Out-Law News 1 min. read
09 Oct 2021, 1:42 am
The Australian government has announced plans to award carbon credits to ‘carbon capture and storage’ (CCS) projects, in what it has described as a global first.
The country’s government will award large-scale CCS projects with tradeable carbon credits, known as Australian Carbon Credit Units (ACCUs), according to a statement. Each ACCU will represent one tonne of carbon emissions avoided, and projects will be able to sell ACCUs to the Australian government at bi-annual auctions or on the private voluntary market.
Toby Evans of Pinsent Masons, the law firm behind Out-Law, said: “CCS technology has the potential to assist in decarbonising some of Australia’s most carbon-intensive industries and should be supported in that aim. To that end, during our transition from fossil fuels to more carbon-neutral alternatives such as hydrogen and biofuel, we see the potential benefits of awarding carbon credits to appropriate large-scale projects in the interests promoting the incorporation of CCS in fossil fuel projects which otherwise would have proceeded without such harm minimising technology.”
The Clean Energy Regulator, an Australian statutory authority responsible for administering legislation to reduce carbon emissions in the country, is also entering a public consultation phase to further expand the range of activities eligible for incentives under the Emissions Reduction Fund, including hydrogen and ‘carbon capture use and storage’ (CCUS).
In September, the Australian government committed A$250 million (US$180m) to a new programme aimed at the development of commercial-scale CCUS projects and hubs across Australia.
According to the statement, A$100m of that committed amount will support the design and construction of carbon capture hubs and shared infrastructure and the remainder will support research and commercialisation of carbon capture technologies and identify viable carbon storage sites.