Green Energy: BloombergNEF says ‘fossil fuel subsidies’ dull G20 climate ambitions
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Will Australia’s fossil fuel subsidies hold it back as the world moves to a net zero economy?
The question now not if, but when will the world decarbonise as pressure grows on governments and major emitters to take more action to combat climate change ahead of the COP26 Glasgow climate dialogue in November.
According to analysis from BloombergNEF and Bloomberg Philanthropies, Australia’s level of support for fossil fuel companies increased by 48% between 2015 and 2019, more than any other country in the G20, although on a per capita basis ($293) it is below Saudi Arabia ($1962), Russia ($523), France ($347), Canada ($446) and Argentina ($734).
Report authors for BloombergNEF Climate Policy Outlook say the bulk of that support has gone to oil and gas consumers in the form of capex tax deductions for mining and petroleum operations, fuel tax credits, reduced fuel excise rates and offset schemes.
They say Australia spent US$38bn in supporting the oil and gas sector between 2015 and 2019, foregoing some US$6 billion in taxes.
Moves by ASIC and APRA to improve climate risk and cost reporting could spur more action, however.
BloombergNEF says the level of fossil fuel support from the world’s 20 biggest economies will make it impossible to achieve ambitious Paris Agreement targets and limit global warming to well below 2C on pre-industrial levels by 2050.
Those countries have spent ~$3.3tn all up supporting the fossil fuel sector, enough to fund enough new solar to power 3.5 US electricity grids.
“Given that the G-20 accounts for nearly three-quarters of global emissions, progress from those governments in these three areas would mark a huge step forward toward tackling climate change. So far, they have yet to step up to the plate,” said lead author Victoria Cuming.
More State Governments have signed up to an industry-led renewable hydrogen guarantee of origin scheme run by the Smart Energy Council.
While the Federal Government’s own proposed “guarantee of origin” scheme is at the consultation phase, WA has followed Queensland, Victoria and the ACT in joining up with the SEC’s framework.
The certification scheme would establish a set of guidelines to guarantee that a hydrogen, ammonia or metal or mining product in Australia is produced by renewable means to help companies market their product and garner premiums likely to come from producing green industrial products.
“When it comes to the renewable hydrogen industry, Western Australia’s competitive advantages gives the State a head start,” WA hydrogen minister Alannah MacTiernan said.
“Signing on to the Smart Energy Council’s Zero Carbon Certification Scheme as a founding partner reflects our commitment to making sure Western Australia continues on its path to becoming an industry leader.
“As a founding partner, our Government will collaborate with the Smart Energy Council and its other domestic and international partners to develop and implement the scheme.”
Among the scheme’s existing partners are Yara Pilbara Fertilisers, which is partnering in the YURI Green Ammonia Project at Mujuruga near Dampier in north west WA.
The State Government has invested $2 million into the demonstration project.
Also in the scheme is CWP, one of the companies behind two massive green hydrogen projects proposed for WA.