ARENA to fund industrial emitters as Labor, Greens try to protect renewables mandate

Federal energy and emissions reduction minister Angus Taylor will move to see off Labor and Greens attempts to block reforms to a key government clean energy funding body that would see funds originally allocated for renewable energy technologies redirected to industrial emitters and resources projects.

Both Labor and the Australian Greens have tabled ‘disallowance’ motions that would cancel out new regulations created by federal energy and emissions reduction minister Angus Taylor which would significantly expand the functions of the Australian Renewable Energy Agency (ARENA), including for carbon capture and storage projects and ‘blue’ hydrogen projects using fossil fuels.

The disallowance motions are expected to be blocked by the Morrison government, which holds a majority in the House of Representatives, and Taylor is expected to bring on a vote on the Labor and Greens motions on Tuesday afternoon.

The shadow minister for climate change and energy, Chris Bowen, who moved the Labor motion, said  the Morrison government had tried to undermine the work of ARENA since its establishment.

“The Liberal and National parties have been attacking ARENA since before even they were elected. They want to water down ARENA’s mandate, they’ve tried to abolish it, and having failed to abolish it, they want to water it down,” Bowen said.

“We are not going to give that blank cheque for somebody with an appalling track record on renewables like Angus Taylor, we simply won’t be doing that. We’ll be voting and moving in the House and the Senate to disallow this regulation.”

The government must bring on a vote in parliament on the disallowance motions. If the motions are not voted on, they will pass by default after 15 sitting days and ARENA would revert back to its old functions that are limited to providing funding support for renewable energy projects.

The controversial new regulations have been criticised by clean energy and environment groups because they will direct funding towards the Morrison government’s hand-picked technologies.

Questions have also been raised about the legal basis of the new regulations, given they are likely to be inconsistent with ARENA’s legislated purpose to support renewable energy technologies.

It follows a similar attempt to expand the mandate of the Clean Energy Finance Corporation (CEFC) to fund carbon capture and storage projects and potentially loss-making gas projects.

Clean Energy Council chief executive Kane Thornton called on the federal parliament to vote to cancel out Taylor’s regulations.

“Any watering down of the ARENA or CEFC’s investment mandate, allowing them to support higher emissions generation, exposes Australia’s taxpayers to unacceptable risk at a time when an unequivocal message is being sent around the world to back away from publicly-funded fossil fuel projects,” Thornton said.

“The Clean Energy Council urges the Australian Parliament not to support the expansion of ARENA’s role to fund ‘low-emission technologies’. There is no such thing as clean coal, and gas is not a low-emissions technology,” said Thornton.

“With billions in taxpayer funding already spent to prop up carbon capture and storage projects, Australia has very little to show for it.

“The best way to manage the declining reliability of the ageing coal fleet and scheduled plant closures is through timely investment in transmission, renewable energy generation and storage.”

Similar motions are also likely to be introduced into the federal senate, where the Morrison government does not hold an outright majority of seats – but they are still expected to fail with One Nation senators expected to provide the additional votes needed to block the motions.

The vote in parliament comes on the same day as ARENA launches its first funding round under the Morrison government’s ‘Low Emissions Technology Statement’, establishing a $43 million ‘Industrial Energy Transformation Studies Program’ to provide funding for studies into energy efficiency and emissions reduction projects across a range of sectors, including the agriculture, mining, manufacturing and gas industries.

Under the program, ARENA will offer grants of between $100,000 to $500,000 for feasibility studies and larger grants of between $250,000 to $5 million for engineering studies into projects that can reduce emissions or improve energy efficiency and can be replicated throughout their respective industry.

“We’re looking for studies into projects with significant emissions reduction potential, replicability and backed with strong corporate ambition that can provide a pathway to Australia achieving the government’s low emissions objective,” ARENA CEO Darren Miller said.

“We believe that Australian industry is ready to take the next step in creating ideas and knowledge that will position Australia for a low carbon future,” Miller said.