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Carbon capture and storage eligible for emissions reductions credits

However, the UN climate science agency, the Intergovernmental Panel on Climate Change and the International Energy Agency say carbon capture is needed now to start reducing the pollution from difficult-to-abate industrial processes like cement production.

Mr Taylor said carbon capture would also “support the production of clean hydrogen from existing energy resources like coal and gas”.

Hydrogen produced with energy from coal or gas is known as blue hydrogen and is controversial because climate action advocates argue it’s a lifeline to extend fossil fuel extraction. They argue green hydrogen, produced with renewable energy, is the only acceptable option.

The federal government announced $250 million in funding for carbon capture on Thursday, including $100 million to help build shared carbon capture hubs and $150 million for research and commercialisation of the technology.

Mr Taylor also announced the government will next year approve five new emissions reduction techniques eligible for ERF credits, after consultation. On the list are transport, hydrogen for energy generation, various agriculture practices, recycling of captured carbon for industrial uses and updated rules for savanna fire management.


Under the electric vehicle technique, companies that invest in electric vehicle charging or refuelling stations for hydrogen cars would earn credits for the emissions savings generated by replacing petrol with cleaner fuel sources.

Successive governments have together committed $4.5 billion to the ERF since the fund was established in 2013 and carbon pollution saved under the scheme is not counted towards Australia’s national emissions budget.

Earlier this month Australia’s clean energy investment arm announced it would fund carbon capture and storage projects. The move followed the federal government’s change to the remit of the Australian Renewable Energy Agency in August.

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