On 8 February 2018, the Senate referred the Clean Energy Finance Corporation Amendment (Carbon Capture and Storage) Bill 2017 to the Environment and Communications Legislation Committee for inquiry. The Amendment Bill removes the prohibition on the Clean Energy Finance Corporation (CEFC) investing in carbon capture and storage (CCS) technologies.
AGL made a submission to the Inquiry, a copy of which is available here.
AGL in principle supports the Amendment. In our view, a technology neutral approach to investment decisions provides Australia with the best prospects of attracting the scale and diversity of investments required to decarbonise the Australian economy consistent with Australia’s commitments made under the Paris Agreement. In addition to continued investment in renewable energy and low emissions technologies, we consider that CCS technologies will play a critical role in addressing the challenges associated with climate change. We also consider that the development of CCS technologies in Australia could deliver important benefits in the context of Australia’s international policy.
Nevertheless, we consider that the Amendment should not serve to dilute the CEFC’s important mandate to finance and invest in renewable energy, low-emission and energy efficiency technologies.
Accordingly, we would urge the Government to provide appropriate incremental funding to facilitate investments in CCS technologies. With an appropriately expanded budget to focus on CCS, we consider that the CEFC would be well placed to make investment decisions that support both renewable energy and low emissions technologies and CCS technologies. We also note that the Minister is currently prohibited from giving any direction under the CEFC's investment mandate requiring the CEFC Board to invest in a particular investment. We would strongly urge against any changes that would have the effect of circumventing this prohibition, including the preferential treatment of investments into CCS technologies above finance to renewable energy and low emissions technologies.
As we observed in our recent submission in response to the Energy Security Board's National Energy Guarantee Consultation Paper, Australia remains in serious need of a long-term national carbon policy that drives investment in low-emissions sources and can steer the electricity sector smoothly through the process of replacing aging thermal plant with less emissions-intensive generation.