Energy companies, industry push for CCS carbon credits
Big energy and industrial companies have called for changes to the Morrison government's $2 billion Climate Solutions Fund that would allow tradeable carbon credits to be issued to companies storing carbon dioxide underground.
Santos and BHP, the cement industry and carbon sequestration companies have thrown their weight behind the call, arguing that "geological'' storage of carbon should be eligible for Australian Carbon Credit Units (ACCUs) in the same way that ACCUs were issued for "biological'' storage of carbon in tree-planting schemes.
The Clean Energy Regulator has approved scores of "methodologies" that are eligible for ACCUs, and once earned the ACCUs can be sold to third parties that are seeking to offset their carbon emissions.
While the market for ACCUs is small and not transparent, units have reportedly been worth between $14 and $16 over the past year.
Chevron has belatedly started sequestering carbon extracted from gas at its Gorgon LNG project in WA and Santos is exploring carbon capture and storage (CCS) in the Cooper Basin.
Both companies are investors in Co2CRC Limited, an Australian company trialling CCS in Victoria, and chief executive David Byers said policy parity was warranted.
''Geological storage is more trustworthy [than biological storage] because you have much greater certainty and scientific veracity attached to monitoring of carbon dioxide, and where it is located in a geological storage structure than you do over time in a biological sequestration project,'' he said.
BHP's practice lead on climate change, Graham Winkelman, said it would be appropriate to recognise geological storage of carbon given its likely role in decarbonising heavy industry like steel and cement.
“If methodologies such as biosequestration or geosequestration can effectively store carbon dioxide, it seems appropriate that carbon credits could be generated to encourage their use and development,” he said.
Asked whether the Cement Industry Foundation believed credits should be earned for geological storage of carbon, the Foundation's chief executive Margie Thomson said "of course they should".
Energy Minister Angus Taylor was non-committal when asked if he believed CCS should be eligible for ACCUs.
''The government is committed to ensuring the Climate Solution Fund supports low-cost abatement across the economy, including uptake of new technology,'' he said.
But environment groups were cautious about the idea of opening up ACCUs to CCS.
''The short answer is ‘no’,'' said Australian Conservation Foundation spokeswoman Suzanne Harter.
''You can look at CCS as a means of prolonging the life of fossil fuel industries by investing further in sequestering carbon pollution. Or you can look at CCS as a means of capturing carbon from the atmosphere to help draw down the excessive CO2 that has already been emitted," she said.
"Government policy on reducing carbon pollution should not be about throwing a lifeline to coal, oil and gas, it should focus on transitioning to clean zero-pollution options.
''There is a finite budget on the table for Australian Carbon Credit Units. Paying Santos or other companies with fossil fuel interests to try to sequester their pollution is not a good use of that public money.
''CCS is still unproven as a long-term means of storing carbon. Whether there should be separate funding for research into future technologies and means of storing carbon pollution already emitted, or to assist industries that overshoot safe limits, is another question.
"That funding should not be provided through ACCUs or initiatives to reduce Australia’s climate pollution.''
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