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Monday, 22 September 2008
Page: 8074


Mr TREVOR (2:50 PM) —My question is to be Prime Minister. Will the Prime Minister outline the importance of the government’s global carbon capture and storage initiative to the international fight against climate change?


Mr RUDD (Prime Minister) —I thank the honourable member for Flynn for his question. His electorate and the electorates of many around this House are acutely conscious of the importance of coal-fired power generation now and into the future as well as the importance of coal exports into the future. If we look at the statistics, that concern is registered loud and clear. Eighty per cent of Australia’s electricity comes from coal-fired power stations. Coal is the backbone of regional Australia in many regions—from Mackay to Muswellbrook to Moe. Coal also fires 40 per cent of the world’s power generation and will continue to do so for a long time to come. It is also Australia’s biggest export.

The practical challenge we face is how we deal with those economic realities on the one hand and the fact that 40 per cent of energy related CO2 emissions in 2005 came from coal-fired electricity generation. This brings us to carbon capture and storage. Carbon capture and storage is an important technology option for the future. It is an important practical option for the future. It is important in the overall response to climate change within Australia and internationally.


Mr Hunt interjecting


The SPEAKER —I warn the member for Flinders!


Mr RUDD —The International Energy Agency says that improved energy efficiency and CCS—carbon capture and storage—represent the two most viable options currently available to bring down greenhouse gas emissions into the medium term. That is why the government embraces both of those courses of action.

You can see the beginnings of demonstration projects in the Otway Basin in Victoria. You can also see it at the Callide A power station in Queensland and the oxy-fuel combustion technology which is proposed to be trialled there by way of retrofitting, and you can also see post-combustion capture technology in two other power stations in Australia—one in black coal in New South Wales and the other to be based in brown coal in Victoria. On Saturday I took the opportunity to visit Santos’s operations in Moomba and for them to brief me on their proposals for a three-stage carbon capture facility—the Moomba carbon storage project. This is an exciting project. I commend the company for their active support for CCS technologies. Together with those other project possibilities around the country, we begin to see the emergence of a way forward in bringing down greenhouse gas emissions from coal-fired power stations and, more generally, from carbon based fuels in Australia.

On Friday, the Minister for Resources and Energy, Martin Ferguson, and I launched a global carbon capture and storage institute, which Australia will support. What is the proposal? It goes into two parts. Right around the world at present you see a whole range of research going on but ineffective coordination of that research and, with the four principal technologies alive with carbon capture and storage, you see very thin at-scale industrial application of these technologies. The problem we face is that time is running out. We need to make sure that these industrial scale projects get going.

The best definition of an industrial style project is something 250 megawatts or more. So many of the projects which are currently underway around the world which go by the rubric of demonstration projects are very small indeed. We need to have them at scale not only so we can demonstrate that the technology works at scale but also so we can calculate the cost differential between a 250-megawatt station without CCS technology applied as opposed to one with CCS technology applied and then work out where that difference is to be met in the future by way of investment activity by government, corporates and others. This of course is directly relevant to the future architecture of the Carbon Pollution Reduction Scheme as well.

Why we have put forward this global carbon capture and storage institute is to assist in bringing together all this research and technology investigatory activity around the world into a single entity to the best extent possible. This is a global public good and the world needs to have a go-to place to access that technology for at-scale projects. But there is one further reason, and this is also the big gap at the moment.

Opposition members interjecting—


Mr RUDD —Those opposite find this enormously amusing. I do not find climate change at all amusing. I find it a real challenge for the future, and finding practical ways of responding to climate change is the way ahead. The second reason for a global carbon capture and storage institute is that, when it comes to identifying projects at scale, you need a clearing house around the world to point would-be investors in the direction of those projects that are most ready to go. At present that is simply not happening. We have put together this initiative in close consultation not only with the Australian coal and resource industry but also with various governments around the world, and there has been an initial expression of support from not just the British government but also other governments.

I say to those who simply catcall from opposite and say that there are problems with this: for 12 years there was a lot of time to act on this, and I have to say that across the country and across the world I do not see a whole lot of action resulting from the various speeches made by others when they occupied the treasury benches and had an opportunity to act.

Here is the challenge: the G8 meeting in Hokkaido said that by 2020 we have to have 20 at-scale CCS electricity projects around the world in order to demonstrate to the world that this technology works and at what price it will work. That is the challenge that has been established. The problem is worldwide that there is no capacity that exists at either the technology level or at the financial clearing house level to bring any such projects to fruition. That is why we have decided to provide leadership. That is why when I am in New York I will be canvassing this extensively with world leaders. That is why it will form a large part of the presentation that we make to global governments: because, for this to work, it is not just that it is an Australian initiative that counts; we need global buy-in. For this to work, we need those 20 projects not just to be designed, not just to be talked about, not just to be floated, but also to be delivered in concrete reality on the ground. That is what this institute is about. I would suggest to the sceptics opposite: get behind it and be bipartisan instead of than just talking about bipartisanship as some cute, political ploy.