29/07/2010 - 00:00

Coal firing up as unlikely battlefront

29/07/2010 - 00:00

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COAL has emerged as an unlikely battleground in this year's federal election as the major parties fight for credibility on climate change.

Coal firing up as unlikely battlefront

COAL has emerged as an unlikely battleground in this year's federal election as the major parties fight for credibility on climate change.

In addition to Labor’s controversial plan for a citizens’ assembly on climate change, it will also maintain its multi-billion dollar commitment for research into commercial clean coal and carbon capture and storage technology (CCS).

Conversely, the coalition has flagged $500 million in funding cuts for clean coal and CCS research despite backing similar initiatives while in government. The Howard government allocated $300 million to clean coal research from its $500 million Low Emission Technology Demonstration Fund in 2007 to help protect Australia’s $50 billion a year coal export industry.

The coalition’s promised $500 million funding cut is part of $2 billion in savings it expects to reap from cancelling ‘green’ initiatives launched by the current government.

The major item is $300 million in savings expected over three years by terminating the Global Carbon Capture and Storage Institute set up by former prime minister Kevin Rudd to foster international co-operation to commercialise CCS technology.

It will also cut $200 million from the government’s $2 billion CCS Flagships program set up to provide direct funding assistance to Australian CCS projects.

In December, the government shortlisted four projects for funding – two in Queensland, one in Victoria and the Collie Hub sequestration proposal to capture carbon from generators and industry in the South West, including Perdaman’s planned $3.5 billion Collie urea project.

The successful recipients were scheduled to be announced next month, but caretaker provisions now prevent any decision until after the election.

Though the GCCS institute is currently sole-funded by the Australian government, 30 other governments and 180 companies have signed up as institute members and contribute researchers’ time and expertise.

The institute provides a neutral arena in which commercial rivals can collaborate and share knowledge in order to accelerate progress and deployment of commercial-scale CCS projects around the world.

Member governments have so far pledged $US4 billion to establish 13 demonstration plants in Europe, North America and Australia, while the institute has itself pledged $50 million to such programs each year.

Australian Coal Association executive director Ralph Hillmann slammed the coalition’s proposed cuts, saying ongoing government support was vital to the development of technology that would be “essential to reduce Australian and global emissions while maintaining energy security”.

He said the coal industry was spending $1 billion on low-emission coal technology development through its COAL21 fund.

Perdaman corporate director Andreas Walewski said CCS was an important new technology, which, like most other important technological advances, would require government support while still in the development phase.

Opposition energy spokesman Ian Macfarlane said the coalition still supported clean coal research, but conceded there had been a shift in the coalition’s position based on the results so far and the need for industry to provide more of the funding.

“I think we have a far more realistic view of clean coal than the Labor Party, which isn’t being honest with electricity consumers and the generation industry,” Mr Macfarlane told WA Business News.

“The reality is that clean coal will be enormously expensive.”

Mr Macfarlane said results to date suggested wholesale electricity prices needed to treble to make clean coal viable, 60 per cent higher than the level previously claimed by coal proponents.

He said the coalition also still supported a leaner CCS flagships program, but if elected, project funding would be delayed to allow a reviewed of the program.

Resources Minister Martin Ferguson said the coalition’s plan to scrap the carbon institute would slow efforts to commercialise CCS technology that was vital given Australia’s dependence on coal-fired power, while Labor’s commitments would deliver two to four operating carbon capture projects in Australia in coming years.

Green groups have panned both parties’ environmental platforms for failing to sufficiently encourage investment in renewable energy and for refusing to take immediate action on carbon pricing.

 

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