The Australian government on June 29 began public consultations for including Carbon Capture and Storage, or CCS, projects in the national carbon market, in a move that will open a pathway for the technology to be used for claiming emissions reductions.
Currently, Australia does not have a formal nationwide emissions trading system, but it does have a nascent carbon market under which the Emissions Reductions Fund, or ERF, allows certain types of projects to generate carbon credits called Australian Carbon Credit Units, or ACCUs.These ACCUs can be sold to the Australian Government, or to companies, State governments and other private buyers. The government authority, Clean Energy Regulator, is the major buyer for ACCUs, but demand for carbon reductions from businesses has risen in recent years, the government website said.
The types of project that can generate ACCUs include capture and destruction of coal mine fugitive emissions, reductions in emissions-intensity of transport, capture and combustion of landfill gas and agricultural waste, reducing livestock emissions, expanding carbon sink plantings, reforestation, etc.
The newly proposed methodological framework will enable CCS projects to generate ACCUs.
The move follows the Australian Government's first Low Emissions Technology Statement in 2020 that identified CCS as one of Australia's priority low emissions technologies, after which the Minister for Energy and Emissions Reduction tasked the Clean Energy Regulator with developing a CCS method under the Emissions Reduction Fund, it said in its consultation.
A CCS project captures greenhouse gas emissions that would otherwise have been released to the atmosphere and transports them for injection into an underground geological formation for permanent storage, the government added.
It said the technology can underpin new low emissions industries such as hydrogen and also reduce emissions in hard to abate sectors such as cement production and steel manufacture. The government also sought advice on the adverse impacts arising from a CCS project under the new proposal.
The consultations close on July 27.
Significance of CCS for AustraliaCCS is emerging as a key enabling technology for industries and countries that still rely on fossil fuels as an important part of their economy or energy mix, such as coal mining or blue hydrogen production, as these industries cannot be shut overnight.
"All technology, including hydrogen and CCS, should be on the table to help reduce emissions, so this is a good move," Andrew McConville, chief executive of Australian Petroleum Production and Exploration Association, said in a statement.
"Just as government investment in renewables has fast tracked projects, this could do the same and create thousands of jobs in the process. There is no silver bullet in taking climate action and all options need to be considered to help Australia reach net zero," he said.
McConville said Australia has a "natural competitive advantage" to implement CCS. This was partly due to its geology and "needs low-cost carbon abatement to maintain its position as a leading energy exporter" and "deliver competitive, large-scale abatement for existing industries and new industries such as hydrogen and ammonia."
