Cash for gas and big emitters in another miserly budget for clean energy and EVs

The Morrison government has delivered another federal budget that offers little support for Australia’s rapidly emerging clean energy sector, choosing instead to double down on its ‘gas fired’ agenda and pay major emitters to reduce their emissions.

It’s another budget from the Coalition that will channel further public funds to the fossil fuel sector, particularly helping to grow the gas industry while letting major emitters off the hook, while almost entirely ignoring burgeoning wind, solar and storage technologies and entirely ignores electric vehicles.

The government’s second post-Covid budget can largely be characterised as more taxpayer support for the fossil industry, as well as allocating more money for preparing for the symptoms of climate change.

The Morrison government had already announced most of its budget measures relating to energy and emissions reductions, but further details were outlined in the budget handed down on Tuesday night.

As had been announced last week, the government will spend a further $58.6 million supporting new gas projects, as part of its ‘gas fired recovery’, to support the construction of new gas storage projects and gas pipelines.

Morrison had also already committed, ahead of a major international leadership summit, $275.5 million for the creation of five new hydrogen hubs across Australia and a further $263.7 million to fund new carbon capture and storage projects – which mostly focus on supporting projects at a range of gas facilities.

Funding that had previously been earmarked for since abandoned upgrades at the Vales Point power station appears to have been re-purposed as part of a $24.9 million commitment to help gas-fired generators become ‘hydrogen ready’.

The total package of funding, provided under the government’s Technology Investment Roadmap, will total $1.6 billion over the next 10 years, with the Morrison government committing a further $279.9 million over the next decade to pay major industrial emitters to reduce their emissions as part of a new “below baseline crediting mechanism.”

The new mechanism was a recommendation of former Origin Energy CEO Grant King – who was recently appointed as the new chair of the Climate Change Authority – and will see major industrial emitters awarded offset credits for reducing emissions below their historical levels.

The scheme is likely to operate in a similar way to a baseline-and-credit mechanism but will likely see the government itself – and by extension, taxpayers – serve as the major purchaser of the emissions credits.

The headline figure also includes $59.6 million in funding committed to a new National Soil Carbon Innovation Challenge and an agricultural feedstock trial to test additives that can reduce emissions from livestock.

No new funding has been awarded to clean energy projects. While the budget outlines a new initiative to be managed by the Australian Renewable Energy Agency – to establish a new early-stage seed capital investment arm – the $50 million allocated to it will be drawn from ARENA’s existing funding allocations.

Other measures include a $10.4 million expansion of the Climate Active carbon neutral certification program, $26.4 million to support business adoption of energy efficiency measures and $14.4 million to streamline reporting under the National Greenhouse and Energy Reporting Scheme.

There is no funding included in the budget for electric vehicles, which have yet again gone ignored by the Morrison government, but ailing fuel refineries will receive an undisclosed amount to “maintain refining capability.”

The government will spend $1.2 billion over the next five years to improve Australia’s ability to prepare and respond to natural disasters – most of which are being fuelled by climate change. The funding includes a previously announced commitment of $209.7 million to establish a new Australian Climate Service. The budget includes $615.5 million over six years from 2021-22 for the Preparing Australia program, to support “disaster risk reduction and resilience.”

Federal energy and emissions reduction minister Angus Taylor said the budget had focused on the development of new technologies under the government’s Technology Investment Roadmap.

“Our 2021-22 Budget measures will provide reliable, secure and affordable energy to all Australians, and increase investment in technology solutions to reduce emissions in a way that supports jobs and economic growth,” Taylor said.

“Australia is focused on investing in commercialising technologies, not harmful taxes, in the global effort to reduce emissions. Our 2021-22 Budget measures continue this approach while strengthening our energy security and supporting the growth of new industries and jobs into the future.”

But Greenpeace Australia’s Dr Nikola Čašule said that it was clear that the Morrison government was spending more on treating the symptoms of climate change than addressing the cause.

“In this budget, the Coalition government is putting on a show of taking action on the symptoms of climate change, without doing anything to tackle the root cause: the burning of fossil fuels,” Dr Čašule said.

“What’s worse, it’s throwing money at fossil fuel infrastructure and false solutions like Carbon Capture and Storage (CCS) that only entrench the use of coal, oil and gas.”

It was a sentiment echoed by national director of the Australian Youth Climate Coalition, Alex Fuller.

“Gas is fuelling the climate crisis but our government is pouring billions of dollars into subsidising and expanding the gas industry. The Government should use public money to fund solutions and a clean energy transition, not making the problem worse,” Fuller said.

The lack of funding for clean energy and climate change measures continues to see the Morrison government contrasted with the leadership being shown by international peers. Both the United States and the European Union have signed off on multi-trillion-dollar economic recovery plans that embrace clean energy and low emissions infrastructure in their Covid-19 economic recoveries.

The Clean Energy Council described the budget as a missed opportunity.

“A clean recovery from COVID-19 could have delivered over $50 billion of investment, more than 30,000 MW of capacity in renewable energy and more than 50,000 new jobs in constructing these projects, along with many more indirect jobs, revitalising economic activity in regional and rural communities across Australia,” Clean Energy Council chief Kane Thornton said.

“This is the way we get Australia’s economic engine to roar back to life and how we build a more resilient and secure Australia.”