Net-zero zones (NZZs) could be created across Australia to bring together energy producers, emissions reduction technologies, manufacturing and industry to boost the net-zero economy transformation, according to the Australian Petroleum Production and Exploration Association (APPEA).

APPEA chief executive Samantha McCulloch said: “Net zero zones could help Australia accelerate to net zero and seize the economic opportunities of the energy transformation”’ in a report unveiled on the eve of the APPEA 2023 conference.

“In a way, it’s like carpooling carbon emissions by working together to help achieve net zero in the fastest and most cost-efficient way for the economy.”

The nine NZZs — based around existing resources, industrial and manufacturing regions — could be established with shared infrastructure for natural gas, renewables, carbon capture, utilisation and storage (CCUS) technology and low-carbon hydrogen production.

The report found that the zones could cover 79% of the 215 facilities captured by the federal government’s safeguard mechanism and 92% of their greenhouse gas emissions.

Possible zones could be located in Adelaide-Port Augusta and the Cooper Basin in South Australia; Perth and the Pilbara in Western Australia; Melbourne-Gippsland in southern Victoria; Sydney-Newcastle in New South Wales; Brisbane and the Surat Basin as well as Central Queensland; and the planned Middle Arm Sustainable Development Precinct near Darwin in Northern Territory.

The zones are conceptualised in A Review of Net Zero Energy & Industrial Zones, an interim scoping study developed by APPEA with technical support from the Commonwealth Scientific and Industrial Research Organisation.

APPEA said it would use the review’s analysis as a foundation for discussions and engagement with governments, industry and stakeholders across the regions.

“The zones could become magnets for regional investment and provide a framework for different industries to work together to speed up the path to net zero; reduce costs; create and protect jobs in manufacturing, mineral processing and industry; leverage existing infrastructure; provide a focal point for streamlined government approvals and provide the foundation for net-zero energy and industrial exports and imports,” McCulloch added.

“These zones would involve collaboration across different industries. It is about thinking holistically about emissions reductions in these regions.”

She noted that the report highlights that equipping the nine regions with natural gas supply, firmed renewable energy, carbon dioxide transport and storage infrastructure, and low-carbon hydrogen would provide the building blocks necessary to reach net zero in the fastest, most cost-efficient way.

Power generation is the largest source of emissions in Australia, representing 33% of total 2020’s total.

Meanwhile, oil and gas production represents 10% of Australia’s total current emissions. Such emissions include reservoir CO2, power requirements including to drive compression, as well as some fugitive emissions.

For reservoir CO2, CCUS is the most viable option — the majority of CCUS projects globally capture and store CO2 from natural gas production and processing, APPEA noted. The oil and gas sector will also deploy significant renewable energy capacity to provide electricity to facilities.

Compression for liquefied natural gas production is typically supplied by large turbines conventionally powered by natural gas. To align with net zero, these turbines could be driven by low-carbon hydrogen, by natural gas with CCUS, or electrified with renewable power, the review said.

Today 51% of Australia’s electricity demand is met by coal with 18% from gas. Renewable energy provides 29% of Australia’s total electricity generation — solar provides 12%, wind produces 10% and hydro another 6%.

The Net Zero Australia review found that gas power generation capacity would need to double between now and 2050 to provide auxiliary power for when the wind is not blowing, or the sun is not shining.

“Analysis confirms the important role of the gas industry and what it can contribute to the net-zero challenge — cleaner energy and backup for renewable electricity while our infrastructure and expertise can help deliver step-change technologies such as CCUS and low-carbon hydrogen production,” McCulloch said.

“Leveraging existing infrastructure can ensure regions that powered the Australian economy to where it is today won’t be left behind as we restructure our economy for the future.”

Are you missing out on ACCELERATE?
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge.