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Wednesday, 31 May 2017
Page: 5746

Mr FRYDENBERG (KooyongMinister for the Environment and Energy) (09:50): I move:

That this bill be now read a second time.

The purpose of this bill is to permit the Clean Energy Finance Corporation to invest in carbon capture and storage technologies.

The CEFC invests directly and indirectly in clean energy technologies, helping to drive down their cost. It makes its investment decisions independently of the government, and has a total of $10 billion in available capital.

Under the Clean Energy Finance Corporation Act, the CEFC is prohibited from funding CCS technologies. This bill removes the prohibition and provides the CEFC with the option of investing in CCS technologies.

Access to finance is one of the barriers to investment in CCS technologies. This change will provide direct support for CCS technologies, encourage greater private sector investment and reduce risk for potential investors.

Widening the scope of emissions reduction technologies the CEFC can invest in will also assist in achieving our emissions reduction targets more cost-effectively while delivering on our commitment to maintaining energy reliability and security as we transition to a lower-emissions future.

CCS technology has been acclaimed by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) as critical to enabling the world to meet its emission reduction targets.

CCS is now a proven low-emissions technology. Data provided by the Global CCS Institute and the CO2CRC illustrates that there are 17 large-scale CCS facilities in operation around the world. Further, the institute expects that by the end of 2017 there will be more than 22 facilities operational globally, compared to fewer than 10 at the beginning of this decade.

CCS technology can also help reduce emissions from emissions-intensive industrial processes. The International Energy Agency has stated that CCS is the only option available to significantly reduce emissions from some major industrial processes, such as iron and steel production, cement production and natural gas processing.

By way of example, the Gorgon LNG project in Western Australia will soon become one of the world's largest CCS projects when it begins sequestering up to four million tonnes per annum of carbon dioxide in the coming years.

Removing the prohibition against investment in CCS technologies will allow the CEFC to support a wider range of low-emission technologies and thereby reduce emissions more cost-effectively.

The CEFC's ability to invest in CCS technologies will complement other low-emissions investment by the federal government, including more than $3 billion worth of wind, solar and storage projects since 2013.

Debate adjourned.