Australia's federal government has faced down a second attempt to block regulations that allow the Australian Renewable Energy Agency (Arena) to fund non-renewable projects.

The opposition Labor and Greens parties had moved to disallow the regulations in the Senate, but were unsuccessful in getting the votes necessary to overturn the regulations.

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While Labor had said they would back part of the new regulations, they were specifically targeting to disallow one section that allows Arena to fund blue hydrogen — which is produced using fossil fuels — and carbon capture and storage projects (CCS).

According to Australian media, the disallowance motion pushed in the Senate on Wednesday was tied at 15 votes each, with an outright majority needed to pass motions in the federal parliament.

However, the AAP has reported that the Greens are seeking advice over whether One Nation leader Pauline Hanson, who was not in the chamber, was appropriately paired.

One Nation leader Pauline Hanson’s decision to abstain from a vote in June proved to be decisive in defeating the government’s first attempt to push through similar regulations.

Getting on with the job

Following the defeat of the disallowance, Australia’s Minister for Energy & Emissions Reduction, Angus Taylor, said the government would now get on with the job of supporting the next generation of low emissions technologies.

“The government has defeated a motion of disallowance supported by Labor and the Greens after they did a deal to abandon clean tech and blue-collar jobs,” he said in a statement on Wednesday evening.

“These reforms are about bringing a portfolio of technologies to commercial parity so we can reduce emissions across every sector of the economy, without destroying jobs or imposing taxes or new costs on households, businesses and industry.”

The regulations expand Arena’s remit to be able to fund carbon capture technologies, including CCS, blue hydrogen, long-duration energy storage, measurement technologies for healthier soils and low-carbon materials, including aluminium and steel.

The regulatory changes also clear the way for Arena to implement A$192.5 million (US$142.2 million) of new programmes outlined in the government’s budget, which are estimated to create 1400 direct and indirect jobs.

The funding includes A$67.9 million to support heavy vehicle fuel efficiency and industrial energy efficiency, A$71.9 million to support hydrogen and electric vehicle infrastructure and A$52.6 million to support microgrids for regional Australia.

They form part of the government’s plan to invest A$20 billion in new energy technologies by 2030, which Taylor said would drive at least A$80 billion in public and private investment over the decade and support at least 160,000 new jobs.

Fight not over

While the regulations cleared the Senate, Greens leader Adam Bandt has warned his party will not be giving up on preventing Arena from funding non-renewable projects.

"If Minister Taylor thinks this is over he is wrong," Greens leader Adam Bandt told AAP on Thursday.

"This regulation is unlawful and the government is just trying to deliver for fossil fuel donors."

Labor’s shadow minister for climate change and energy, Chris Bowen, had also warned earlier this week the legality of expanding Arena’s remit to fund non-renewable projects could be challenged.

He noted the object of the Arena Act 2011 is to “improve the competitiveness of renewable energy technologies and increase the supply of renewable energy in Australia”.

Bowen claimed legal experts had advised that funding other technologies would be inconsistent with the object of the Act, and would likely be subject to legal challenge.

'Win for common sense'

The body representing Australia's upstream oil and gas industry, the Australian Petroleum Production & Exploration Association (APPEA), claimed the passing of the regulations was a “win for common sense”.

“All technology, including hydrogen and carbon capture and storage, should be on the table to help reduce emissions. Supporting these common sense measures demonstrates support for practical steps to reduce emissions and help the environment,” APPEA chief executive Andrew McConville said.

“The global oil and gas industry is leading the world in the practical deployment of CCS and hydrogen. In Australia, the oil and gas industry has been at the leading edge of researching and deploying CCS and greenhouse gas storage technologies.”

McConville also highlighted that natural gas with CCS was a pathway for the establishment of a large-scale hydrogen industry in Australia.

“Australia’s LNG export success means the Australian upstream oil and gas industry has the technology, expertise, commercial and trade relationships to make, in particular, hydrogen exports a reality,” he added.

“Developing a local hydrogen industry could enable lower emissions both in Australia and internationally, reduce energy costs, deliver energy security, together with delivering new employment and manufacturing opportunities.”

Climate group pushes back

Australian non-profit the Climate Council said the regulations had "sullied" Arena by allowing the renewable energy agency to "prop up fossil fuels using tax payer money".

“The nation’s renewable energy agency should not be spending money earmarked for renewables on CCS technology. If any investment is made, it should be paid for by the fossil fuel industry. CCS is expensive, unlikely to be effective, and the industry has always over-promised and under-delivered,” said Climate Councillor, and former Arena chair, Greg Bourne.

“Gas is also a fossil fuel that powerfully drives climate change, and hydrogen from gas has no place in Australia’s zero emissions energy future. Only hydrogen made with renewable energy is worth investing in, as customers demand ‘green hydrogen’ in a decarbonising global economy."