After days of speculation that the federal government was gearing up to commit to net zero by 2050, Prime Minister Scott Morrison has instead revealed his government will spend a little over $500 million on what he calls “clean” hydrogen and carbon capture and storage.
Under the plan, the government will contribute $275.5 million towards the creation of five “clean” hydrogen hubs, while another $263.7 million will go to the creation of CCS “projects, hubs and technologies”.
The plan envisages major ongoing roles for gas and coal – including in hydrogen manufacture – demonstrating that while the rest of the world is shifting up a gear in the battle against climate change, the Australian government continues to look for artful ways to protect the fossil fuel industry.
The announcement looks destined to be the headline policy Morrison will take to US President Joe Biden’s climate summit at the end of the week, and is an anaemic offering next to the bold commitments made by the United States, Europe and the United Kingdom in recent months.
But the fact Morrison is announcing anything at all demonstrates the pressure he is under internationally to start acting on climate change.
It follows the United Kingdom’s announcement yesterday that it would target a massive 78 per cent reduction in greenhouse gas emissions on 1990 levels by 2035, and reports that the US would target a 50 per cent or more reduction by 2030 – though the latter has yet to be confirmed.
Both these hefty commitments, from the two countries to which Australia most often compares itself, are in line with the Paris Agreement, which requires signatories to ramp up their emissions targets every five years to help meet the goal of keeping global warming to well under 2 degrees and as close to 1.5 degrees as possible.
As a signatory to the Paris Agreement, Australia is also obliged to increase its own target, which currently stands at 26 to 28 per cent below 2005 levels by 2030, a target that is woefully inadequate to meet the Paris temperature goals.
There has been no hint Morrison will actually follow through on his obligation to ratchet up this target at the COP 26 meeting in Glasgow in November.
There had been speculation Morrison would at least commit to net zero by 2050 ahead of Biden’s climate summit, but this too now looks unlikely. Instead, the federal government has stuck to its policy of investing in technology rather than putting caps on emissions through aggressive policies and targets.
The $540 million investment in hydrogen and CCS fall under the “Technology Investment Roadmap”, a plan to invest $18 billion of federal money in emissions reduction technology over the next decade, and mobilise a further $50 billion of private investment.
According to the scant detail made available, the hydrogen investment will go toward the creation of five hydrogen “hubs” – that is, parts of the country where hydrogen can be manufactured and shipped overseas. Such hubs would likely need access to renewable energy, water (assuming the hydrogen is made with renewably-generated electricity and water), gas pipelines, and export terminals.
However, the government said it would also be looking for hubs near gas or coal reserves. This is a clear signal the government wants to fund “blue” hydrogen, which is made not from water, but from methane or coal, and produces CO2 emissions. The emissions are then theoretically captured using carbon capture and storage, but current technology is not able to capture all of those emissions.
The only byproduct in green hydrogen production is climate-friendly oxygen, so CCS is not required.
Energy minister Angus Taylor talked up the prospects of the brown coal hydrogen facility in the Latrobe Valley, where it could be combined with CCS. “That’s where we see the immediate opportunity with coal,” he told regional ABC radio. Asked if the five hydrogen hubs would require renewable energy as the power source, Taylor said: “No. A mix is the answer.”
The government said possible sites for these hydrogen hubs included Bell Bay in Tasmania, Pilbara in Western Australia, Gladstone in Queensland, the La Trobe Valley in Victoria, Eyre Peninsula in South Australia, the Hunter Valley in New South Wales, and Darwin in the Northern Territory.
The government earmarked six potential sites for CCS hubs: Moomba in South Australia, Gladstone in Queensland, the Darling Basin in NSW, the North West Shelf and Bonaparte Basin in Western Australia, Darwin in the Northern Territory and south-western Western Australia.
Among the uses for CCS, it listed energy generation, natural gas and hydrogen production, and heavy industries such as manufacturing, chemicals, and cement and fertiliser production.
Morrison pitched the plan as a way of protecting jobs in regional areas.
“We cannot pretend the world is not changing. If we do, we run the risk of stranding jobs in this country, especially in regional areas,” he said.
“Australia can and will continue to meet and beat our emissions reduction commitments, while protecting and growing jobs, by commercialising low emissions technologies like hydrogen and CCS/CCUS, that can support our industries and critical economic sectors. And when we commercialise those technologies, they also create new jobs.
“Low emissions industries mean more jobs directly for workers, but also cheaper energy means lower costs to businesses that they can reinvest in hiring more people.”
The Clean Energy Council welcomed the spending on green hydrogen, but not on “locking in fossil fuel-based hydrogen” or CCS.
Chief executive Kane Thornton said CCS had “proven to be very expensive and challenging to integrate into Australia’s ageing coal-fired generation fleet”.
James Fernyhough is a reporter at RenewEconomy. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.