Emission Control: Renewable energy gets… a nothing burger under Federal Budget 2022
The Morrison government has been criticised for totally missing the mark when it comes to cementing Australia’s place as a global clean energy superpower.
As highlighted in the 2022-23 budget papers, climate spending is set to fall from $2bn next financial year to $1.9bn, $1.5bn and $1.3bn in the years that follow – representing a 35% annual cut over the next four years if Morrison is re-elected.
While Treasurer Josh Frydenberg announced further investment in micro grids “to support remote communities that don’t otherwise have access to the grid with small-scale renewable energy projects like solar and wind”, climate spending only represents about 0.3% of overall spending from 2021-22 to 2023-23.
It then drops even further to 0.2% of spending in 2024-25 and 2025-26.
The Government has committed about $1.3bn to energy and emissions but LNG gas analyst with the Institute for Energy Economics and Financial Analysis Bruce Robertson says putting these two categories together is problematic as most of the spending is going to high-emitting projects.
“This funding allocation shows a strong focus on gas, carbon capture and storage (CCS), carbon capture utilisation and storage (CCUS), and hydrogen, all of which add to Australia’s and global emissions, not reduces them,” he said.
“While important centres in Queensland and New South Wales are suffering flooding for the second time in a month, and it’s just over a year since the east coast of Australia was affected by extreme bushfires, the government is putting money into the very energy projects that have been globally recognised as increasing climate damaging emissions.”
He added that subsidising the production of blue hydrogen in the Pilbara and Darwin is “far from reducing emissions” given that blue hydrogen is produced from natural gas with carbon capture and storage (CCS).
“It produces more greenhouse gases than just burning the gas, according to Stanford and Cornell University scientists,” he said.
“The carbon capture utilisation and storage (CCUS) proposed in the Pilbara involves pumping carbon dioxide into depleted oil and gas wells to produce more oil and gas – hence yet more emissions.”
Here’s a breakdown of the energy and emissions ‘reduction measures’ contained in this year’s budget:
Electric vehicles have been overlooked, with the budget failing to include anything for EV owners, even critical things like EV rebates and fuel efficiency standards, which would put Australia on par with other developed nations.
The Electric Vehicle Council has said demand for EVs in Australia is now drastically outstripping supply due to Australia still being perceived by global carmakers as an unattractive market.
While consumer demand for EVs is surging, many Australians who want to purchase an electric car are being told they may have to wait many months, or even years, and Electric Vehicle Council chief executive Behyad Jafari said the federal government’s refusal to move on fuel efficiency standards was a key driver of the supply restriction.
Clean Energy Council chief executive Kane Thornton said the Federal Budget fails to look to the medium-to-long term future through an all-important lens of reducing the emissions that are having a devastating impact on the climate, the environment and on the lives of everyday Australians.
“The transport sector accounts for nearly 20 per cent of Australia’s emissions – the Government’s own target is for 30 per cent of all new car sales being electric by 2030,” he said.
“But the budget doesn’t get us any closer to that target.”
Anyone who says we can’t afford – or that it’s not good value for money – to subsidise electric vehicles, that would end our dependence on imported oil, needs to shut up.
— Behyad Jafari ⚡🚘 (@BJafari) March 29, 2022
Another forgotten sector was renewable energy, which requires significant investment to make the green energy transition run smoothly.
Rather than prioritising the lack of transmission investment facing the renewable energy sector – one of the most critical challenges facing the space today – or investing in low-cost renewable energies and storage, the Government has decided to splash money in fossil fuels.
“It is also telling that spending through both the Australian Renewable Energy Agency and the Clean Energy Finance Corporation, which were set up to increase investment in renewable energy and to support the Federal Government in its commitments to reduce carbon emissions, will decline over the next four years,” the Clean Energy Council said in a statement.
Renewable energy giant and Fortescue Metals Group’s (ASX:FMG) green leg, Fortescue Future Industries, has inked a $50 billion deal with E.ON to deliver up to 5 million tonnes per annum of green, renewable hydrogen (GH2) to Europe by 2030.
On Tuesday, the two companies signed a memorandum of understanding to execute the ambition with each side committing to a research and study partnership.
Both entities will work together, in collaboration with their governments, regarding how to achieve supply as fast as possible, in the spirit of the Australia-Germany Hydrogen Accord announced in June 2021 at the G7.
It is intended that such large amounts of renewable GH2 will be powered by Australia’s immense renewable resources as well as FFI’s other planned global projects, and will be distributed by E.ON.
FFI’s parent company, FMG, released a media clarification referring to a comment made by founder Twiggy Forrest at the signing of the MoU.
“On both sides, it will be like a duck swimming,” he said.
“The two companies’ executives would be ‘really calm’, but ‘underneath, our organisations will be going like crazy, because for us it’s a minimum $50 billion expenditure’.
The release highlighted that the expenditure described “is a high-level assessment by the chairman of what such a major project may cost and is appropriate in the environment the statement was made to provide context and scale of the potential of the MoU”.
“Fortescue clarifies that there is no commitment to this expenditure and all such final investment decisions will be at the sole discretion of the Fortescue board.”
Qantas Group (ASX:QAN) released an Climate Action Plan yesterday, highlighting sustainability as a key pillar of decision-making across all areas of business.
As one of the first airlines to commit to net-zero emissions by 2050, QAN said yesterday’s announcement of an interim target of 25pc reduction by 2030 is designed to accelerate that progress.
The plan includes key targets for fuel efficiency and the uptake of sustainable aviation fuel (SAF), as well as reducing waste and continuing to grow the group’s carbon offsetting program have been revealed.
Targets for reducing its environmental footprint include: