A DRIVE to establish new industry and jobs using Latrobe Valley’s brown coal in non-energy ways is effectively dead, after the state government stopped funding research into the work, a decision denounced as “folly” and “ideological madness” by local leaders.

Australian Carbon Innovation (ACI) at Federation University, which since 2011 has been researching the non-energy use of brown coal that does not produce greenhouse gas emissions, will close on June 30 after the government pulled the plug on funding.

Brown coal, which is two-thirds water, produces carbon dioxide when burnt in power stations.

The chief executive of ACI, Brian Davey, described the action as “folly of the highest degree”, while Federal Member for Gippsland, Darren Chester, said it was a direct result of neglect by the state government, which had given up on securing new jobs in the Latrobe Valley from the brown coal asset.

“Sadly, this is yet another example of the ideological madness from the extreme Green movement which has captured the modern Labor Party, particularly in Victoria. Funding research and helping to develop alternative uses for the incredible natural resource we have in our region used to be an issue of bipartisan support, but the Labor Party has abandoned all logic,” he said.

“We don’t have to burn the brown coal for it to be a valuable source of 21st century jobs, and other countries are already developing alternative uses, but the Labor Party refuses to recognise the opportunities in the Latrobe Valley.

“The Prime Minister claims he wants to support modern manufacturing and industry in Australia, but his mates in Melbourne are cutting funding for the Australian Carbon Innovation and its important research.”

In a statement, ACI said it had made the difficult decision to cease operations, effective on June 30, after careful consideration of all the options. It had become increasing difficulty in attracting support to develop low emission, high-value products from Victoria’s largest single resource – lignite.

“Despite the company’s efforts to provide options to move away from high emission power production but retain high-paying and valuable jobs in the Gippsland region, the challenges posed by a difficult investment environment exacerbated by government neglect have led to this difficult decision,” ACI said.

Mr Davey said along with the rest of the world, Victoria was undergoing a revolution in energy supply and manufacturing processes to meet the challenge of reducing atmospheric emissions.

“From its inception, ACI accepted the IPCC assessment of climate change science and the urgent need to cease the burning of fossil fuels for energy and other industrial processes where that required release of greenhouse gases into the atmosphere. However, carbon is essential to all life on earth and fundamental to most industrial processes, including production of all the renewable and energy efficiency technologies,” he said.

“The application of the philosophy to ‘decarbonize’ across the board is therefore misleading. To date, all that has changed is that Australia has exported its jobs, manufacturing industry and wealth offshore, resulting in continuing growth of global atmospheric emissions generated by countries which produce the goods we continue to import.

“For the Victorian government to abandon a key resource that will assist in that transition appears to be a folly of the highest degree. Victoria has wasted the opportunity to build a low emission economy based on a vast carbon resource in Gippsland.”

ACI has been the primary vehicle for research into lignite and the low emission products from brown coal since 2011.

These products include but are not limited to: hydrogen, metallurgical char, carbon anodes, blast furnace injection coal, activated carbons for water and chemical clean up, humic and fulvic acids for agricultural bio-stimulants, fertiliser supplements to reduce the per hectare rate of traditional fertilisers, carbon fibre, graphene, graphene oxide and carbon quantum dots.

Mr Davey said the company was committed to a smooth transition and would be taking the following steps:
-ACI is dedicated to supporting its employees during this transition and all employee entitlements will be met;
-All current research programs will be finalised prior to closure. ACI is working with project leads to ensure a smooth conclusion to this valuable research, and;
-The website will be maintained for a period of time to ensure the reports and data contained on the site is available to stakeholders.

“We are deeply grateful to our employees, members, and partners who have been with us throughout this journey,” Mr Davey said.

“We want to express our deepest gratitude for the support and collaboration we have had with key stakeholders over the years. Our journey would not have been the same without our valued member companies, and we are proud of the work we have accomplished with them.”

Last year, Mr Davey attended a US conference that discussed $US13.4 billion available in President Biden’s Inflation Reduction Act for ‘coal to other products’.

The IRA climate legislation has more than $A500 billion worth of programs and funding to accelerate the transition to net zero in the US.

Mr Davey said US researchers were mainly using the IRA funding for projects in carbon fibre, rare earth minerals, CO2 capture and utilisation, graphites and graphenes.

“The things they are doing is what we would like to do in Victoria. The difference being the US has supported research into low emission, alternate products from coal and we have not,” he told the Express last year.

Mr Davey said the US conference delegates, both Democrats and Republicans, found it difficult to understand that Victoria has this huge resource (lignite), which is much bigger than their resource.

“They could not understand how we would not be utilising this resource in Australia. They could not get their heads around it – how much coal we have and why we would not use that coal. It seems like a natural advantage the state has,” he said.

In Australia, inspired by the US IRA Act, the Albanese federal government is developing a ‘Future Made in Australia Act’ that aims to bolster manufacturing by emulating the IRA’s clean energy and supply chain subsidies.

Since 2009, ACI had received more than $20 million in research funds from the state and federal governments, with two-thirds from the state. This had converted to R&D outcomes exceeding $60 million in value within 60 individual projects, Mr Davey told the Express in 2022.

“Not a huge amount of money is involved. In the scheme of things, compared to a new train line, for example, it’s ‘chicken feed’ – stuff you would find down the back of a couch. And it maintains the capability in Victoria,” he said.

Brown coal, a resource with a life of more than 500 years, contributed more than 20 per cent of gross regional product and a long-term economic value estimated at trillions of dollars.

“It risks becoming a stranded asset,” Mr Davey told a Victorian parliamentary committee in 2022.

Mr Davey emphasised that ACI focussed on the use of brown coal for its mineral value, not for use as a fuel.

“Lignite (brown coal) is essentially a mixture of carbon, organic compounds and water and by itself is not a greenhouse gas. To ignore Victoria’s largest and most valuable resource on ideological grounds risked the future prosperity of the region and the state,” he said.

“Life on our planet is carbon-based and carbon itself is not the problem. All industry, including renewable energy, uses carbon in a variety of ways. The use of carbon is fundamental to agriculture, pharmaceuticals, construction (production of steel and cement) and transport. Carbon fibre is used to build planes, trams, trains and cars. Renewable energy technologies – solar, wind and batteries – have an essential carbon component.”

The state government was a asked for a comment but had not replied at the time of print.