The Federal Government has announced its First Low Emissions Technology Statement (Statement) as part of the Government's Technology Investment Roadmap released in May this year.
The Roadmap represents the Government's central, long-term policy designed to facilitate Australia's transition to a decarbonised economy through investment in new technologies while promoting energy affordability and security. The purpose of the Statements, which will be released annually, is to present a rolling assessment of the challenges and opportunities, priority technologies, and economic stretch goals within the context of the broader long-term Roadmap.
Key takeaways from the Statement
- Redirected investment focus – the Statement refocuses government investment via ARENA, CEFC and CER to support the priority technologies and stretch goals (outlined below).
- Additional funding – in support of the Statement, the Government announced a $1.9 billion package including $1.62 billion in new funding for ARENA over the next 10 years.
- Mature technologies – the Government has signalled that in principle it will not undertake new investments in mature technologies (ie, coal, gas, solar, wind, hydro projects) as these are now established technologies which should be driven by the private sector. Support will only be offered if the Government believes a market failure has occurred (ie, shortage of dispatchable generation or job security concerns) which justifies government intervention.
Categorisation of low emissions technologies
In the Statement, the Government has categorised technologies identified in the Roadmap into four categories.
| Category |
description |
example technologies |
|
1. Priority Low Emissions Technologies
|
- An investment priority for ARENA/CEFC/CER – Government will work to reduce barriers to deployment.
- These have transformative potential to reduce emissions, and align with Australia's comparative advantages.
|
- Clean hydrogen
- Energy storage
- Low carbon steel and aluminium
- Carbon capture and storage (CCS)
- Soil carbon
|
| 2. Emerging and Enabling Technologies |
- Transformative potential but require continued monitoring of global research and investment trends.
- ARENA/CEFC/CER will continue to support these technologies.
|
- Vehicle charging and refuelling stations
- Energy efficiency technologies
- Waste-to-energy and recycling
|
| 3. Watching Brief Technologies |
- Prospective technologies with transformative potential – typically overseas developments.
|
- Small modular reactors
- More efficient transport technology
- Low carbon building materials
|
| 4. Mature Technologies |
- Existing, proven technologies – not a focus of the Roadmap.
- The Government will support mature technologies in the event of market failure.
- Future investment in mature technologies will primarily be driven by the private sector.
|
- Coal
- Gas
- Solar
- Wind
- Hydro
|
*On Electric Vehicles (EV), as part of the $1.9 billion ARENA package, the Government has announced the creation of the Future Fuels Fund. An initial $75.4 million has been ear-marked to support the adoption of EV chargers and infrastructure by businesses in key EV-infrastructure blackspots. ARENA has indicated grants will in particular focus on businesses seeking to operate fleets of EVs. The Fund will also assist other emerging transport technologies including hydrogen and biofueled vehicles.
We await further information regarding the Federal budget initiatives for EV this week.
Priority Low Emissions Technologies and Stretch Goals
Within the Priority Low Emissions Technologies category, the Government has identified five priority technologies and tied each to a stretch goal.
| priority technology |
stretch goal |
1. Clean hydrogen
Use of hydrogen to power vehicles, generate heat and electricity, use as an industrial feedstock, export as a commodity to global markets.
|
H2 under $2 per kilogram
Clean hydrogen priced at under $2 per kilogram – which will enable hydrogen to become commercially competitive.
|
2. Energy storage
Facilitate more low-cost solar and wind in the grid and boost system security. |
Energy storage under $100 per MWh
Electricity storage for firming priced under $100 per MWh – which will enable reliable, firmed wind and solar at prices competitive with the average wholesale electricity price in the NEM for conventional mid-merit gas generation.
|
3. Low carbon materials
Significantly reduce emissions while promoting job creation and security. |
Steel under $900 per tonne and aluminium under $2,700 per tonne
Low emissions steel production under $900 per tonne and low emissions aluminium under $2,700 per tonne to retain cost-competitiveness.
|
4. CCS
Decarbonisation of hard-to-abate industries (ie, oil and gas extraction and processing, cement manufacturing, etc). |
CCS under $20 per tonne
Compression, hub transport and storage under $20 per tonne of C02 to position CCS as competitive with other forms of carbon abatement. |
5. Soil carbon
Promoting carbon sequestration in soil by improving land management practices on crop and grazing lands. |
Soil carbon under $3 per hectare
Measurement under $3 per hectare per year – a 90% reduction from today's measurements costs which would transform the economics of soil carbon projects for Australian farmers. |
Ashurst is actively involved in a number of projects that utilise the technologies above, including on structuring investments, project development, contracting and regulatory guidance.
We will continue hosting webinars that contribute to industry participation in these areas. Please contact us if you would like to participate.
Authors: Paul Newman, Partner; Cassandra Wee, Counsel; and Alex McLeish, Lawyer.
