From carrot to stick – the impact of a changing landscape of CCS policy and funding in Australia since 1999

Since 1999 successive Australian Commonwealth governments have provided direct funding for carbon capture, utilisation and storage (CCUS) projects, notably the carbon capture and storage (CCS) Flagships Fund (Rudd government, 2009). The most recent CCUS Hubs and Technologies Fund (Morrison government, 2022) was later revoked (Albanese government, 2022) marking a shift from direct funding (‘carrot’) to emission reduction through a strengthening of the Safeguard Mechanism, the introduction of a 43% emissions reduction target by 2030, and the establishment of the Net Zero Authority (‘stick’). Reports such as the ‘Net Zero Mobilisation Report’, have delineated the need for, and size of, the role of CCUS in Australia, especially for hard-to-abate sectors and the report states ‘private investment in a CCUS industry requires targeted government support’ i.e. funding. As government focus moves from direct funding support for CCS to CCU and direct air capture (DAC), the development of underground geological storage of carbon dioxide will be largely left to fossil fuel emitters, especially large liquefied natural gas (LNG) companies, reflected in current Western Australian government policy (Cook government, 2023) to develop CCS strategy as part of the LNG Jobs Taskforce. The only current exception is CarbonNet, operated by the Victorian government and one of the early CCS Flagship funded projects.