Address to Bioenergy 2030 Summit

Delivered virtually

ANGUS TAYLOR: Thank you for that introduction. Very much appreciate it and can I acknowledge the wonderful work that EDL has done over time in this area.  As you know, James, I’ve been watching EDL and the work that you’ve done for a long time, and I think you’ve really pioneered an area of energy generation and the use of bioenergy feedstock, which has been enormously important for this country and has played an important role not just in providing energy for all of us but also in bringing down emissions and I think EDL’s role, whilst your role is evolving and the focuses are evolving over time, I think you’ve – I think you’re having trouble with the camera here. Hang on. 

JAMES HARMAN: There you are. We could hear you but just couldn’t see you.

ANGUS TAYLOR: That’s better.  So, thank you for all the work you do. I don’t need to tell anyone on this call that bioenergy is an important tool for our economy, for our goals in bringing down emissions.  Whether it’s in power generation, transport, fuel, blending into our extensive natural gas network, which you mentioned, James, up‑front, there’s a multitude of ways that it can play a role as a sustainable energy source.  I’ll cover a few of these opportunities today and how the Government is working with the industry and wants to work with the industry into the future as well. 

Last year, of course, as you mentioned, James, ARENA developed the Bioenergy Roadmap, and it’s a piece of work I know many of you here were involved with, and I thank you very much for your contributions in it.  Of course, that laid out what are some very significant opportunities for Australia, for our energy sector, and it made the point, amongst other points, that this is a great opportunity for regional Australia.  And I think this is an important part of the story and an important part of the opportunity that we need to tap into in the coming years.  It also showed that there are areas where bioenergy already has some really competitive advantages versus alternatives. 

One of the focuses of our Technology Investment Roadmap and our broader work on the pathway to net zero is focused on the economics of different technologies, where they do best.  Otherwise, someone has to pay and it’s always very easy to sort of come up with a solution, a very expensive solution for customers, for consumers, for Middle Australia.  We’ll always look for the solutions that avoid raising the cost of energy, that avoid large cost to taxpayers.  We want to see the economics of low‑emissions technologies really working and being deployed because they work both for the customer, the investor, and, of course, for the environment and it’s that focus on getting the economics of all three aligned that is a hugely important part of our technology focus, our technology strategy and our broader emissions reduction strategy.  And that’s what “technology, not taxes” is all about. 

We recognise in that strategy we have to have a portfolio of technologies.  Now, there are some who like to pick and choose and say, “Well, I don’t like that particular technology.  It’s ideologically unsound for some particular reason.”  From my point of view, this challenge, and from the Government’s point of view, this challenge is too big to rule technologies out.  We need to be ruling them in.  We need every possible tool in the toolkit here to deliver affordable reliable energy and bring down our emissions at the same time, and ruling technologies out is, quite simply, madness.  So, that’s how we are thinking about this problem. 

Now, the truth is Australia has always been good at adopting technologies that are economic, that are working, that are commercial.  And that’s a big part of the reason why our emissions are down by over 20 per cent since 2005. Solar in particular has played an enormously important role in that.  It’s an extraordinary story of 12 per cent cost reductions per year for 50 years, since the early 1970s; 12 per cent a year on year on year.  The result of that is the world saw one gigawatt of generation put in place by around the year 2000.  But that has multiplied at an extraordinary pace; 100 gigawatts by 2012 and we’re about to get to 1,000.  So, these things are exponential when the economics start to work.  

We think there are areas where bioenergy can see that kind of economic scalable opportunity, and I want to talk about a few of those in particular.  All of these are areas where there can be a real contribution to us getting to our targets meeting and beating our targets.  Our approach has always been to set a target and then we smash it, and that’s exactly what we’ve done with Kyoto and that’s what we will do with Paris.  We’re already on track to get to 35 per cent reduction, well above our target of 26 to 28 per cent, but we need every tool in the toolkit, as I say. 

Now, usually the areas where we see bioenergy playing an important role is those particularly hard-to-abate sectors, and one of those is sustainable aviation fuels or SAF.  And this is an area where we see a real opportunity for biofuels.  They have been identified as one of the few low‑emissions alternatives to traditional general and maritime fuels in the short to medium term.  We know that SAF can be dropped into the existing aircraft fleet and refuelling infrastructure without major costs and costly modifications needed over and above the cost of the fuel itself.  And the aviation industry, of course, understands this is already with more than 95 per cent of Qantas’ emissions coming directly from jet fuel. To act on the challenge, Qantas was the first Australian airline to purchase SAF on an ongoing basis, which was great news.  We are partnering with industry on the development of advanced sustainable aviation and marine biofuels, and we’ve committed a further $33.5 million to ARENA to specifically focus on additional research development and deployment of those biofuels through a co‑funding program.

This is a different approach we’ve been taking with ARENA.  ARENA has enormous capability in this area.  They did, of course, work on the Bioenergy Roadmap, but rather than just relying on the ongoing funding which they manage, and they make decisions on, we have picked some areas where we’re asking them specifically to focus funding with additional budget allocations, and that’s the case here. 

