Carbon sequestration is essential to Australia’s decarbonisation, says a new report from the Australian Climate Change Authority, which contains 23 policy insights as part of a ‘deep dive’ to help policymakers and emitters understand how sequestration can be scaled-up.

‘The Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) indicate the only technically feasible, cost effective and socially acceptable pathways to net zero by 2050 combine ambitious emissions reductions with CO₂ removals at far greater scale than at present,’ says Brad Archer, CEO of the Climate Change Authority.

The IPCC estimates around 6bn t/y of CO₂ would have to be removed by 2050 globally, and about 14bn t/y by 2100 for a 50% chance of limiting global warming to below 1.5°C.

Archer notes that: ‘While reducing emissions at source is critical, the extent of the climate challenge means there must be effort directed to sequestration.’

The Climate Change Authority paper considers a range of carbon sequestration approaches, including nature-based solutions and CCUS.

Key policy insights in the report include:  

• The Australian government’s forthcoming net zero plan and the Authority’s annual progress reports should include sequestration and identify how it will be delivered and used over time. 
• Suggests that separate targets for emissions reduction and carbon removals should be set to help incentivise future demand and guard against sequestration being used to delay emission reductions.
• Sectoral pathways and targets for decarbonisation would improve understanding of the likely future demand for sequestration.
• Government policies should help ensure there is adequate supply of sequestration to meet demand, including policies that prioritise direct emissions reductions where economically feasible.

Meanwhile, a recent Net Zero Australia report, based on analysis undertaken by the University of Queensland, University of Melbourne and Princeton University, echoes the findings of the IPCC, IEA and the Australian Climate Change Authority. The report notes that renewables and electrification, supported by a major expansion of transmission lines and storage, will be key to net zero, but an ‘all technology’ approach will be needed, that includes a large increase in carbon sequestration and a doubling of gas-fired power capacity to support renewables and energy storage.

The modelling also found that there would be no role for nuclear energy unless costs fell sharply, and if renewable energy growth is constrained.

Emissions crackdown could fast-track Australian CCS projects

In related news, a revision to the Safeguard Mechanism, legislation that requires Australia’s largest emitters to cut Scope 1 (direct) emissions, could trigger a spike in the country’s CCS projects, according to Wood Mackenzie.

Coming into effect on 1 July 2023, the reformed Safeguard Mechanism will require projects to reduce emissions intensity by an average 4.9%/y to 2030, with lower reductions after that.

For new gas projects, producers will be required to abate or offset all reservoir CO₂ from first production. This will create real impetus for Australia’s emerging CCS industry to accelerate R&D and roll-out new projects.

According to Wood Mackenzie, there are 27 proposed or under-development CCS projects in Australia. Chevron’s Gorgon CCS project is currently in operation and Santos’ Moomba CCS project is expected to start operation in 2024.

‘It is now critical for new projects, including Woodside’s Browse, Santos’ Barossa and Eni’s Evans Shoal/Verus, to invest in a CCS solution that can operate from day one. And for new projects without a CCS plan, like Shell’s Crux development, CCS and greater purchase of carbon offsets has now become a crucial consideration,’ comments Anne Forbes, Research Analyst at Wood Mackenzie.

Government and industry will also need to expedite progress on incentives and regulatory structures to enable the roll-out of CCS projects in time to meet the requirements of the Safeguard Mechanism.

For new gas projects, including fields that will supply existing LNG facilities, ‘best practice’ baselines will be adopted in line with the revised Mechanism.

‘To cut annual emissions in the near-term it is likely that operators will tackle the low hanging fruit first, such as switching to non-routine flaring only and cutting down fugitive methane emissions. Longer-term more impactful solutions for cutting emissions will likely include using power sourced from the grid and/or renewable and the ramping-up of CCS,’ concludes Forbes.

Accelerating Australia’s clean energy transition

Furthermore, a new report from the IEA sets out the steps Australia can take to accelerate its clean energy transition ‘securely and affordably’.

The report finds that Australia can make sufficient progress on emissions reductions by 2030 to align with the goal of net zero by 2050. However, ‘stronger efforts are needed to improve energy efficiency and boost clean energy investment’, while ‘a whole-of-government approach is needed to end the country’s high reliance on fossil fuels’.

The IEA review calls for an updated net zero emissions reduction plan for 2050 to guide implementation across all parts of government. A national energy and climate information system is also needed to track progress towards reaching these targets.

The IEA review estimates that a 60% productivity improvement would be needed for a net zero aligned trajectory. The new National Building Code and the Electric Vehicle Strategy are seen as critical steps forward in this regard, it says.

Australia’s renewables deployment has a ‘positive outlook’ thanks to the success of rooftop solar, ambitious targets, and increased funding at federal and state levels. However, the report says power sector decarbonisation efforts need to be ‘stepped up considerably’, as Australia aims to increase the share of low-carbon power generation by 2030 – with 82% to come from renewable energy, up from 27% today.