Carbon Abatement Technologies
SACOME calls on the State Government to implement policies that incentivise the development of carbon abatement technologies such as Carbon Capture and Storage (CCS).
Commercial CCS is a viable pathway to reducing emissions and positions Australia to continue as a leading energy exporter and manufacturer of energy-intensive materials.
The International Energy Agency’s (IEA’s) Sustainable Development Scenario requires a hundredfold increase in CCS between now and 2050 to achieve the world’s climate goals, going from 40 million tonnes of CO2 stored each year in 2021 to 5.6 billion tonnes in just 30 years’ time[i].
SACOME member company Santos’ Moomba CCS project has the potential to be a large-scale carbon sink for power generators and other industries in eastern and southern Australia. Santos has entered into a joint venture partnership with Beach Energy to proceed with its Moomba carbon capture and storage project, with start-up expected in 2024.
Santos has indicated that it plans to store 1.7 million tonnes of carbon dioxide per year from the Moomba Gas Plant. This decision is a critical step in decarbonising natural gas on our path to new low-emissions and clean burning fuels such as hydrogen.
Consistent with our previous pre-Budget submissions, SACOME calls for CCS incentives to be afforded the same priority as hydrogen initiatives.
This necessarily involves consideration of the impact of a CCS tax as proposed in draft Petroleum and Geothermal Energy Amendment Bill – regardless of its final design – and the signal it sends to the market and how it operates in the context of national emissions reduction targets. If approved by Government, South Australia would be an outlier in disincentivising the green transition which is in stark contrast to countries like the United States which is offering a tax credit of $85 for each metric ton of CO2 captured and stored.
It is SACOME’s strong view that a CCS royalty is poor policy and coupled with proposed reforms to the Safeguard Mechanism, will deter companies from undertaking long term abatement projects.