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Taylor tries again to redirect renewables funds into hand picked technologies

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Federal energy and emissions reduction minister Angus Taylor has renewed his attempt to redirect funds earmarked for renewable energy projects to the Morrison government’s favoured ‘low emissions’ technologies, including funding carbon capture and storage.

Taylor on Thursday quietly issued a new set of regulations for the Australian Renewable Energy Agency, designed to use its funds to support technologies such as CCS, soil carbon, hydrogen production and alternative fuels identified by the government’s Technology Investment Roadmap.

Taylor’s first attempt at introducing new ARENA regulations was scuttled by the senate, when Labor and the Greens succeeded in passion motions to “disallow” the regulations One Nation leader Pauline Hanson abstained.

The updated regulations, however, will place additional restrictions on which technologies may be funded, limiting its focus to five technologies identified under the Morrison government’s Low Emissions Technology Statement (LETS), with new caps and time limits on funding.

“These Regulations are different in substance to the disallowed Regulations,” the explanatory statement issued with the regulations says.

“Specifically, they have made material changes to the nature and scope of the new functions and programs intended to be supported by ARENA, as well as changing aspects of the context in which they will be deployed and reported on.

“ARENA’s general ability to fund priority low emissions technologies is now entirely centred on the five priority technologies articulated in the first LETS, and is subject to new accountability, reporting and financial controls.

“Furthermore, ARENA’s powers in relation to the five targeted budget programs are now capped financially, time limited and have more defined scopes for funding than was the case for the disallowed Regulations.”

The move to fund CCS projects has attracted criticism from the clean energy sector, with the technology comparatively unproven in Australia, and generally seen as a way to justify the continued expansion of fossil fuel use.

The new regulations have, however, won the enthusiastic support of the Australian Petroleum Production and Exploration Association (APPEA), which represents Australia’s largest oil and gas producers, in an indication of who is likely to benefit most.

“Just as government investment in renewables has fast tracked projects, this would do the same and create thousands of jobs in the process,” APPEA chief executive Andrew McConville said. “Natural gas with CCS is a pathway to a large-scale clean hydrogen industry.”

The move to push funds into new areas has been criticised as going beyond Taylor’s powers under ARENA’s legislation and potentially unlawful.

ARENA’s legislation makes clear that the agency is to specifically support the development of new renewable energy technologies, to lower their cost and help increase their use in Australia.

According to the explanatory statement issued with the new regulations, Taylor will rely on the fact the ARENA Act doesn’t expressly prohibit it being used for other functions beyond supporting renewable energy technologies.

This is likely to be legally contentious, and potentially goes against long-established principles of legislative interpretation, that restrict ministerial powers to those expressly stated in legislation.

National director of advocacy group Solar Citizens, Ellen Roberts, said that by re-issuing the regulations, Taylor was again trying to avoid following the normal law-making processes.

“Angus Taylor is trying to turn the Australian Renewable Energy Agency into a fossil fuel slush fund,” Roberts said. “The Australian Renewable Energy Agency can already invest in the technologies we need to lower emissions: renewable energy backed by storage.

“These regulations could open the door to renewable energy funding being used to prolong the life coal and gas with unproven carbon capture technology, or investment in dirty hydrogen.

“Similar regulations were rejected by the Senate just a month ago. Taylor is once again trying to misuse his power as Energy Minister to sidestep normal law-making processes,” Roberts added.

The new regulations, with amendments that introduce narrower restrictions on where ARENA will be able to spend funds and new requirements on the energy minister to make regular disclosures on which projects have received funding, suggest that a deal may have been struck to ensure it can’t be stopped by the Senate.

It is understood that Hanson had abstained from the earlier disallowance vote in a move to differentiate her party from the government, particularly on issues relating to government accountability and wasteful expenditure of public funds.

But the new amendments, providing some level of increased scrutiny of how ARENA allocated its funding while still allowing the Morrison government to use ARENA funds to support its preferred technologies, indicates that Taylor has sought to mitigate the concerns of the One Nation leader.

The Australian Greens have confirmed to RenewEconomy that the party will attempt to again cancel out the revived regulations, but it is unclear whether Labor will do the same – with a decision yet to be made by shadow cabinet on whether to mount another challenge to the regulations.

“In typical Angus Taylor fashion, these regulation have been dropped out to the media overnight instead of flagged with the opposition as something to try and cooperate on,” a spokesperson for Labor’s shadow climate and energy minister, Chris Bowen, said.

“Labor will look at the details over coming days.

“But Labor created ARENA, and we have fought against multiple attempts to abolish it and water it down – and we will continue to fight for it,” a spokesperson added.

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