The Australian Government has been slightly more discrete in its fixation on false climate solutions this budget. But if you read between the lines, these ‘low emissions technologies’ will just keep enabling coal and gas.
Hydrogen can be made via renewable energy, which produces no emissions, or from fossil fuels, with carbon capture and storage (CCS) that claims to capture and sequester emissions.
No surprises here, then, that the Australian Government includes both types in its definition of ‘clean hydrogen’. This is despite clear research saying the use of [fossil fuel] hydrogen appears difficult to justify on climate grounds. Former chair of the UK Hydrogen and Fuel Cell Association said last year that fossil fuel-derived hydrogen is “a lock-in for continued fossil fuel use that guarantees we will fail to meet our decarbonisation goals”.
But in the context of this Government, hydrogen policy doesn’t seem to be particularly related to climate change at all. Hydrogen funding in the budget papers is not specified as renewable or other, therefore it is reasonable to assume that some hydrogen funding will go to the fossil fuel industry and to CCS.
The budget allocates $247.1 million over five years to support private investment in low emissions technologies, including hydrogen and the development of the hydrogen Guarantee of Origin scheme. The hydrogen Guarantee of Origin scheme is already in development but there are serious concerns about the integrity of its outcomes. This includes potentially failing to distinguish between ‘clean’ and renewable-based hydrogen, and allowing offsets to be used to reduce emissions from hydrogen production. This is opposed to actually lowering production emissions directly by making renewable hydrogen instead of fossil fuel hydrogen.
Australia’s hydrogen industry, and by proxy Australia’s fossil fuel industry, will also benefit from reduced tax requirements with the expansion of the ‘patent box’ to low emissions technology innovations. This will reduce tax obligations from 25-30% to 17% for corporate taxpayers who commercialise patented low emissions technologies. Eligibility for the tax concession is the list of 140 technologies in the Government’s 2020 Technology Investment Roadmap Discussion paper – the same Roadmap that FOI documents revealed was full of ‘thought bubble’ analysis and not based on independent, verifiable research. The technology list includes hydrogen (not specifically from renewable energy), liquid natural gas (LNG), flaring, closed-cycle gas turbines and various types of nuclear energy. Nothing to see here, folks.
Hydrogen also makes an appearance in other budget items, including in the Energy Security and Regional Development Plan, allocated $7.1 billion over the next 11 years. Funding from this program will go to hydrogen and CCS in the Pilbara (WA), Darwin (NT) and the Hunter Valley (NSW).
CCS gets a special mention under gas infrastructure, with some of the $50.3 million gas funding going to feasibility studies and CO2 carrying pipelines in and around gas and industrial hubs, including the Beetaloo, Cooper and Surat Basins.
This CCS funding is shamelessly enabling the development of gas, as Minister Taylor kindly spelled out: “Supporting the development of CO2 infrastructure alongside major gas pipelines will enable low emissions natural gas production as well as open up opportunities for low emissions manufacturing and low-cost clean hydrogen production from natural gas.”
Never mind that the only CCS project operating in Australia, which was used to justify a new gas production facility, has cost billions of dollars, failed to sequester target emissions and got clogged up by sand.
Even with the Government’s focus on false solutions under the banner ‘low emissions technologies’, this budget contains far less funding than last year. The previous budget allocated $1.6 billion to Emissions Reduction and New Investments under the Technology Investment Roadmap, and $500 million to the Low Emissions Technology Commercialisation Fund. It appears that even Government interest in pretending to reduce emissions seems to be waning.