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The low emissions technology investment roadmap

On 22 September, the Minister for Energy and Emissions Reduction released the first Low Emissions Technology Statement (the Technology Statement). The document clearly shows the Government is moving away from subsidising wind and solar as the technology matures, and looks to support new and emerging technologies that will lower emissions in Australia. According to the Minister, the Technology Statement also focuses on reducing cost and creating jobs. 

The 2020 Technology Statement focuses highlights the following five priority technologies:

1. Hydrogen: It is estimated that the domestic hydrogen industry could generate over 8,000 jobs and $11 billion in GDP by 2050. The focus is on scaling the industry quickly and cost effectively while reducing input and capital costs. Initiatives include creating a regional hydrogen export hub, funding for research and development and the stimulation of domestic hydrogen demand. The Department of Industry, Science, Energy and Resources has also indicated that it will produce a reputable certification and guarantee of origin scheme for hydrogen to facilitate trade opportunities. 

2. Energy Storage: This is key to facilitating low-cost solar and wind electricity in the grid, providing system security services and having a source of reliable, dispatchable electricity. There is a need to have a mix of storage options from pumped hydro to batteries and solar thermal energy storage. 

3. Low carbon metals production (like steel and aluminium): These are important global commodities that already employ thousands in Australia, but more can be done to reduce cumulative emissions while increasing economic activity and jobs. Emerging technologies focus not only on steel and aluminium production, but could also reduce upstream emissions in iron ore mining and alumina production. 

4. Carbon capture and storage: CCS underpins new low emissions industries and provides the potential for decarbonisation of other industries like natural gas processing and cement. The initiatives include establishing a Deployment Fund to support new and emerging technologies and finalising the Emissions Reduction Fund methods to support carbon capture and storage and soil carbon; and

5. Carbon soil sequestration: Improving land management practices in crop and grazing lands can reduce CO2 in the atmosphere and improve agricultural productivity and soil resilience. Initiatives include a soil carbon innovation challenge to rapidly reduce the cost of measuring the impact of new farming practices on soil carbon equestrian. 

The document also outlines stretch targets for each of these priority areas including:
●    producing clean hydrogen under $2 per kilogram;
●    enabling long duration (at least 6 hours) energy storage at under $100 per MWh to match wholesale electricity on price;
●    low emissions steel production under $900 per tonne and low emissions aluminium under $2,700 per tonne;
●    CO2 compression, hub transport and storage for under $20 per tonne; and 
●    soil carbon measurements under $3 per hectare per year, representing a reduction of 90%.

While the Government will invest in the industry, it expects lower emissions technologies to be funded primarily by the private sector. The expectation is for every dollar invested by the public purse $3-$5 (depending on the technology) will come from private enterprise. If this isn’t achieved, further prioritisation of affected technology may occur. This equates to almost $50 billion by 2030, with the Government footing the bill for an additional $18 billion. These initiatives are expected to support 130,000 jobs by 2030 and avoid up to 250 million tonnes of emissions by 2040. 

The majority of the Government’s investment will be in expanding the role of clean energy agencies including the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). 

In the future, Technology Statements will be updated by the newly established Technology Investment Advisory Council.  

While the focus of the Technology Statement is on new technologies, the Minister has indicated that mature technologies like coal and gas will continue to play an important role in Australia’s energy future. In the meantime we can expect more complementary announcements before the year is out, including the national electric vehicles strategy and ARENA’s bioenergy roadmap
 

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