Labor tries to block new regulations pushing ARENA into fossil fuels

Federal Labor will move to cancel out new regulations set by federal energy and emissions reduction minister Angus Taylor that seek to open up the Australian Renewable Energy Agency (ARENA) to providing funding to carbon capture and storage and hydrogen produced using fossil fuels.

The new ARENA regulations, quietly set by Taylor earlier in May, attempt to significantly expand ARENA’s functions to provide funding to a broad range of Morrison government policies – unrelated to renewable energy – that are being prioritised under its ‘Technology Investment Roadmap’.

This includes initiatives to support the development of new transport fuels, fuel efficiency technologies, soil carbon storage and the production of low emissions materials like aluminium and steel.

The expanded remit also extends to funding an undefined category of ‘low emissions technologies’ that officials from the Department of Industry Science Energy and Resources told a hearing of senate estimates on Tuesday that “conceivably it could include gas projects”.

The new regulations raise the prospect that ARENA’s funds that would normally be dedicated to supporting the development of emerging renewable energy technologies will instead be redirected to provide funding for projects that are fundamentally fossil fuel projects.

Federal ministers can set new regulations under legislation without the need to seek the approval of parliament. It provides ministers with a way to augment or expand the reach of legislation and the functions of government agencies while avoiding the need to pass new legislation through parliament.

However, regulations may be cancelled out by either house of parliament with the passage of an appropriate “disallowance” motion.

Shadow climate and energy minister Chris Bowen announced on Tuesday that Labor would seek to move such a disallowance motion in both the House of Representatives and the Senate to cancel out the new ARENA regulations set by Taylor.

“Labor created ARENA and has defended it against constant Government attempts to abolish and undermine the independent Agency,” Bowen said.

“In his latest attack, the embattled Energy Minister has made regulations to expand ARENA’s remit to include non-renewable technologies that the Government regards as ‘low emissions’. The idea of giving Fantastic Angus a blank cheque to decide what is and isn’t ‘low emissions’ technology is a joke.”

Bowen added. “I’ll also be moving disallowance in the House of Representatives, and those liberal MPs who pretend to be environmentalists and supporters of renewable energy in their electorates can justify their votes to their communities.”

However, a motion to disallow the regulations in the House of Representatives, where the Morrison government holds a small majority, is almost certain to fail.

The motion in the Senate has a greater chance of succeeding if Labor can secure the support of both the Australian Greens and a majority of the crossbench senators. But Morrison government will likely have the support of the two One Nation senators to defeat the motion.

In a Senate estimates hearing earlier on Tuesday morning, Australian Greens senator Larissa Waters alluded to a potential legal challenge to the new ARENA regulations, suggesting that they were inconsistent with ARENA’s parent Act and could be legally invalid.

While the ARENA Act allows the federal energy minister to expand the functions of ARENA through regulations, any such regulations must still be consistent with the purpose of the parent legislation under which they are made.

In the case of the ARENA Act, the purpose of the Act is to provide support to the development of renewable energy technologies. It may not be possible to extend this purpose to funding unrelated technologies through regulations alone.

Officials confirmed that legislative amendments to the ARENA Act, that would have implemented the same changes to ARENA’s functions, had been drafted but not pursued.

The decision to implement the changes through regulations allowed the Morrison government to avoid a parliamentary fight over the amendments. The government has already seen an attempt to amend the investment remit of the CEFC became stalled after Nationals backbenchers moved their own amendments that would go as far as opening up the CEFC to invest in coal and nuclear projects.

Department officials said that the Morrison government would be forced to reassess how it may fund initiatives under the Technology Investment Roadmap should the regulations be disallowed.

During the estimates hearing, government officials were pressed on the decision to make a $600 million investment in a new gas generator at Kurri Kurri, saying they believed the investment would stack up, without providing further details about the project.

Officials also refused to answer questions about the recent veto of a government loan to a Queensland wind and storage project by resources minister Keith Pitt, saying that questions would need to be posed to officials under a hearing scheduled next week.