Australia

Brief description:

Energy and climate change - policy and progress

Emissions

According to data from Australia’s National Greenhouse Accounts, the country emitted a total of 537 million tonnes of CO2 equivalent during 2009. Compared with 550Mt of CO2e emitted during 2008, this represented a drop of 2.4%. Electricity generation accounted for 202Mt, or 38%, of all emissions. The total figure for all energy production and consumption, including transport and fugitive emissions, was 411Mt, or 76.5%.  Industrial processes accounted for 27Mt, or 5%, while agriculture was responsible for 84Mt, or 15.6%. More recent figures from the government show that, in the 12 months to March 2010, emissions were 542Mt, a decrease of just 1% compared with the previous 12-month period. The drop has been linked to relatively low emissions in key sectors, such as electricity generation and steel production, due partly to the global economic slowdown. 

UNFCC GHG emission information

 

 


Challenges

Australia is responsible for about 1.5% of the world’s fossil fuel-based carbon emissions, placing it 14th in world rankings. However, its reliance on coal for power generation means a very high amount of energy-related carbon emissions per capita of population. Energy suppliers are keen to continue exploiting Australia’s secure and accessible sources of coal – in particular, brown coal, which generally produces higher CO2 emissions that black coal – and are therefore backing moves to develop and utilise commercial-scale clean coal technologies, such as carbon capture and storage.

Australia is also tapping rich reserves of natural gas – for example, the massive Browse basin and Gorgon LNG projects – which would potentially emit high volumes of CO2. The development of large-scale CCS infrastructure has therefore formed part of initial plans for these projects. 

Government commitments

In a major shift in policy, the Australian government ratified the Kyoto Protocol in March 2008 and issued its initial report one year ahead of the deadline set by the United Nations. Its Kyoto target is 108% of 1990 levels by 2008-2012, which it currently seems to be on track to achieving. The government has also set an overall target of lowering emissions by up to 25% of 2000 levels by 2020, and reducing emissions per capita by nearly one third to one half.

The country’s National Greenhouse Accounts form the basis of government policy on climate change, and help set emissions targets in line with commitments made under the United Nations Framework Convention on Climate Change (UNFCCC). It also tracks progress against targets within the Kyoto Protocol.

In 2010, the government made a commitment to establish emissions standards for power stations, with all new coal-fired power stations requiring to be built CCS ready (CCS-R). In late 2011, a draft Energy White Paper, Strengthening the Foundation for Australia’s Energy Future outlined domestic energy market reform and placed carbon pricing at the core of low-carbon technology deployment policy. A carbon pricing arrangement was brought in on 1 July 2012 – the Clean Energy Legislative Package (CELP) – which will change to an ETS scheme, linked with the European ETS scheme, by no later than 2018. As a direct result, the CCS Ready policy was abandoned. 

The Clean Energy Initiative includes government funding for low emissions technologies, such as solar and geothermal power, as well as carbon capture and storage. 

Regulatory framework

Under Australia’s federal system of government, states and territories have jurisdiction over CO2 storage onshore and up to three nautical miles offshore, while the federal government has jurisdiction from three nautical miles offshore to the edge of the country's continental shelf.

In November 2008, Australia’s Offshore Petroleum Amendment (Greenhouse Gas Storage) Act 2008 established a system for allowing and managing the transport, injection and storage of GHGs in geological formations below the areas of seabed within Australia's jurisdiction.

CCS activities in offshore Commonwealth waters and onshore Victoria, Queensland and South Australia are already regulated. Legislation is currently being developed in New South Wales and Western Australia. Federal CCS laws are based on oil and gas legislation. The Offshore Petroleum and Greenhouse Gas Storage Regulations 2011 (Commonwealth), which came into effect in June 2011, cover six linked elements, including project management, risk management and monitoring plans.

In January 2012, a new national body, the National Offshore Petroleum Titles Administrator, took over from state and Commonwealth in regulating the offshore petroleum industry. It will also be responsible for offshore GHG injection and storage projects. The Commonwealth is providing support for research into CO2 pipelines to develop cost-effective standards for pipelines that will ensure safety and security.

A cross-jurisdictional body, the CCS Working Group, have been considering how to harmonise CCS regulations across Australia, considering issues such as long-term CO2 storage liability, the use of abandoned wells and reservoirs and potential CO2 pipeline corridors.

In the state of Victoria, the Offshore Petroleum and Greenhouse Gas Storage Act 2010 comes into effect on 1 January 2012, or possibly earlier. Queensland brought in its new CCS regulations into force on 9 April 2010. Invitations to tender for areas for CCS exploration were publicised in May 2010, closing at the end of that month. Exploration permits are expected to be released by the end of 2010.

In May 2009, Western Australia's Department of Mines and Petroleum approved the development of a legal framework to cover onshore CCS - as an amendment to the existing Petroleum and Geothermal Energy Resources Act 1967. Finally, New South Wales took its position on proposed onshore CCS legislation to its public in a four-week consultation period during August/September 2010. The final legislation draft is now due before the state's parliament.

