CCS a secondary issue to new Australian climate plans

The Labor party's federal election victory in Australia cuts direct funding for carbon capture and storage (CCS) for the nation's gas industry, although it leaves it as a technology option to abate carbon in the short to medium term.

The new Labor government, which took power from the Liberal-National coalition on 21 May, has a 2030 emissions reduction target of 43pc of 2005 levels that is deeper than the 26-28pc under the previous government. It plans to do this by lowering the amount of large-scale carbon emitters, including energy and resource companies, over time. It is more doubtful on how these emitters achieve this than the coalition, which was prepared to fund CCS development.

It is unlikely that the Labor government will keep the coalition's funding pledges for over A$1bn (708mn) to CCS for LNG and hydrogen projects, with a preference for green hydrogen projects over blue hydrogen with associated CCS. Green hydrogen refers to hydrogen made from renewables, while blue uses gas.

But Labor's more ambitious 2030 emissions targets could increase the impetus for gas and coal firms operating in Australia to invest directly in the technology to cut baseline emissions below current levels. This is likely to lead to a smaller scale CCS industry than one that is directly funded by government to underpin a growing blue and grey hydrogen industry. Labor climate spokesperson and former shadow climate minister Chris Bowen has been scathing about the prospects of using CCS in the production of blue hydrogen, while he pledged to hold the Cop 29 UN summit in Australia.

The country's upstream lobby group the Australian Petroleum Production and Exploration Association has urged the new Labor government to recognise that gas is important in the decarbonised energy mix, in which it believes CCS and hydrogen related technology will be key.

New prime minister Anthony Albanese had only appointed four ministers — treasurer, foreign, finance and employment — on 23 May before leaving for Japan for the Quadrilateral security dialogue, or Quad group meeting, with the leaders of the US, India and Japan.

Albanese highlighted the need to take action on climate change above security in his speech to the opening of the Quad meeting in Tokyo. "The [Pacific] region is looking to us to work with them and lead by example," he said. "That's why my government will take ambitious action on climate change."

Canberra has been shaken by China's growing influence in the Pacific, most recently by Beijing's defence co-operation agreement with the Solomon Islands, with Albanese seeing climate as a major issue in reasserting Australia's influence in the region.

Labor is still two parliamentary seats short of being able to govern without the support of minor parties, which are dominated by those elected on a platform of quick climate action.

By Jo Clarke