2016-2017

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

CLEAN ENERGY FINANCE CORPORATION AMENDMENT (CARBON CAPTURE AND STORAGE) BILL 2017

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

(Circulated by the authority of the

Minister for the Environment and Energy, the Hon Josh Frydenberg MP)

 

CLEAN ENERGY FINANCE CORPORATION AMENDMENT (CARBON CAPTURE AND STORAGE) BILL 2017

 

OUTLINE

The Clean Energy Finance Corporation (the “CEFC”), as established by the Clean Energy Finance Corporation Act 2012 (the “CEFC Act”), has the objective of facilitating increased flows of finance into the clean energy sector. The CEFC meets this objective by making investments which attract private sector finance, as well as through working with its strategic co-financing partners to catalyse flows of money into the sector.

The CEFC’s investment function is set out in Part 6 of the CEFC Act. Under Part 6, the CEFC must invest in “clean energy technologies” (i.e. energy efficiency, low-emission or renewable energy technologies) [1] and its investments must be solely or mainly Australian-based. [2] Relevantly, the CEFC must also ensure it does not invest in a “prohibited technology” (i.e. technology for carbon capture and storage, nuclear technology or nuclear power). [3]

The Clean Energy Finance Corporation Amendment (Carbon Capture and Storage) Bill 2017 (the “Bill”) removes the prohibition on the CEFC investing in carbon capture and storage technologies.

POLICY RATIONALE

Delivering emissions reductions under the Paris Agreement on climate change will be a significant challenge, and will require deployment of a portfolio of low emissions technologies across the world. Advice from the International Energy Agency is that carbon capture and storage has an essential role and can support a least-cost transition of the energy sector.

Here in Australia, applying carbon capture and storage technology to non-renewable electricity generation would help provide security and stability for the electricity grid while significantly reducing emissions compared to business-as-usual operation of fossil fuel fired generation.

Carbon capture and storage technology can also help reduce emissions from carbon-intensive industrial processes. Some major industrial activities have a large emissions burden from the energy and chemical reactions inherent in their production processes. The Bill provides a potential support to industrial producers who wish to address such emissions.

FINANCIAL IMPACT STATEMENT

While the Bill alters the mix of clean energy projects the CEFC may invest in, it will not impact the funding available to the CEFC to invest with. The Bill does not alter the CEFC’s legislated appropriation or have the effect of actually requiring the CEFC to invest in carbon capture and storage projects. [4] For these reasons the Bill has no financial impact.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

CLEAN ENERGY FINANCE CORPORATION AMENDMENT (CARBON CAPTURE AND STORAGE) BILL 2017

 

These Bills are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

The purpose of the Bill is to permit the Clean Energy Finance Corporation to invest in carbon capture and storage projects.

Human rights implications

The Bill does not engage any of the applicable rights or freedoms.

Conclusion

The Bill is compatible with human rights as it does not raise any human rights issues.

 

Circulated by the authority of the Minister for the Environment and Energy, the Hon Josh Frydenberg MP

 

NOTES ON CLAUSES

Clause 1 - Short title

1.      Clause 1 provides that the short title of the Act is the Clean Energy Finance Corporation Amendment (Carbon Capture and Storage) Act 2017 .

Clause 2 - Commencement

2.      Clause 2 provides that the Act commences on the day after the Bill receives Royal Assent.

Clause 3 - Schedules

3.      Clause 3 is a formal enabling provision specifying that each Act specified in the Schedule to the Bill is amended as indicated by the Schedule. Schedule 1 then contains the amendments the Act makes to the CEFC Act.

Schedule 1 - Investment in technology for carbon capture and storage

Item 1 - Paragraph 62(a)

4.      Item 1 removes paragraph 62(a) from the CEFC Act. This has the effect of removing the prohibition on the CEFC investing in carbon capture and storage technologies.