Senate again blocks Angus Taylor’s bid to redirect ARENA funds to CCS projects

The federal Senate has delivered a pre-election blow to the Morrison government’s energy policies, cancelling out controversial regulations that sought to redirect funds from renewable energy technologies to those preferred by the Morrison government, including carbon capture and storage.

Notably, for the Morrison government, the blow was delivered by one its own, a conservative Senator who had threatened to cross the floor in what would have been a humiliating outcome on the day before the federal budget.

The controversial regulations for the Australian Renewable Energy Agency (ARENA), issued by federal energy and emissions reduction minister Angus Taylor, attempted to expand the responsibilities of ARENA and redirect its funds to carbon capture and storage projects, and a range of non-renewable energy policies.

The included the ‘Future Fuels’ fund, soil carbon and a range of grants to improve freight transport productivity.

ARENA was created under the Gillard government and has provided almost $2 billion in grant funding that has underpinned the development of Australia’s emerging renewable energy sector. ARENA has been particularly key to successfully establishing a viable large-scale solar industry in Australia.

The Coalition government has been hostile towards the agency, unsuccessfully attempting to abolish it altogether. The regulations issued by Taylor have been viewed as a fresh attempt to redirect its funds to those technologies favoured by the Morrison government.

Labor’s climate and energy spokesperson, Chris Bowen, welcomed the outcome, which as come after a year of attempts to repeal the regulations parliament.

“Morrison and Taylor’s efforts to circumvent the parliament with their dodgy ARENA regulation have been disallowed by the Senate,” Bowen said.

“This disallowance was moved by their own Liberal-led committee, vindicating Labor’s fight to protect ARENA from becoming another Angus Taylor slush fund.”

“The government has variously tried to abolish, undermine, and repurpose ARENA funding for fossil fuels – while they spend taxpayer money on ads claiming credit for ARENAs work,” Bowen added. “They have fought against this outcome for a year – and cannot be trusted on climate change and renewables.”

The latest cancelling-out of the new regulations has come as a result of a disallowance motion moved by Liberal senator Concetta Fierravanti-Wells, who chairs the influential oversight committee responsible for scrutinising delegated legislation, like regulations.

Last year, the oversight committee recommended the ARENA regulations be cancelled out, as it was not satisfied that the regulations had any legal basis, given ARENA’s legislation required the agency only to fund renewable energy technologies.

While ministers have the freedom to issue regulations as they please, well established legal principles dictate that regulations cannot be inconsistent with the parent legislation under which they are made.

This was a view echoed by several notable legal experts, who said unlawful regulations could expose the grants being provided by ARENA to legal challenge.

On Monday, Environmental Justice Australia backed the repeal of the regulations.

“Leading barristers tell us Minister Taylor’s move is wide open to legal challenge on several fronts,” Environmental Justice Australia’s senior climate specialist lawyer Hollie Kerwin said.

“Parliament’s own bi-partisan, Liberal-led scrutiny Committee has now made the exceedingly rare move to ask the Senate to take the regulations off the books because of its concerns they are unlawful and inappropriate.”

Regulations can be cancelled out by either chamber of Parliament, by passing a motion of disallowance.

Similar ARENA regulations have already been cancelled out once before, successfully ‘disallowed’ by the Senate in June last year.

But a fresh set of regulations were simply reissued by Angus Taylor, who claimed blocking the regulations would prevent the government from supporting a range of emissions reduction and energy efficiency measures.

Procedure dictates that any such disallowance motion must be voted on within 15 sitting days of its introduction – otherwise, the disallowance is automatically considered successful. This procedure prevents a government from frustrating any attempt to disallow regulations by refusing to bring on a vote.

As it happens, Monday was the 15th sitting day since Fierravanti-Wells introduced her disallowance motion and the last sitting day that the disallowance motion could be dealt with.

With the senate sitting on Monday, and its business mostly focused on condolences following the death of Labor senator Kimberley Kitching, the senate did not consider its usual business.

However, immediately before the start of the condolences, Fierravanti-Wells indicated to the senate that she would not be withdrawing her motion to disallow the ARENA regulations.

By early afternoon, the senate had adjourned following a series of condolence speeches and without voting to block Fierravanti-Wells’s motion, meaning the repeal of Taylor’s regulations was successful.

It is understood that Coalition senators would not have sought to oppose the disallowance, given it was a recommendation of the influential oversight committee.

There was also a prospect that its chair, Fierravanti-Wells, would cross-the-floor to support the motion if a vote was brought on. Fierravanti-Wells recently lost a pre-selection battle for a winnable spot on the Liberal Party’s New South Wales Senate ticket, and so the disallowance may be a subtle form of payback.

Undeterred, a spokesperson for Angus Taylor said the “Morrison government will revisit the regulation in the immediate future”

“While the Government has not changed its position, the Government has withheld calling a division out of respect for the condolence motion for Senator Kitching,” the spokesperson said.

“The Government remains committed to the regulation and the role it plays in supporting the deployment of low emissions technology. Expanding ARENA’s remit has wide industry support.”

ARENA will revert to an earlier set of regulations that limited the agency to only using its funding to support the development of new renewable energy projects and technologies.

Australian Greens leader Adam Bandt welcomed the disallowance.

“We helped set up ARENA in the 2010 power-sharing Parliament, we stopped Tony Abbott abolishing it and now we’ve stopped the Liberals using the country’s renewable energy agency to funnel public money to coal and gas donors,” Bandt said.

“The ‘R’ in ARENA stands for ‘renewable’, and coal and gas aren’t renewable. Coal and gas shouldn’t get public handouts.”

The Australian Conservation Foundation said that ARENA would now be free to concentrate its support on renewable energy technologies.

“Minister Taylor tried to dodge parliamentary scrutiny by attempting to force changes on ARENA through regulations – avoiding the proper parliamentary process that would have come through amending the agency’s legislation,” ACF climate and energy analyst Suzanne Harter said.

“ARENA is now able to continue with its critical work of driving Australia’s clean energy transition without the distractions introduced by Minister Taylor.”