Taylor’s latest $500m carbon capture fund may already be headed for scrapheap

Plans by the Morrison government to legislate changes to the Clean Energy Finance Corporation (CEFC) and establish a new $500 million “low emissions technology” fund  are in jeopardy, with another crucial group of senators lining up against the idea, just days after it was announced.

On Wednesday, prime minister Scott Morrison and federal energy minister Angus Taylor said a new Low Emissions Technology Commercialisation Fund would attract an additional $500 million in private investment to be channelled towards technologies such as carbon capture and storage.

The government is proposing to use the CEFC to administer the fund. However, as the CEFC is prohibited by legislation from investing in CCS and other fossil fuel technologies, legislative amendments will need to be passed by parliament.

The Morrison commands a slim majority in the House of Representatives, but not in the Senate, where it requires the support of at least three other senators to secure a majority and successfully pass legislation.

One Nation has usually provided at least two of these votes, with Pauline Hanson and Malcolm Roberts generally siding with the government on most matters in the Senate.

The government has often secured the last vote through deals struck with independent senators Rex Patrick, Stirling Griff or Jacquie Lambie, who make up the rest of the Senate crossbench.

However, Morrison may not be able to rely on the support of Hanson and Roberts for the CEFC bill, with the One Nation leader saying her party will withdraw their support for all government legislation until Morrison has intervened to prevent the introduction of Covid-19 vaccine mandates.

Making the situation even harder for the government, two of the Coalition’s own Queensland senators are also set to rebel and vote against the CEFC changes.

Former resources minister Matt Canavan has pledged to vote against the bill as part of his broader opposition to the government’s net zero emissions “plan”.

Queensland Liberal senator Gerard Rennick – who has often attempted to question the science of climate change during Senate estimates hearings – says he opposes public funds being channelled into anything related to low emissions technologies and intends to vote against the bill.

It leaves the Morrison government potentially needing to secure a further four votes to successfully pass the changes and not enough votes from the crossbench to bridge the gap.

The Australian Greens – who have nine senators – have already indicated their opposition to the CEFC changes.

“The Government doesn’t need legislation to take ownership stakes in new start-ups,” Greens leader Adam Bandt said.

“The CEFC can do that already and an investment mandate from the Minister would put it beyond doubt. The only reason the Liberals want legislation is to turn the CEFC into a slush fund for coal and gas corporations.”

If Labor decides to oppose the legislation, it would mean yet another defeat for the Morrison government in its attempts to divert clean energy funding bodies towards its preferred technologies.

The government has already been forced to abandon plans for a $1 billion Grid Reliability Fund, after its own legislative amendments were hijacked by Nationals MPs.

Labor’s climate and energy spokesperson, Chris Bowen, said Labor would “wait to see the detail” of the legislation before deciding on whether or not it would support the creation of the $500 million Low Emissions Technology Commercialisation Fund.

“We’ll look at the detail. Our objections have been the diversion of money for renewable energy into other technologies. The government spins this is new money, but we’ll look at the detail,” Bowen told the ABC on Wednesday.

While the details of the fund – including which technologies it will be investing in and how much of the $500 million allocation is “new” money – have let to be released, it is understood to be predominantly focused on investments in carbon capture and storage.

Taylor is expected to introduce legislation in parliament during the last sitting period before Christmas, with the intention of parliament voting on the bill before the next election.

Labor has previously opposed the Morrison government’s attempts to open up the Clean Energy Finance Corporation and the Australian Renewable Energy Agency to fund carbon capture and storage projects.

The opposition party has previously supported investments in the development of CCS technologies but has argued that neither of the dedicated clean energy funding bodies was the appropriate means of providing this support and that they should remain focused on providing support for an existing portfolio of clean energy technologies.

Federal parliament will return in the last week of November for the final two sitting weeks of the year.