Australia to be stable energy supplier while targeting net-zero emissions: minister

Australia is on track on its energy transition journey as it targets a range of measures such as emissions reduction, repurposing, and recycling of infrastructure in decommissioning activities, as well as carbon capture and storage, while also maintaining its reputation as a trusted energy supplier, Minister of Resources and Minister for Norther Australia Madeleine King said May 16.

"The government has taken decisions in recent months to implement our agenda, including legislating landmark climate reforms that enable Australia to reach our net-zero commitment," King said during the plenary session of the APPEA 2023 conference in Adelaide.

The Federal Budget's recent reforms to the Petroleum Resources Rent Tax, or PRRT, will also "build confidence that the Australian people are getting a fair share of the return from the resources they own," she said.

Australia's manufacturers currently rely on gas for 42% of their final energy use and they accounted for 26% of Australia's total domestic gas consumption in 2020-21.

While taking steps to ensure stable energy supplies in the domestic market, Australia is also mindful of the vital role that the country plays in the global energy markets as it accounts for about 21% of global LNG exports, making it one of the world's largest LNG exporters, King said.

"Japan, South Korea, Singapore, and China have been our most important LNG trading partners for years," she said.

Australia is by far the largest LNG supplier to Japan, accounting for 43% of the country's total LNG imports of 71.998 million mt in 2022, up 15% from a year ago, according to Japan's Ministry of Finance data.

Australia is also cognizant of the fact that Japanese and South Korean demand, and their significant capital investment, has underpinned the development of Australia's LNG industry, King said.

Cleaner Energy

In 2020-21, 8.4 % of all of Australia's emissions came from the extraction and processing of natural gas and oil, even as the country aims to achieve its net-zero emissions target by 2050.

If Australia is to meet its emissions reduction targets for 2030 and net zero for 2050, the industry's emissions must come down, King said, noting that the Safeguard Mechanism provides companies with a stable policy framework over the long term that will allow them to achieve these commitments.

The International Energy Agency and Australia's own Climate Change Authority make clear that CCS and wider CCUS applications are a necessary and vital part of any rapid decarbonization effort.

Meanwhile, the Federal Budget 2023 -- delivered May 9 -- has also committed to examining opportunities to provide regulatory and administrative certainty for CCS projects in the resources industry as well as broader industrial use cases, King said.

"We want a regulatory system for offshore CCS that is robust and responsive, and positions Australia's resources sector to bring new CCS projects online," King said.

In 2022, Australia announced plans for its first two new offshore greenhouse gas storage permits in 14 years but there is scope to dramatically scale up Australia's offshore CCS capability, King said.

"To this end, and in recognition of the need to scale up CCS, the government will shortly commence public consultation on a new round of greenhouse gas storage acreage," she said.

There is also a great potential for supporting decarbonization efforts through decommissioning activities, which should not only focus on dismantling and deconstructing offshore equipment, but also look at ethical management, repurposing and recycling of infrastructure, King said.

For example, the steel from offshore infrastructure can be recycled and used for technologies that will be essential for the transition to net zero, such as wind turbines, she said.

To ensure smooth decommissioning, King said that the government is also developing a roadmap that will explore pathways to establish a decommissioning industry in Australia including examining opportunities to grow a local skilled workforce, create supply chains and ensure ethical ways to decommission activities from the offshore gas industry.

"Essentially, it's about putting us in a position to capture the opportunities from the estimated $60 billion of offshore petroleum decommissioning activities expected to occur in Australia over the next 30 to 50 years," King added.