Clean coal funds to be stripped

LATROBE Valley’s efforts to secure the long-term, cleaner use of brown coal were thwarted last week when the Federal Government revealed it would rip funds from vital programs.

Following the announcement Australia would move to an emissions trading scheme and away from a carbon tax one year ahead of schedule, Prime Minister Kevin Rudd also flagged cuts to clean coal-oriented programs to help offset forecast federal revenue losses.

Among those was about $200 million from the Clean Technology Program, with more set to return to the coffers, and a further $200 million deferral of funds to the Carbon Capture and Storage Flagship Program, established to accelerate the development of large-scale CCS projects.

Latrobe City Council acting chief executive Carol Jeffs said those cuts threatened the viability of brown coal’s continued use, warning for every year monetary support was deferred the region moved further away from its capacity to see large-scale demonstration plants up and running in the Valley, given the projects had “very long, start-up phases”.

Environment Victoria campaigns director Mark Wakeham, however, said the past two federal budgets had seen a gradual withdrawal of CCS funding, indicating the government’s patience was “running out” with the concept and industry’s failure to co-fund projects.

“I think (Tony) Abbott is planning to cut this even further… and I think the fact there has been so little criticism of these cuts suggests there are not that many people who take the technology seriously,” he said.

The Australian Coal Association was, predictably, at odds with this view. It said a document just released from the International Energy Agency had recognised the critical role of CCS technology in “efficiently reducing the world’s greenhouse gas emissions”.

“The IEA highlights that CCS technology will be part of a range of low emissions technologies needed to lower world CO2 emissions while satisfying growing energy demand,” ACA chief executive Nikki Williams said.

Ms Jeffs said continued support for clean coal development was “key for the generation sector” but also crucial to “seeing forward-looking investment for alternative uses of coal”.

Federal Resources and Energy Minister Gary Gray told The Express the government remained committed to CCS, to the tune of $1 billion, and the recent funding deferral reflected “the current contractual arrangements with the CarbonNet and other CCS projects”.

In February last year $100 million in joint government funding was announced to develop the state’s first CCS project, CarbonNet, intended to capture carbon emissions from Latrobe Valley industries and store it in geological basins.

Mr Gray said it was “the nature of these big emerging energy projects – whether CCS or renewable – that anticipated expenditure may sometimes be delayed beyond original expected timelines as project proponents work through the challenges associated with being “first of a kind” projects.