SYDNEY/CANBERRA - A Glencore carbon capture and storage project in eastern Australia cannot go ahead because it could irreversibly harm groundwater used by farmers, a state government said on Friday, adding that it would also block similar projects.

Global commodities giant Glencore said the decision by Queensland was the result of misinformation and political opportunism and had effectively outlawed carbon capture and storage projects in the state.

The company's pilot project aimed to pump 330 000 metric tons of liquefied carbon dioxide from a coal-fired power plant in southern Queensland into an aquifer 2.3 km underground.

The project "is not suitable to proceed due to potential impacts on groundwater resources," the state's environment department said in a statement.

Farm groups had protested that it risked poisoning part of the Great Artesian Basin, a network of groundwater deposits spanning much of eastern Australia, supporting agriculture and communities.

The proposed site was not a contained aquifer and the carbon dioxide "could migrate, likely causing irreversible or long-term change to groundwater quality and environmental values," the environment department said.

Such changes could include greater concentrations of contaminants such as chloride, sulphate, lead and arsenic, it said, adding that its decision made clear that other carbon storage projects in the Great Artesian Basin would not be viable.

DISAPPOINTING

Governments including Australia's say carbon capture and storage (CCS) is needed to achieve the world's net-zero goals and contain global warming. Its rollout has been slow but is speeding up.

Glencore said its proposal was scientifically robust, targeted an area with unused, low-quality groundwater and the carbon dioxide was extremely unlikely to spread significantly.

"The decision is disappointing and comes after a damaging misinformation campaign and political opportunism," the company said in a statement.

"The Queensland government has now effectively banned carbon capture and storage projects in Queensland," it said. "It's now up to the Queensland government to explain how it's going to meet its ambitious emissions reductions targets."

Glencore did not say whether it would appeal the decision.

The project would have captured 2% of the emissions of the Millmerran plant power plant but could eventually have stored 90%, the company said.

Queensland farm group AgForce praised the decision but said more protection was needed for the basin and it would push for more federal scrutiny for projects like Glencore's.

Australia has one active CCS project, Chevron's Gorgon, on an island off the northwest coast. Two more are under construction and 14 are in development, according to the Global CCS Institute. Most target offshore storage.

Glencore's project is managed by a subsidiary called Carbon Transport and Storage Corporation (CTSCo). Japan's Marubeni and J-POWER  each committed A$10-million to it in 2022.