9 These hubs must, among other things, have the capacity to capture one million metric tonnes of carbon dioxide equivalent greenhouse gas per year through DACCS. In addition to the funding and tax credits delivered under the Inflation Reduction Act, the Infrastructure Investment and Jobs Act created the 'Four Regional Direct Air Capture Hubs' program, which provides up to US$3.5 billion in funding towards the development of four DACCS hubs. Credits are transferable between taxpayers, and tax-exempt entities (such as state and local governments) can receive their credits as cash payments. 7 The credits, which range from US$12 per metric tonne up to a maximum of US$180 per metric tonne, comprise a base credit and a bonus credit (subject to satisfaction of certain conditions), and differ based on the capture technology employed. The Inflation Reduction Act, which introduced US$370 billion in investments in renewable energy, CCS, manufacturing and innovation, also significantly expanded the scope and application of federal tax credits for CCS projects. CCS is a key component of the broader strategy for decarbonising the US economy and achieving net-zero targets, and it is central to the emerging blue hydrogen and blue ammonia industries. The US is at the forefront of CCS project development in a number of ways. 6Īt the same time, the Federal Resources Minister, Madeleine King, recently endorsed CCS at an industry event, stating that CCS is a key mechanism in fighting climate change 'nd I think we need to do more to educate the public about its importance'.ĭespite this uncertainty, the private sector is spearheading the development of Australia's CCS industry, with a number of CCS projects currently being progressed, including the Moomba CCS Project and South East Australia CCS Hub. An initial $250 million in funding under the 'Carbon Capture, Use and Storage Hubs and Technologies Program' announced in 2021, was replaced in the 2022-23 Federal Budget with $141.1 million for the 'Carbon Capture Technologies for Net Zero and Negative Emissions' program, which was removed from the 2023-24 Federal Budget. This retreat in support at a policy level has been accompanied by a reduction in Federal Government funding for CCS-associated programs. Australia does not currently have a national CCS strategy, or any policy specifically aimed at encouraging or facilitating the development of a CCS industry in Australia.Īt the most recent Australian Labor Party ( ALP) National Conference, the ALP endorsed a platform that effectively downplayed the role of CCS in Australia's energy transition, by acknowledging that CCS ' may provide opportunities to reduce carbon pollution' a clear retreat from the ALP's earlier platform which recognised the role that CCS ' will play in abating carbon pollution'. ![]() The Federal Government has provided mixed signals on CCS. 4 In addition, CCS has the potential to be a crucial component of Australia's future energy and resources sector in its dual role as both a standalone industry and a means for the sector more generally to reduce its carbon emissions.īack to top What is the Federal Government's position on CCS? Modelling from independent organisations has consistently demonstrated that CCS is essential to achieve global net-zero targets by 2050. Point source carbon capture and storage: industrial separation of carbon dioxide from a large point source of carbon dioxide before it is released into the atmosphere, including from power stations, natural gas processing facilities, ammonia production facilities, certain hydrogen production facilities and steel mills. ![]()
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