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Gas and clean energy gets federal funding

30th March 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The federal government has set aside A$1.3-billion of new investment in the 2022/23 Budget to maintain energy security, keep downward pressure on energy prices while reducing emissions.

Minister for Industry, Energy and Emissions Reduction Angus Taylor said the measures would further support affordable, reliable and secure energy and help Australia reach its target for net-zero emissions by 2050, without imposing new taxes or financial burdens on households, businesses or industry.

The investments will include A$300-million to support low emissions liquefied natural gas (LNG) and clean hydrogen production at Darwin, together with associated carbon capture and storage (CCS) infrastructure. Darwin is positioned to become one of the world’s leading low-cost clean energy hubs, with access to excellent onshore and offshore natural gas and greenhouse gas storage resources, including the Beetaloo and Petrel basins and the Barossa and Bayu-Undan fields.

A further A$247.1-million will go to support increased private sector investment in low emissions technologies including hydrogen, the continued development of a hydrogen Guarantee of Origin scheme, while A$200-million will be invested to increase onshore processing and value-add of iron-ore exports, to support low emissions steel production in Indo-Pacific customer countries like Japan and Korea.

A$200-million will go to enhance Australia’s supply chain security through new low emissions manufacturing facilities, using hydrogen and hydrogen-derivatives like ammonia, as well as carbon capture utilisation and storage, in the Pilbara region, with a further A$148.6-million to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia.

The Budget also included a A$100-million investment to de-risk private sector investment in firm generation and grid infrastructure to increase system strength and capacity in the Pilbara region, A$100-million to support pre-final investment decision activities and early works to make the Port of Newcastle ‘hydrogen ready’, and A$50.3-million to accelerate the development of priority gas infrastructure projects consistent with the Future Gas Infrastructure Investment Framework and support investment in CCS pipeline infrastructure.

Taylor said with the Budget measures, the government had committed more than A$22-billion of public investment in low emissions technologies by 2030.

“These measures in the 2022/23 Budget support the government’s Modern Manufacturing Strategy, Australia’s Long-Term Emissions Reduction Plan, the Technology Investment Roadmap and Low Emissions Technology Statement, National Hydrogen Strategy and Future Fuels and Vehicles Strategy.

“Since 2019/20, the government has committed more than A$16.5-billion to new initiatives that support industry and manufacturing, gas, energy and emissions reduction measures.”

The Australian Petroleum Production and Exploration Association (Appea) said on Wednesday that the Budget had reaffirmed the long-term role that the oil and gas industry would play in the Australian economy and its lower emissions future.

“As noted by the Treasurer in his 2022/23 Federal Budget speech, Australia is on a pathway to net-zero emissions by 2050,” said Appea CEO Andrew McConville.

“Measures such as expanding the patent box concession for low emissions technology innovations, A$300-million additional funding to support low emissions LNG, hydrogen production and associated CCS infrastructure can help us continue to contribute to that pathway,” he said.

“Additionally, improvements to environmental regulation and planning for new infrastructure are all important to facilitating ongoing investment that will deliver more secure supply and cleaner energy.”

McConville said, also, Appea recognised the need for the government to focus on inflationary pressures, cost of living and housing affordability.

“However, there are some practical changes that would have further cemented Australia’s role as an energy leader by helping to attract global capital and capitalise on our competitive advantage.

“We would like to have seen temporary investment allowances announced previously to be expanded in scope and be made a permanent feature of the taxation landscape as part of a longer‑term reset of investment policy. This would have complemented our own investments and benefited the economy more broadly.

“Incentivising investment can stimulate growth in capital availability, wages, and GDP in the same way as a company tax cut, while also raising national income. We will continue to work with whoever is in government to get the settings right to ensure Australia is best placed to maximise our competitive advantages in energy security and decarbonisation,” he said.

The industry announced investments of more than A$27-billion last year in new Australian supply, technology and decarbonisation initiatives, McConville pointed out.

“The return on our previous investments are clear to see. The industry is forecasted to contribute A$76-billion in oil and gas exports for 2021/22 and the Budget papers also show government receipts from the Petroleum Resources Rent Tax being have been revised up by A$1-billion in 2022/23, and by A$4-billion over the four years to 2025/26 and this strong contribution is expected to continue.

“This Budget shows gas is being recognised as central to Australia’s cleaner energy future as the industry decarbonises to net zero by 2050 while ensuring national energy security.”

The Queensland Resources Council (QRC) has meanwhile welcomed the government’s commitment to developing a reliable supply of domestic gas for Australian manufacturers which will help lower domestic gas prices and make it easier for manufacturers to secure long-term supply agreements.

“It’s great to see four of the seven gas infrastructure projects identified as critical by the federal government are in Queensland, which is indicative of how much heavy lifting our producers have been doing to increase Australia’s domestic gas supply,” QRC CEO Ian Macfarlane said.

“In these times of growing geopolitical uncertainty, there’s tangible value in having local supply chains, and having a strong domestic manufacturing sector will help insulate the Australian economy from the supply risks associated with imports.”

Macfarlane said the federal government’s new gas infrastructure investments fit in well with the Queensland government’s existing domestic gas tenures to accelerate the production and supply of domestic gas in Queensland.

“The QRC congratulates both governments for working strategically to deliver a reliable and consistent supply of domestic gas for Australian manufacturing,” he said.

“The funding for feasibility work on pipelines to carry carbon dioxide from Gladstone to secure storage sites inland in the Surat and Cooper basins is also welcome news.

“This will accelerate opportunities to reduce emissions associated with hydrogen production and other new economy manufacturing opportunities in Gladstone by safely storing away the carbon dioxide.

“Leveraging Queensland’s energy expertise to develop these future sources of clean energy will enable downstream economic growth opportunities right across the Australian economy.”

Edited by Creamer Media Reporter

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