s largest CCS projects when it begins sequestering up to 4 million tonnes per annum in carbon dioxide in the coming year.
There are also significant opportunities for the application of CCS technologies outside of the energy sector. The International Energy Agency has stated that CCS is the only option available to significantly reduce emissions from some major industrial processes, such as iron and steel production, cement production, and natural gas processing.
The CEFC’s ability to invest in CCS technologies will complement other low emissions investment by the Federal Government including more than $3 billion worth of wind, solar and storage projects.