Changes to federal legislation to allow investment in carbon capture and storage (CCS) technology could see coal-fired power plants use cleaner energy.
Energy minister Josh Frydenberg has announced the move, which will allow the Clean Energy Finance Corporation (CEFC) to fund “clean coal” projects.
CCS involves capturing carbon dioxide from a power plant and storing it underground to reduce carbon emissions.
The legislation will be introduced into Parliament on Wednesday but must pass through the Senate.
“I’m confident that the Labor Party, when they look themselves in the mirror, and say ‘are we serious about reducing emissions’, they will come to support our changes to the CEFC legislation to encourage CCS,” Frydenberg said, according to ABC News.
“If you were to build a high-efficiency, low-emission coal-fired power station combined with CCS, that would absolutely be a project that could be funded,” he added.
Access to finance is one of the barriers to investment in CCS, according to a government statement, while a change in legislation is said to “provide a significant signal of support and reduce risk for potential investors”.
“The CEFC’s ability to invest in CCS technologies will complement other low emissions investment by the Federal Government including more than $3 billion worth of wind, solar and storage projects,” the statement read.
In a bid to reduce carbon emissions globally, the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) has earmarked CCS technology as a critical step.
Seventeen large-scale commercial CCS facilities are already in operation globally and stored around 30 million tonnes of carbon dioxide every year.
In Australia, the Gorgon LNG project in Western Australia will soon become one of the world’s largest CCS projects when it begins sequestering up to four million tonnes of carbon dioxide annually.