We are entering the great era of carbon fraud. Instead of rushing to end fossil fuels, there is going to be a gold rush for carbon offsets, dirty hydrogen and carbon capture and storage (CCS), all designed not to stop climate change, but to actually drive up the consumption of coal, oil and gas.

There is a colossal danger not just in Australia but around the world that the ‘net’ in net zero will become a get-out-of-jail-free card for those pushing fossil fuel expansion.

Consider the evidence. Before the UN Climate Conference in Glasgow last year, Scott Morrison and Angus Taylor announced Australia’s official target of net zero emissions by 2050. The Australia Institute pointed out this commitment is a fraud while the government remains committed to its plans to massively increase coal and gas production. There are more than 100 gas and coal projects in the pipeline, that will result in around 1.7 billion tonnes of additional CO2-e each year.

The preferred ‘low emissions’ technologies in the federal government’s net zero plan – such as carbon capture and storage and hydrogen made from gas and coal – are overwhelmingly trojan horses facilitating the extraction and combustion of yet more gas and coal. Government investment in these technologies is actually worse than doing nothing on climate change. These are not just false solutions—CCS has missed every target ever set for it globally—they are part of the great carbon fraud that in the short-term will divert over $2 billion in taxpayers’ money to the gas and coal industry, and in the long-term increase the greenhouse gas emissions driving climate change.

Carbon capture and storage is a proven failure. Even if CCS ‘worked’ (which it does not) it is designed to only capture and store underground a small fraction of CO2 from gas and coal. It never captures the gases that leak out of the ground during extraction or those that are produced from burning the fossil fuels themselves. The only thing CCS has successfully captured at scale in Australia is public money. Collectively, the Australian governments has committed more than four billion dollars in public money to CCS with nothing to show for it. What CCS does do well is provide excuses to keep drilling.

Which brings us to the next iteration of carbon fraud, the misleadingly named ‘clean hydrogen’. While hydrogen does have a place in Australia’s net zero future, it is only truly green when it is produced with renewable energy. However, rather than investing in wide-scale renewable-powered hydrogen, the government is investing over $1 billion in hydrogen made from burning gas and coal and proposing that the resulting emissions be stored with CCS. Hydrogen produced this way is not only massively expensive, it is dirtier than burning gas and coal directly.

Now the Government has set about wrecking Australia’s only dedicated climate scheme, the Emissions Reductions Fund (ERF) – the nation’s carbon credit and offset system.

To start with, last year it announced that CCS projects would be able to earn carbon credits allowing even more public money to go to the fossil fuel industry. The government did not even conceal its ‘carbon credits as a license for fossil fuel expansion’ strategy announcing that this development would ‘scale up’ LNG production in Australia, effectively inviting the gas industry to set up shop and put their snouts in this new trough of public money.

The ERF could work well as Australia’s climate fund. Designed to ‘incentivise’ abatement by industry and landholders, the ERF scheme gives carbon credits to projects carrying out emissions reduction activities such as regenerating land, planting trees and capturing methane from landfill. The government is the biggest buyer of these credits, having committed around $2.6 billion to date but they can also be sold on the voluntary market. However, the lack of integrity, rigour, and transparency has undermined the whole system.

Over the last two years, the government has been working to increase the supply of affordable carbon credits available to big emitters needing to offset their emissions for compliance or corporate reasons. In other words, the government is effectively trying to make it cheaper to pollute.

The ERF changes also lowered the quality of what was already a very shaky scheme. Australia Institute research has shown that at least one in five carbon credits in Australia are ‘hot air’ – having not produced any additional emissions reductions – with the real figure likely to be much higher. The race is on to see how many carbon credits can be extracted from various activities and get them on to the market. Meanwhile there is no corresponding push from the Government to ensure these credits are genuinely reducing emissions and actually offsetting the pollution of those buying them.

There are now huge questions about the integrity and direction of the whole of the Government’s central climate fund (the ERF), the carbon credits it is generating, and the way the gas industry intends to use it to ‘offset’ and continue polluting.  The dangers are massive. Billions in taxpayers’ dollars could be spent on credits that do nothing except provide a fig leaf to cover for fossil fuel expansion.

Worse still, this is now part of worldwide trend that could completely undermine efforts to limit climate change damage that we see occurring before our eyes every day.

Renewable hydrogen and quality carbon credits have a role to play as part of a legitimate net zero plan that simultaneously requires a dramatic and urgent reduction in fossil fuels. A net zero plan that facilitates more gas through direct subsidies, dubious carbon credit offsets or misnamed ‘clean hydrogen’ is a scam.

Public money for gas expansion, yet more for CCS and dirty hydrogen combined with carbon credit markets with no integrity—all designed to allow the fossil fuel industry to expand. Welcome to Australian climate policy in 2022 and the great global era of net-zero carbon fraud.