A new report commissioned by the Federal Government has laid the groundwork for deployment of a $2 billion fund to support climate change abatement solutions.
In October 2019, the Federal Minister for Energy and Emissions Reduction, Angus Taylor, commissioned an expert panel, chaired by former Origin Energy Managing Director Grant King, to identify new opportunities to unlock low cost abatement across the economy.
The recommendations outlined in the King Review are intended to help Australia exceed its current international commitments and create a pathway for ongoing emissions reductions beyond 2030 to meet future commitments under the Paris Agreement.
The release of the King Review looks to build on the Emissions Reduction Fund and is the next step in the Federal Government’s approach to reducing emissions.
Mr Taylor said this approach aimed to incentivise voluntary emissions reductions on a broader scale, without imposing new taxes on households, businesses or the economy.
Mr Taylor said the Federal Government will look to deploy the $2 billion Climate Solutions Fund to support Australian farmers, businesses and communities to adopt new technologies that reduce emissions and increase efficiency and productivity across the industrial, manufacturing, transport and agriculture sectors.
“The Government will target dollar for dollar co-investment from the private sector and other levels of government to drive at least $4 billion of investment that will reduce emissions across Australia,” Mr Taylor said.
“We have seen considerable success in the land and electricity sectors to reduce emissions – this is about supporting and capitalising on new and exciting opportunities in the agriculture, manufacturing, industrial and transport sectors to build on that success.”
The King Review makes 26 recommendations across three themes:
- Enhancing the Emissions Reduction Fund to encourage greater participation
- Incentivising voluntary emissions reductions on a broader scale
- Unlocking the transformative low emissions technologies that businesses need
Key recommendations supported by the Federal Government include:
- Reducing red tape for small ERF projects and increased industry involvement in the development of new methods to participate in the ERF
- Supporting investment in projects that reduce emissions, through a below-baseline crediting mechanism for Safeguard-covered facilities
- Developing a co-investment program to accelerate technologies with high potential, in ‘hard to abate’ sectors like heavy industry and transport
- ARENA and the CEFC should support the widest possible range of technologies that reduce emissions
The Federal Government’s approach to reducing emissions will be developed further through the Technology Investment Roadmap, which will soon be released for public consultation.
“Our 2030 Paris target is a floor not a ceiling. These reforms will position Australia to overachieve on our 2030 Paris target while maintaining a strong economy,” Mr Taylor said.
Australia is on track to exceed its 2020 emissions reduction target by 411 million tonnes. The $3.5 billion Climate Solutions Package maps out how we will achieve our 2030 Paris target.
The Emissions Reduction Fund has successfully contracted more than 190 million tonnes of emissions reductions at an average price of around $12 per tonne.
The Technology Investment Roadmap will support the development of new technologies that will reduce Australia’s emissions, and create new industries and jobs, and ensure Australia has access to affordable and reliable energy as it recovers from the COVID19 pandemic.
The King Review and the Federal Government’s detailed response to the recommendations are available online here.