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Speech at the International Conference on Coal, Science and Technology



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minister.industry.gov.au http://www.minister.industry.gov.au/ministers/frydenberg/speeches/international-conference-coal-science-and-technology

International Conference on Coal, Science and Technology

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I

am very pleased to have the opportunity to speak to you today, on behalf of the Prime Minister of Australia, the Hon Malcolm Turnbull MP.

I’d like to acknowledge my fellow speakers in this session:

Professor Colin Snape, from the Faculty of Engineering, University of Nottingham, and

Professor Kouichi Miura, from the Institute of Advanced Energy, Kyoto University.

It is great Australia is hosting this forum for the third time in the event’s history, putting the spotlight on the vital field of low emissions technologies research.

Today I’d like to talk about the importance of the resources sector, in particular the coal industry, to the Australian economy and global energy security.

I will also look at the exciting opportunities that new technologies are offering to lower emissions from the use of coal, which is important to our environmentally sustainable future.

Coal’s importance for Australia

That all Australians have benefited enormously from the resources boom is unquestionable.

We are now in the third phase of the boom, which is seeing significant increases in export volumes, and Australians are continuing to benefit.

This follows the first phase of the boom, which saw a rapid increase in commodity prices, followed by the investment response.

The massive $400 billion investment in the Australian resources industry driven by the decade long super-cycle over the period from 2003 to 2014 has expanded our economy and lifted the average Australian household’s weekly income by $100 per week.

This has been an unparalleled experience in Australia’s economic history.

Investment in thermal and metallurgical coal exports has been a crucial part of the picture, with coal exports rising by almost 70 per cent over the past decade and set to increase further.

Exports of coal represent 22 per cent of our total resources and energy exports and, in 2014-15, were the second highest export earner for Australia at around $38 billion.

Australia is now the largest exporter of metallurgical coal in the world and the second largest exporter of thermal coal, behind Indonesia.

Projections by my department show steady growth in the production of both metallurgical and thermal coal well into 2020, which will help meet growing global demand.

The coming decades will see an increase of about one-third of global demand for energy, much of this increase

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fuelled by growing prosperity and populations in Asia.

Australia is well placed to help meet this demand given our abundant natural energy resources like coal and our

proximity to Asia.

Australia produces some of the world’s highest quality coal, both in terms of its energy content and low levels of

impurities.

Some 61 per cent of our total electricity generation comes from coal-fired generation.

The Australian coal industry employed 41,000 people directly in 2014-15 and several times that number indirectly.

The coal sector is also a major employer of Indigenous Australians.

I was heartened to hear that at the recently opened Maules Creek Coal Mine, over 10 per cent of the workforce was

Indigenous.

A vibrant and productive resources sector will be crucial to Australia’s future prosperity and the coal sector will be a

central part of that story.

Challenges

Of course, it is undeniable that the industry is experiencing challenging times with the decline in coal prices.

This return to long-term fundamentals has been driven largely by the expansion in supply and not a collapse in

demand, as some commentators suggest.

It is also not unexpected and is consistent with commodity cycles.

However, it does mean the industry is focussing on reducing costs and improving productivity in order to maintain

profitability.

I know the Australian industry has made impressive cost saving gains of over 30 per cent in some instances by

working smarter and finding more innovative practices.

Much of what you have been discussing here at this conference is an important part of building that long-term

prosperity through discovery and innovation.

Coal and global energy security

I’d now like to touch on the global relevance of coal.

Energy resources like coal and petroleum have served the world well and will continue to do so into the future.

Consider the magnitude of the world’s energy needs.

According to the International Energy Agency, 1.3 billion people live without access to electricity.

As economies grow, so do their demands for energy.

Tackling the challenges of energy security and access to energy will require drawing on all energy sources,

renewable and non-renewable.

For many economies facing these challenges, coal will be an important fuel source for very good reasons - it is

reliable, cost effective and widely available.

This is especially the case for countries in our region, including India, China and other Asia-Pacific economies with

large or growing populations.

It is little wonder that projections by the International Energy Agency show there will be a major and continued role for

coal in the world for decades to come.

Coal, technological change and cutting greenhouse gas emissions

Technology will also play an important role in this sector - resulting in the production of more energy and lower

emissions.

In Paris this year, and beyond, countries will sign up to international action to reduce carbon emissions.

The Australian Government has committed to play its part by cutting greenhouse gas emission by 26 per cent to 28

per cent below 2005 levels by 2030.

This is a strong, economically responsible and achievable emissions reduction target.

It doubles our current target and reduces current per capita emissions by at least half.

Complementing this are measures to increase Australia’s energy productivity by up to 40 per cent by 2030 and foster

the development and uptake of low emission technologies.

Within this policy mix there is a strong role for the coal industry and, in particular, the development of low emissions

technologies.

Low emissions technologies, including carbon capture and storage—or CCS—have the capacity to substantially

lower carbon emissions.

