ARENA will be “sullied” by Taylor’s new regulations, former chair says

The clean energy sector and energy market experts have lamented the new regulations that survived a Senate vote on Wednesday and will likely see funds from one of Australia’s leading clean energy bodies directed to fossil fuel projects.

Energy and emissions reductions minister Angus Taylor last week made a second attempt to introduce new regulations for the Australian Renewable Energy Agency that will push funding towards carbon capture and storage projects and the production of fossil fuel hydrogen.

Last night, the regulations narrowly survived an Australian Greens attempt in the federal senate to have them cancelled out after One Nation sided with the government to block the attempt.

The regulations will remain in place but have attracted strong opposition from within the clean energy sector.

Apart from  opening up ARENA funds for the government’s handpicked technologies under its ‘Technology Investment Roadmap’, it will also direct ARENA to manage the $71.9 million Future Fuels Fund, the $43 million Industrial Energy Transformation Studies Program and the $50.4 million Regional Australia Microgrid Pilots Program as well as two sustainable freight initiatives.

Former ARENA chair and Climate Council councillor Greg Bourne said the new regulations “sullied” the renewables agency by redirecting funding to projects such as CCS and making hydrogen with gas.

“This retrograde step will prop up fossil fuels using taxpayer money,” Bourne said.

“The nation’s renewable energy agency should not be spending money earmarked for renewables on CCS technology. If any investment is made, it should be paid for by the fossil fuel industry. CCS is expensive, unlikely to be effective, and the industry has always over-promised and under-delivered.”

Bourne, who was appointed as the inaugural chair of the ARENA board when the agency was established in 2012, added that using government funds to support the development of a fossil hydrogen industry in Australia would undermine efforts to cut greenhouse gas emissions.

“Gas is also a fossil fuel that powerfully drives climate change, and hydrogen from gas has no place in Australia’s zero emissions energy future. Only hydrogen made with renewable energy is worth investing in, as customers demand ‘green hydrogen’ in a decarbonising global economy,” Bourne added.

“From renewables to battery storage to energy efficiency, we already have the technological solutions to reduce emissions. The government should be accelerating efforts to scale up and improve these climate solutions, creating jobs and economic opportunities in the process.”

An attempt by the Australian Greens to cancel out the new regulations was unsuccessful, with a tied vote in the federal senate seeing the regulations narrowly survive.

The disallowance motion had received the backing of Labor and most of the senate crossbench, with Labor saying that it would support the disallowance motion as it did not want to see ARENA become another government “slush fund”.

“Labor created ARENA in 2012 and we will always protect it. We will protect it from becoming Mr Angus Taylor’s slush fund because it is doing an incredible job, it has maintained its integrity, it has been able to provide jobs for Australians and it has been able to deliver returns on investment for taxpayers,” Labor senator Carol Brown said.

However, speaking on behalf of the Morrison government, Liberal senator Jane Hume said that the Morrison government saw carbon capture and storage as an “essential” technology.

“The government is committed to supporting the future of jobs in our resources and manufacturing sectors while driving down our emissions. If successful, this disallowance will prohibit millions in funding for carbon capture and storage, which is essential technology for reducing carbon emissions in manufacturing and heavy industry,” Hume said.

Following the vote, Australian Greens leader Adam Bandt said that “if minister Taylor thinks this is over, he is wrong”, flagging the potential for a legal challenge to the regulations and the party seeking to challenge the regulations through other mechanisms.

Such a message was echoed by the Smart Energy Council, likewise warning that a fight over the ARENA regulations “is not over by any means.”

With serious questions around the legality of the regulations, and a genuine prospect they are beyond the powers granted to Taylor under the ARENA Act, a legal challenge could ultimately see questions about their validity brought before a court.