Funding carbon capture could reduce emissions, but political interference is a risk
Technology neutrality would include carbon capture and storage projects that take emissions from gas and coal plants out of the air and store them underground. But Professor Jotzo said the attractive economics of renewable projects have seen wind and solar power become the “default for new investments in Australia’s energy supply”.
However, he warned unless “investment choice is not politicised” there would be a risk that carbon capture received “too large a share of funding”.
Kevin Gallagher, chief executive of gas company Santos, said carbon capture and storage “can facilitate the fastest route to a hydrogen fuelled economy”.
“Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen,” Mr Gallagher said.
Earlier this month Chief Scientist Alan Finkel echoed Professor Jotzo’s assessment when he said electricity generated by solar and wind will drive Australia’s nascent hydrogen boom in the “short to medium term”.
However, he said it would be irresponsible not to investigate gas-fired hydrogen backed with carbon capture as a potential alternative to renewable power.
Institute for Energy Economics and Financial Analysis director Tim Buckley said carbon capture and storage technology for fossil fuels was “irrelevant” under the Paris Agreement, which meant Australia had just “30 years to transform its industrial complex”.
Carbon capture and storage initiatives have received more than $1 billion in government support in the past twenty years, according to the Australia Institute.
“Our leaders should show leadership to transform the economy towards industries of the future, not the fossil fuel incumbency which have had decades to prove their business model,” Mr Buckley said.
The King review’s proposed legislative change would fundamentally alter the agencies that were established to promote the renewable wind and solar energy generation.
Mr Taylor has not committed to pursue legislative changes in Parliament and may settle for new regulations that permit the CEFC and ARENA to fund projects that merely facilitate carbon capture.
For example, in relation to the high-emission process of gas-fired hydrogen production, regulation changes would permit the CEFC or ARENA to fund projects that boost domestic demand for hydrogen such as industrial heating in manufacturing, or blending hydrogen into the existing gas network.
Mike is the climate and energy correspondent for The Age and The Sydney Morning Herald.