Climate change/CCS programmes and support mechanisms

National

The Australian government has introduced a series of programmes to drive forward the development and use of clean energy technologies and these are managed by the Department of Resources, Energy and Tourism as part of a national energy strategy.

The CCS Flagship Program is part of the government’s expanded Clean Energy Initiative and is intended to fast-track R&D and demonstration of CCS technologies by completing between two and four commercial-scale projects. The intention is for these to form part of 20 such projects being called for by the G8 group of nations to be operational by 2015 – with commercial use by 2020. The CCS Flagship also builds on the National Low Emissions Coal Initiative (NLECI), which is being implemented by the National Carbon Capture and Storage Council. This agency is tasked with reducing emissions from coal use and defining Australia’s CO2 storage potential, through the work of the Carbon Storage Taskforce and and the National Carbon Mapping and Infrastructure Plan. 

The NLECI itself is being backed until 2015 by the National Clean Coal Fund, which is providing financial support for R&D into low emissions coal technologies, CO2 storage sites and necessary CCS infrastructure. Industry, particularly coal and power producers, is providing an additional $1 billion in funding - including through the Coal21 fund. In addition, the National Low Emissions Coal Council (NLEC) is advising on strategies to bring forward the use of industrial-scale low emissions coal technologies, including CCS.

The Low Emission Technology Demonstration Fund (LETDF), set up by the government but with two thirds’ funding from the private sector, is backing five key projects that seek to develop low emissions technologies that will eventually be used at a commercial scale. Just one funding round was held, applications for which closed in early 2006.

On 10 July 2011, the Australian Government released the details of its new climate change plan. The new plan - entitled Securing a clean energy future - takes Australia’s target for reducing GHG emissions from 60 per cent below 2000 levels by 2050 to 80 per cent below 2000 levels by 2050. While the government acknowledges its current support for CCS development, it has not included any additional measures or funding in this plan.

In September 2012, the Australian Government announced $48 million funding for the new National Geosequestration Laboratory (NGL) at the Australian Resources Research Centre in Perth to advance CCS technologies. The centre would include research satellites, including the University of Australia's new CO2 facility.

Private sector

The private sector in Australia, and in particular, the fossil fuel and power generation industries, has made a strong commitment to facilitating the development of low emissions technologies for commercial use, and numerous companies are joint venture partners, and/or funders for projects as well as providing the sites for pilots and demonstrations. Australia has many examples of co-operation between the public and private sector, universities and research agencies including international links. The LETDF mentioned above is a key programme for the whole country.

The Australia Coal Association (ACA), an umbrella organisation for the country’s black coal producing companies, is keen to have CCS technologies operating at commercial scale. To this end, it has formed the COAL21 fund, which is fed by a voluntary levy on coal production and is expected to collect A$1 billion over the next decade to fund a CCS demonstration programme – including the development of PCC, IGCC and oxyfuel combustion technologies. COAL21 is a partnership with other industry bodies, trade unions, federal and state government and research agencies. It is administered by ACA Low Emissions Technologies Ltd (ACALET). ACA has also set up the NewGenCoal website, which provides an interface between industry and the general public.

The Peter Cook Centre, a world-class hub for research into CCS, opened in Victoria in August 2012, thanks to funding of $3 million from Rio Tinto over three years. The company also provided a further $3 million to support CO2CRC's Otway Project, as a field site for carbon storage research.

State
Australia’s state governments have set up various initiatives to boost the development and use of CCS technology:

Queensland's government continues to support CCS and has passed legislation permitting onshore storage activities under its Greenhouse Gas Storage Act. It has also adopted a CCS-R permitting condition on new coal-fired power stations. Queensland Clean Coal Council was set up under national legislation (the Clean Coal Technology Special Agreement Act 2007) to advise on funding priorities for low emission coal technology projects, including CCS, using a strict set of project selection criteria. It also aims to encourage joint investment from both the public and private sectors towards research, development and demonstration projects, and coordinates the state’s involvement in international projects. ClimateQ is the state’s revised strategy as part of national and international policy on climate change. It has set a deadline of 2020 for the move from demonstration to commercial operation of low emission technologies.

In 2008, Victoria’s Offshore Petroleum Amendment (Greenhouse Gas Storage) and Greenhouse Gas Geological Sequestration acts provided a regulatory framework for the storage of CO2 in both offshore and onshore blocks. Both acts allow Australia to offer these blocks for commercial CCS development. The state’s Energy Technology Innovation Strategy (ETIS) is a vehicle for funding the development of commercially viable low-emissions technologies. The government announced in March 2012 that it would not proceed with CCS Ready (CCS-R) regulations. 

In August 2010, the state put A$30 million towards sustainable energy R&D projects and pilot demonstrations.  Brown Coal Innovation Australia (BCIA) was set up in 2009 with $16 million funding from the state to continue the success of ETIS in funding R&D into new and adapted low-emissions technology suitable for Victoria’s brown coal reserves. It is an independent entity with a remit to co-invest in projects with industry and research agencies.