That additional investment will help these advanced biofuels become more cost competitive than traditional aviation and maritime fuels, and that’s the way to get uptake.  If we can bring the costs of that those low‑emissions aviation fuels down, then the uptake will go up.  It’s as simple as that. 

The funding will also enhance Australia’s fuel security.  So, there’s other bioproducts from these policy outcomes that we are very supportive of.  In this era of challenges to supply chains, that’s particularly attractive, so I very much encourage the industry to get involved with ARENA as this program rolls out later in the year. 

The next area we’re focused on, we support, is one that James mentioned up‑front. The use of biogas in our natural gas networks.  I, personally, have seen the scale of this opportunity.  I think it’s very exciting.  Biogas can be processed to produce a biomethane product with the same specifications as natural gas, and that means it can be used in existing gas infrastructure and appliances.  I first started looking at this 15 years ago or more, and you could see the opportunity there and I’ve spoken with James about it on a number of occasions.  This is why our broader gas‑fired recovery and gas investment framework not only supports natural gas but also includes opportunity for renewable gases and clean hydrogen, and that’s been a very deliberate part of our approach to the gas‑fired recovery. 

The 2021 Low Emissions Technologies Statement includes a commitment that Government will work with industry, consumers, State and Territory Governments over the next few months to develop a voluntary zero-emissions gas market in Australia.  We think the potential there is significant.  The demand now for low‑emissions solutions, particularly from industry but increasingly from small business and households, is very real and very significant, and we think that market is one that we can build quickly.  It will drive early demand for clean hydrogen and other zero‑emissions gases and recognise consumers voluntary purchase of zero‑emissions gases.  Fostering that market will also provide revenue to producers of low‑emissions gases such as biomethane, allowing them to scale up quickly to bring down production costs and that’s what we want to see as quickly as we can. 

In addition to this, in August last year, Energy Ministers agreed that biomethane, along with hydrogen blends should be brought within the scope of the natural gas regulatory framework, and that allows for a whole series of opportunities that might otherwise not exist.  A draft legislative package will be presented to ministers for approval by the middle of this year following consultation over the next few months, and those reforms will ensure that the regulatory arrangements and consumer protections continue to work as intended when biomethane is supplied.  It will provide certainty for investors to inject biomethane into the natural gas network, which is exactly what we want to see as quickly as we can. 

To support biogas even further, we’ve introduced a new biomethane method package under the Emissions Reduction Fund, and I’m also personally excited about this opportunity.  The ERF will now credit eligible biomethane products under three existing ERF waste management methods, including animal effluent management; landfill gas generation; and domestic, commercial and industrial wastewater.  And that will provide an additional incentive for reduction in emissions in two scenarios:  the first one when biogas from the breakdown of organic waste is captured or refined into biomethane and combusted; and the second when it’s used as a natural gas substitute.  And we’ll, in parallel with that, progress research to support the recognition of other sources of agricultural waste as feedstocks to support and enhance ERF biomethane or a green gas method in the future.  This is part of a broader push to expand as quickly as we can the credits – 

[Bells ringing.]

ANGUS TAYLOR:  Apologies for that noise in the background.  That’s the bells ringing but I don’t need to go – to support, enhance ERF biogas or biomethane or green gas methods in the future.  But it’s part of this broader focus on making sure in the future we have the broadest source of crediting under the ERF as we possibly can, and we see a real opportunity here. 

We’ve also seen bioenergy being used in several of our Government‑backed microgrid studies.  These are important localised projects that allow us to pioneer technologies.  They’ll never be commercial in their own right, but by setting up localised pilots, we can test technologies and as they prove up, they can be scaled, of course, and so, for example, I’ve been fortunate to visit Innovating Energy’s microgrid project in Nowra on the South Coast of New South Wales, not far from my electorate. The project was awarded $3 million in grant funding to test the feasibility of a range of microgrid technologies, including a biogas anaerobic digester power generator to supply lower-cost power to dairy farmers in Nowra, otherwise known as “poo power”, but a pretty exciting opportunity in the agricultural area.  We know agriculture is the source of many of these opportunities.  But it is a great example of an innovative solution to a uniquely regional issue.  

So, the new funding and reforms I talked about today build on the investments that we’ve already made in the bioenergy sector.  We’ve invested almost half a billion dollars through ARENA and Clean Energy Finance Corporation, and we’ll continue to.  The road map that was done through ARENA will help to guide the next rounds of private and public investment.  It’s important that all levels of Government, industry and research work on these actions to realise the benefits.  We’ve seen the power of alignment with innovation through the pandemic.  If we can get everyone moving in the same direction with an emission‑oriented approach, we can really have an impact and I think that can be true of clean energy technologies just as it can be of medical technologies as well.  Bioenergy is obviously an important part of the portfolio, of the mix, and adopting bioenergy technologies can help reduce Australia’s transmissions particularly in these really tough-to-abate sectors, so we’ll continue to work with you, and we’ve enjoyed the opportunities we’ve had to work with you in recent times.  I’m sure they will continue into the future.  Thank you again for the opportunity to speak to you here today.