Accelerating to net zero will require a step-change in how the Australian oil and gas sector operates, with carbon capture and storage expected to play a key role, according to Minister for Resources, Madeleine King.
“If Australia is to meet its emissions reduction targets for 2030 and net zero for 2050, the industry’s emissions must come down,” said King.
In 2020-2021, 8.4% of Australia’s total emissions came from the extraction and processing of natural gas and oil.
“Perhaps the single biggest opportunity for emissions reduction in the energy resources sector is through carbon capture and storage (CCS).
“CCS represents an opportunity for Australia if we get it right. The will is there. The know-how is there.”
She told delegates at APPEA 2023 in Adelaide that the government “is strongly committed to reaching its net zero emissions target by 2050”.
“The government has taken decisions in recent months to implement our agenda, including legislating landmark climate reforms that enable Australia to reach our net zero commitments,” said King.
She described gas as “a highly flexible fuel” that can be quickly ramped up and down and is needed in power generation to support peaking and firming and greater reliability in the grid as renewables increase.
“But at the same time, the gas industry is a major contributor to Australia’s emissions profile.”
King acknowledged that government has a role in supporting industry investment by reducing risk and creating certainty through clear legal and regulatory frameworks and robust policy guidance.
“To this aim, the government, through last week’s Budget, committed to examining opportunities to provide regulatory and administrative certainty for CCS projects in the resources industry, as well as broader industrial use cases.
We want a regulatory system for offshore CCS that is robust and “responsive, and positions Australia’s resources sector to bring new CCS projects online.”
She explained that the Safeguard Mechanism does not just provide an incentive for new CCS projects to meet abatement goals, it also opens the possibility for the earning of Safeguard Mechanism credits if CCS projects are successful in lowering emissions below baselines.
Australia last year awarded the first two new offshore greenhouse gas storage permits in 14 years but there is still scope to significantly scale up the nation’s CCS capacity.
“To this end, and in recognition of the need to scale up CCS, the Government will shortly commence public consultation on a new round of greenhouse gas storage acreage,” King said.
Australia’s government is also developing a Roadmap for Establishing a Decommissioning Industry, which will look at opportunities to grow a local skilled workforce and create supply chains and pathways for the ethical and responsible management of decommissioning activities for the offshore industry.
“Essentially, it’s about putting us in a position to capture the opportunities from the estimated A$60 billion (US$40.2 billion) of offshore petroleum decommissioning activities expected to occur in Australia over the next 30 to 50 years.”