Power Engineering - Australian parliamentary report calls for CCS incentives

15 August 2008 - The government should give Australia's coal-burning electricity companies more financial incentives to invest in technology to capture and bury the greenhouse gas they produce, a parliamentary report has said.

A parliamentary committee has examined the government's proposed legislation that would enable industry to bury carbon dioxide emissions under the sea bed off Australia's coast.

The government believes the geological formations that have stored oil and gas under coastal waters for millions of years would also be suitable for storing manmade greenhouse gases.

But the committee reported that a new industry in storing carbon dioxide could only succeed commercially if technology to capture the greenhouse gas became widespread in Australia.

"Since the majority of our emissions derive from the coal-fired energy generation sector, the committee feels that this sector should begin making faster headway with regard to capture," committee chairman Dick Adams wrote.

"We have suggested that financial incentives be considered by the government as encouragement to those early investors in this new industry," he added, but gave no details of what the incentives should be.

Australia is one of the world's worst greenhouse gas polluters per capita because of its heavy reliance on the country's abundant reserves of cheap coal. Electricity generation accounts for most of Australia's emissions.

The government has committed hundreds of millions of dollars to help the electricity industry develop technology to capture and store carbon dioxide. But the so-called carbon sequestration technology remains experimental.

Resources Energy Minister Martin Ferguson introduced to Parliament in June legislation that would both allow and encourage the private sector to explore Australia's territorial waters for suitable seabed sites where carbon could be injected.

"Geological surveys have indicated that the storage formations in offshore waters ... have the potential to securely store hundreds of millions of tons of carbon dioxide for many thousands of years," Ferguson told Parliament when he introduced the legislation.

The government was elected in November last year on a promise to slash Australia's emissions 60 per cent by 2050.

Ferguson is fast tracking his plan to bury carbon under the sea as a way of achieving the reduction target while Australians continue burning coal. His legislation is likely to be voted on this year.

From 2010, the government will place a tax on creating pollution, which will act as a financial incentive for industries to reduce their carbon emissions.

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