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Australian coal producers back A$45M project to boost role in low-carbon future

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Australian coal producers back A$45M project to boost role in low-carbon future

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Cooperative Research Centre for Greenhouse Gas Technologies' Otway carbon capture and storage project.
Source: CO2CRC

An Australian research organization backed by the country's black coal producers sanctioned a A$45 million project in Victoria to advance carbon capture and storage technologies, but green groups remain skeptical about their ability to secure coal's place in a low-carbon future.

The technology, which seeks to capture and store carbon dioxide generated through industrial activity and prevent its release into the atmosphere, is being pursued amid the global call for emissions reduction and a shift away from coal.

The Cooperative Research Centre for Greenhouse Gas Technologies, or CO2CRC, announced a final investment decision May 27 for its A$45 million Otway stage-three monitoring and verification project in southwestern Victoria. The project aims to reduce the cost and environmental footprint of long-term carbon dioxide storage monitoring.

CO2CRC CEO David Byers said the research aims to show that "deep emissions reductions" could be achieved in vital industrial processes such as liquefied natural gas, steel, cement and chemicals production through using coal and gas-fired generation, not just renewables.

The technology also promises to complement the increased deployment of renewables and the production of low emissions hydrogen for heat and transport.

The project is funded by the Victorian and Australian federal governments, BHP Group and the research and development arm of COAL21, an organization that has been funded to the tune of A$555 million by Australia's coal producers to develop low-emissions coal technologies.

Victoria's government brought Australia's first stand-alone carbon storage legislation into operation in December 2009, based on petroleum legislation, after the Otway project's first stage had demonstrated the safe transport, injection and storage of carbon dioxide into a depleted gas reservoir from 2004.

The project's second stage, started in 2006, demonstrated the safe injection and monitoring of carbon dioxide into a saline formation.

Coal's future role debated

Byers, former CEO of Australia's upstream oil and gas industry lobby group, said the global energy mix is unlikely to shift easily given oil, gas and coal still supplied more than 80% of the world's energy in 2018 just as it did 40 years ago, and the argument pervasive in Australia — that the country can be 100% powered by renewables — is "dead wrong."

The same day COAL21 issued a statement hailing the Otway project's stage-three sanctioning, its parent body, the Minerals Council of Australia, attacked the federal opposition Labor Party's new leader Anthony Albanese's apparent lack of forthright support for Adani Enterprises Ltd.'s proposed Carmichael coal project in Queensland.

"The refusal by the new leadership of the federal Labor Party to support jobs and regional communities in Queensland by backing the Adani Carmichael mine and the expansion of the North Galilee Basin shows the opposition has learnt little from its poor showing in Queensland in the election 10 days ago," the Minerals Council said in a May 28 statement.

SNL Image

COAL21 CEO Mark McCallum.
Source: COAL21

Albanese said May 27, having been confirmed as his party's 21st leader, that "the issue with regard to Adani, and indeed to the whole issue of the Galilee coal basin ... [is] the economics of it, the basic cost-benefit ratios."

Australia's coal industry warned the Queensland Labor government that it faces defeat in the 2020 state election, just as its federal counterpart experienced in the May 18 federal election, unless it stops stalling Carmichael's permit approvals process.

Within two weeks, Queensland's government had canceled a fine to Adani affiliate Abbot Point Operations Pty. Ltd. and set deadlines to fast-track Carmichael.

COAL21 CEO Mark McCallum said that while "by and large most Australians accept coal as a large, important industry that employs a lot of people, they want to know that coal is not just a technology for now, but has a future with low emissions."

Aside from the Victoria project, COAL21 has also identified existing coal-fired plants in Queensland to implement the technology.

Louis Brailsford, a researcher at the Climate Council, which issued a report in 2018 predicting the "end of the line" for coal in Australia, said no commercially viable carbon capture and storage project has been developed in Australia.

"Worldwide, there are only a few coal power stations with the technology currently operating," he said in an interview.

"These power stations capture only a small proportion of their greenhouse gas emissions and often pump them underground in order to extract more oil. When this oil is burnt, this creates even more pollution," Brailsford said.

He said the estimated cost of building a coal power station with carbon capture and storage in Australia is more than six times the equivalent cost of the country's largest wind farm.

"Renewable energy and storage have won the affordability race," Brailsford said.