Prime Minister Scott Morrison will announce Wednesday $500 million to a new $1B fund to encourage investment in Australian companies that develop low-emission technologies.
To try and wedge Labor, however, the government will use legislation to create the fund.
The $500 million will go to the Clean Energy Finance CorporationThe legislative package includes the expansion of CEFC’s remit to allow it to invest in carbon capture, storage (CCS).
The CEFC is able to invest in a wide range of low-emission technologies. CCS and nuclear are the only exceptions. The Senate has blocked attempts by the government to remove the restriction on the CEFC investing CCS.
By linking the $500 million to the expansion of the CEFC’s investment remit, the government believes it will put pressure on Labor, which opposed the wider brief for the corporation.
While the government’s legislation would remove the prohibition relating to CCS, there would be no change to the nuclear prohibition.
CCS, which is controversial, has not been proven at scale yet, is considered a priority technology by the government under its Technology Investment Roadmap.
The announcement of the proposed fund is the latest in a series of announcements this week. Morrison campaigned on his technology-based energy strategy for net-zero by 2020.
But Tuesday’s unveiling of his policy to encourage the take-up of electric vehicles – with $178 million for modest initiatives but no subsidies to assist purchasers – ran into immediate flak, with strong criticisms from experts and the opposition, who said it was totally inadequate.
Matt Kean, NSW Environment Minister, made it clear that the Morrison government must do more.
He said that he would like to see it support electric vehicles directly so that they would be less expensive for families as well as businesses. There are many taxes and charges that could be waived.
On Tuesday night, he said that the federal government should also invest in electric vehicle charging infrastructure.
Kean said Australia had some of the worst fuel standards in the world – worse than China or India – and acting on that should be the biggest priority for the federal government.
On Wednesday, NSW will announce support for the fleet sector to purchase electric vehicles.
At a news conference on Tuesday Morrison was confronted by reporters over his 2019 trenchant attacks on Labor’s electric vehicle policy, which he said would “end the weekend”. Despite the quotes Morrison denied that he campaigned against EVs during the election.
“I didn’t. That is a Labor lie. I was against Bill Shorten’s mandate policy, trying to tell people what to do with their lives, what cars they were supposed to drive and where they could drive.”
The proposed “low emissions technology commercialisation fund” would include $500 million from private sector investors.
Morrison stated in a statement that the fund would support early stage companies in Australia to develop new technologies.
Emissions reduction minister Angus Taylor says it would “address a gap in the Australian market, where currently small, complex, technology-focussed start-ups can be considered to be too risky to finance”.
The equity would be used to invest, not grants or loan.
The latest initiative brings the government’s public investment commitments to low emissions technologies by 2030 to more than $21 billion.
The government will introduce legislation to establish the fund – expected to earn a positive return for taxpayers – in this term of parliament.
The government’s list of example of potential areas for the fund’s investments include:
- direct air capture of CO₂ and permanent storage underground
- Materials or techniques that can reduce carbon emissions from the production of steel and aluminium
- Measurement of soil carbon
- Technology to reduce methane emissions in livestock feed
- Solar panels are getting improvements
- Battery cases that are lighter and more compact
- Software developments that improve the operational efficiency and sustainability of low-emission technologies in all economic sectors.