Carbon capture and storage could generate more than $80 billion for the state economy over 20 years, according to new analysis funded by the Chamber of Commerce and Industry WA.
Carbon capture and storage could generate more than $80 billion for the state economy over 20 years, according to new analysis funded by the Chamber of Commerce and Industry WA.
The report, commissioned by the industry lobby group, found there was ample potential in embracing carbon capture but that the state was lagging other economies in facilitating the technology.
Western Australia is home to Australia’s only operational large-scale carbon capture and storage facility at Chevron’s Gorgon project on Barrow Island, a project that has struggled to sustain its nameplate capacity since first injection in 2019.
There are other projects at development and proposal stage in the state, including Reindeer (Santos), Cygnus (Wesfarmers and Mitsui E&P), Cliffhead (Pilot Energy) and Angel (Woodside).
The state has sought to facilitate the development of a broader CCS industry, amending legislation in May to put a framework around projects, and committing $4.3 million to the development of a ‘CCS action plan’ announced last November.
CCIWA chief economist Aaron Morey said while the state had taken steps to support CCS, the industry was lacking political will at the national level.
“There’s been a fifty-seven per cent increase in the number of carbon capture projects under construction globally since 2020, which indicates a clear shift in thinking of both governments and private investors,” he said.
“Australia should be a leader in both long-term carbon storage as well as driving diverse applications of capture across various industries.
“The WA government is supportive of carbon capture but it’s time for decision makers at the federal level to get behind the technology.
“Carbon capture can help to reduce the emissions from critical industries that can’t be reduced through other means, which is a key barrier to Australia achieving net zero.”
Mr Morey highlighted the iron, steel, cement, alumina, aluminium, chemical processing, aviation and agriculture industries, reponsible for a combined 20 per cent of the nation’s emissions, as hard-to-abate industries that could benefit.
There is an awareness of the importance of CCS on the state and federal level, if recent public statements are anything to go by.
On the state level, the recently tabled inquiry into WA’s domestic gas policy suggested the state government examine the costs and benefits associated with CCS, with a view to determining the technology’s place in a future domestic gas security policy.
That recommendation was made off evidence from the state’s major gas users and producers.
And speaking at a carbon capture conference in July, Resources Minister Madeleine King said the government was reviewing its CCS regulatory regime off the back of the Future Gas Strategy, and focused on developing policies in support of the sector.
But the CCIWA report suggested Australia was not doing enough to foster the sector’s growth, pointing to efforts abroad to incentivise investment through stimulus and tax incentives.
In conversation with Business News in June, Inpex Corporation chief executive Takayuki Ueda highlighted the vast subsidies available for carbon capture in Norway, the US and Japan.
Inpex is the operator of the Ichthys LNG project and the Bonaparte CCS joint venture off the Northern Territory coast, where it has explored the potential of building a CCS hub for carbon imports.
Mr Ueda said while the company was committed to developing Bonaparte as a CCS facility to support Ichthys, a lack of incentive could dissuade it from developing the project as a hub for regional emissions storage.
CCIWA called on both state and federal governments to throw more support behind the technology in a bid to strengthen the state’s ability to capitalise on carbon capture.
“If carbon capture was given the same political attention as green hydrogen, then the sector could develop,” it wrote.
It also called for improved approvals frameworks and for government to step up in terms of incentives and partnerships, via common user infrastructure and targeted incentives.
“Building on modelling from the WA government in 2023, we believe carbon capture could deliver $79.5 billion in baseline economic benefits to the WA economy between 2030 and 2050,” Mr Morey said.
“This comes from the money companies would pay to store the carbon as well as the spending on infrastructure, transport and job creation.
“On top of this, we expect there would be significant revenue from future projects, tax revenue, construction and utilisation of the stored carbon dioxide.”