The International Energy Agency has continued to point to the necessity and viability of CCS as a carbon abatement

technology, within a portfolio of other low-carbon technologies.

In its

Energy Technology Perspectives 2015

report, the IEA cited a recent carbon capture and storage breakthrough.

The report notes:

“… the 2014 opening of the first commercial-scale coal-fired power plant with CO2 capture marked a significant

milestone for CCS, demonstrating that fossil fuels can be part of a sustainable energy system.”

The IEA is referring to a power plant operated by a Canadian utility company, SaskPower, not far from the North

Dakota border.

That this innovative technology is achievable is not lost on those of you undertaking research for reducing fossil fuel

emissions—and the need for it is warranted.

Developments in CCS and low emissions coal technology will be essential for meeting Australia’s greenhouse gas

emissions reduction targets.

They’re also vital for maintaining the long-term health of Australia’s coal industry.

That is why the Government is serious about the science behind coal, the science that drives our energy industry and

the links between science and Australian industry.

Australia has world-class scientists who conduct leading-edge research with state-of-the art facilities in first-rate

research agencies and tertiary institutions.

The coal and energy sectors are areas where Australia has significant competitive strength.

The newly established Oil, Gas and Energy Resources Growth Centre will help us maintain that edge.

It will provide opportunities for companies operating in the sector to forge stronger links with our science and research

agencies to aid innovation and lower costs.

Australia has a lot to gain from harnessing its science and research resources more effectively to develop its energy

industry.

Take, for example, our abundant lignite deposits. They have more to offer Australia than they currently do, but we

need the help of our scientists and researchers.

At the moment, we are investigating innovative ways to convert lignite to higher value energy products such as

pyrolysis oil or synthetic crude oil.

This year, the Australian and Victorian Governments will seek to jointly invest in projects in Victoria’s Latrobe Valley

under the Advanced Lignite Demonstration Program.

The investment will enable the development of two demonstration plants producing high-value products, including oil,

fertiliser and upgraded coal.

The Australian Government is committed to the development and use of low emissions technologies.

The commercial potential is there and achievable, so the Government and Australian industry are continuing to fund

several low emission technology demonstration programmes and activities.

We’ve invested in large-scale carbon storage demonstration projects to study how we can safely and permanently

store carbon in geological sites around Australia.

We’ve also invested in programs to reduce the emissions coming from activities related to coal mining and to

enhance understanding of the science behind CCS.

The world’s largest research and geosequestration demonstration project is in Australia, in the Otway region, here in

Victoria.

The CO2CRC Otway Project is Australia’s first demonstration of the deep geological storage or geosequestration of

carbon dioxide.

The project includes an outstanding monitoring program, believed to be the most comprehensive of its kind in the

world.

Other initiatives include:

the CCS Flagship CarbonNet project in Victoria

the Australian National Low Emissions Coal Research and Development organisation

the Callide Oxyfuel Project in Central Queensland, the world’s first industrial-scale demonstration of oxyfuel

combustion and carbon capture technology

the Coal Methane Abatement Technology Support Package, which provides assistance to the coal industry’s

research activities to facilitate the commercialisation of fugitive methane abatement technologies, and

the new $25 million CCS Research Development and Demonstration programme, which has just opened for

applications.

International collaboration

The Australian Government also recognises the importance of international collaboration in tackling global challenges

such as carbon emissions.

That is why we support bilateral research programmes for low emission technologies.

The Australia-China Joint Coordination Group on Clean Coal Technology and the Australia-China Joint Research

Centre for Energy are good examples.

They facilitate the development, application and transfer of low emission coal technology for the mutual benefit of our

two nations.

My department works closely with China’s National Energy Administration to progress a range of low emission coal

projects, from research and development to industrial-scale CCS.

This collaboration has seen up to $12 million invested in the Australia-China Post Combustion Capture project, an

industrial scale feasibility study in China.

International collaboration on low emissions technology is vital if we are to meet our emissions reduction target and

achieve energy security.

Conclusion

For over two decades, Australia has experienced continuing economic growth, an unparalleled achievement in which

our energy resources sector has been a key player.

Australia’s energy industry can and will continue to support our prosperity and the prosperity of countries in our region

for decades to come.

But we need to keep an eye on our policy settings, ensuring we’ve got a strong energy mix, renewable and non-

renewable, to meet the growing world demand in energy.

That is why the Australian Government is committed to a technology-neutral policy and regulatory framework to

support new energy sources and enable change, innovation and transformative technologies.

This includes government support for low-emission and CCS technology research, development and deployment.

The long-term outlook for the coal mining sector will benefit from innovation to reduce greenhouse gas emissions,

which will be made possible by researchers like you.

Research such as that shared at this conference has the potential to lead to the breakthroughs that we need in low

emissions technology.

With your program packed with presentations by some of the best minds in coal science and technology, I know it’s

been an extremely engaging time and I hope you enjoy the rest of your conference.

Thank you.

Ends