The state of New South Wales (NSW) passed its Clean Coal Administration Act in 2008, which led to the setting up of the NSW Clean Coal Council and a $100 million Clean Coal Fund. Industry, research institutes and government departments are working together through the council to support R&D into low emissions coal technologies in the state, which can eventually be used at commercial scale. The council also advises government on policy, involvement in national and international research projects, and the allocation of funding under the Clean Coal Fund over a four-year period.

Western Australia is in the process of establishing CCS legislation under its Petroleum and Geothermal Energy Resources Act. It has already passed the Barrow Island Act which establishes a ministerial approval process for the Gorgon project. Its Office of Climate Change was established in 2007 with responsibility to develop policy and strategy to tackle the economic, environmental and social impact of climate change. This includes the support and promotion of clean energy technologies.  Its $30 million Low Emissions Energy Development Fund (LEED) has held three rounds – the third closed in early 2010 – with a fourth round open for applications for funding in 2011.  To date, the successful projects have involved bio energy and wave energy, as the state’s natural resources suit the development of  geothermal, bioenergy, wind, wave, tidal and solar energy technologies.

CCS agencies and initiatives, including R&D

Geoscience Australia is a key national advisory and research agency, which covers many different activities and issues, including improved resource management, environmental protection and the development of a sustainable energy supply. It provides data and information for petroleum exploration and the geological storage of carbon dioxide within Australia's offshore areas. It also advises on potential hazards and marine zone management.

The Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) is a leading research body that focuses on R&D into CO2 capture and sequestration technologies. It is a joint venture made up of participants from industry and government – state, national and international – universities, and research agencies from around the world. It is funded by the government’s Cooperative Research Centres Program and other national programmes, as well as by CO2CRC participants and the wider industry. It is currently engaged in a number of key demonstration projects.

CSIRO is Australia’s national science agency, which is engaged in many different areas of research and development through ten national “flagship” programmes. Its Energy Transformed flagship is researching and testing feasible low-emission energy solutions, such as renewables and CCS technologies, in partnership with industry. In April 20121, CSIRO reported good results from post-combustion capture trials mainly taking place at the Loy Yang and Tarong power plants in New South Wales and Queensland, respectively. The agency said results showed the technology was now "technically available to industry", although commentators said commercial-scale use was still some way off. 

International co-operation

In April 2009, the Global CCS Institute was launched. It was initiated by the Australian government, which provides annual funding of A$100 million, to establish an international framework for the development, promotion and monitoring of CCS. It is already backed by more than 20 national governments and over 80 leading companies, NGOs and research agencies. The institute was one of the proposals of Australia’s National Low Emissions Coal Initiative. In Spring 2010, the institute published its interim report on the status of large-scale CCS projects worldwide. Download it from here.

The Asia-Pacific Partnership on Clean Development and Climate was set up in 2006 comprising a membership of the national governments of Australia, India, Japan, China, South Korea, Canada and the US. Its eight action plans included the Action Plan on Cleaner Fossil Energy, which identified 13 project proposals for exploring clean coal and gas technologies. Australia chaired the partnership and was the main financial contributor, pledging A$200 million over 5 years towards the so-called AP6 projects – the Callide Oxyfuel demonstration in Queensland is considered a flagship project. It concluded its work in early 2011, with a number of its projects continuing and/or being transferred to other agencies.

In July 2012, the Ministry for Resources and Energy launched the $1.1 million Australia-China Clean Coal Technology Partnership Fund, to accelerate the use of low emissions coal technologies, including CCS. The fund is part of the Australia-China Joint Coordination Group on Clean Coal Technology, which has a $20 million grant from the Australian government.

Storage potential

The National Mapping and Carbon Storage Taskforce was set up by the government, as part of the NLECI, to develop a “roadmap” for prioritising the development of suitable storage sites and pipeline infrastructure to support the industrial-scale use of CCS technology throughout Australia. Its report in September 2009 concluded that CCS is technically viable if current geological and engineering activities are fast-tracked over the next decade and incentives are developed for commercial investment in projects. The taskforce believes that more than 120 million tonnes per annum could be mitigated by ten emissions "hubs". It also suggested that eastern Australia has aquifer storage capacity of 200 Mtpa, for between 70 and 450 years, and the west of Australia has the potential for storing 100 Mtpa for between 260 and 1120 years.

The A$12 million GEODISC Project ran from 1999 until 2003. It was carried out within the Australian Petroleum Cooperative Research Centre (APCRC) and examined over 100 potential geological storage sites. It identified an ultimate storage capacity of more than 1600 years of Australia’s total current emissions. It also developed a methodology for comparing the suitability of potential sites, taking into account a range of factors such as storage volume, security and their proximity to large CO2 emitting sources.

Australia launched the $54.3 million NSW CO2 Storage Assessment Program in July 2012 after a deal was reached between Geoscience Australia, the New South Wales Ministry for Resources and Energy and the Australian Coal Association. The project, which is part of NLECI (see above), will assess storage opportunities in NSW.

More information

Government decision on Kyoto Protocol, 3 December 2007

Latest government tracking of Kyoto/2020 targets

The World Bank Carbon Finance website

Emissions trading schemes by country

Offshore Petroleum Amendment (Greenhouse Gas Storage) Act 2008

Search for the latest government press releases  








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