The Hon Angus Taylor MP, Minister for Industry, Energy and Emissions Reduction, Media Release, 2 November 2021
The Morrison Government welcomes the final investment decision taken by joint venture partners Santos and Beach Energy to establish Australia’s first carbon capture and storage (CCS) hub at Moomba, South Australia.
The $220 million Moomba CCS hub is the first project of its kind to be registered under the Government’s Emissions Reduction Fund (ERF).
Minister for Industry, Energy and Emissions Reduction Angus Taylor said a financial commitment to building and operating the nation’s first CCS hub was a major milestone for the technology in Australia.
“This investment has been enabled by the Emissions Reduction Fund, which can now recognise and credit emissions reductions achieved by large-scale carbon capture and storage projects,” Minister Taylor said.
“This is the first time a national government will award tradable, high-integrity carbon credits to large-scale projects that capture and permanently store carbon underground.”
The ERF has already delivered more than 100 million tonnes of abatement, and this will increase rapidly over the next decade.
Under the ERF, projects can sell carbon credits to the Government or on the fast-growing voluntary private market, which grew 42% between 2019-20 and 2020-21. This growth shows no signs of slowing down, with Australian voluntary demand expected to comfortably exceed 1 million tonnes in 2021-22.
Minister Taylor was joined by Santos CEO and Managing Director Kevin Gallagher at the announcement at COP26 in Glasgow.
Mr Gallagher said: “The Australian Government’s focus on new low-emission technologies through the Emissions Reduction Fund is unlocking and incentivising private investment in Australia, allowing us to capitalise on our natural assets and has the potential to become a carbon storage superpower.
“Moomba CCS is the first project to hit the go button, with more to come.”
The project is expected to be operational by 2024 and will reduce emissions from gas production at Moomba by 70 per cent, permanently and safely storing 1.7 million tonnes of carbon dioxide underground each year.
CCS is a priority under the Government’s Technology Investment Roadmap and the new ERF method will incentivise emissions reductions from a range of energy-intensive sectors including clean LNG production, which currently accounts for around 10 per cent of Australia’s emissions.
Analysis by the International Energy Agency (IEA) shows that half the global reductions required to achieve net zero will come from technologies that are not yet ready for commercial deployment.
The IEA and IPCC both regard carbon capture technologies as essential to achieve the goals of the Paris Agreement.