Keynote Address at the Carbon Market Institute 7th Australasian Emissions Reduction Summit
4 December 2020
Thank you very much for having me again this year. I’m really delighted to join you on the third day of what is the 7th Emission Reduction Summit.
Congratulations on these summits, and congratulations more generally on the work you're doing, because it is important and I’ll talk more about that, but very much appreciate the work you've been doing and the engagement we've had at my office and I have had with you in the time I've been in this role.
As our economy rebounds from the global pandemic, it’s never been more important to ensure that action to reduce emissions goes hand in hand with a strong and resilient economy.
Today I’m pleased to report that – despite the challenges and disruptions of the past 9 months – we’ve continued to make significant strides towards that vision.
Australia has much to be proud of in this space.
Many of you will have heard me say this before, but it bears repeating: when technologies get to commercial parity, our experience has been that households and businesses rapidly adopt them.
We’re seeing that first hand with renewables:
◾$30 billion invested since 2017.
◾On a per person basis, we’re deploying renewables 25 per cent faster than Europe’s four largest economies combined – that’s Germany, the UK, France and Italy.
◾And between 2005 and 2018, our emissions fell by more than 13 per cent. Faster than many other comparable export-oriented economies, including Canada, New Zealand, Japan or the United States.
We’ve beaten our 2020 target, thanks in large part to significant structural declines in emissions from electricity, agriculture and the land sector.
Certainly the Emissions Reduction Fund has played an important role in the land sector.
The 11th auction, held in September, increased the Government’s contract portfolio to around 200 million tonnes of abatement, with more than 60 million tonnes already delivered.
More than $2 billion has been committed to projects in regional and rural areas, such as Bulgoo Farm in Western NSW.
Peter and Beverley Yench have embraced the Emissions Reduction Fund.
As farmers, they have seen the benefits and they recognise the importance of getting back to the environment, but at the same time being good farmers through the native forest protection project on their property, they've been able to preserve native forests on their 130,000 acres which is a fantastic outcome.
But what's particularly good about that project, from my point of view, is it's a combination of farming and protection of those native forests.
It is the two together in these projects that work so well, it's why it's such a powerful case study that we saw a moment ago - so well done all of those who have been involved in that project, and well done, of course, to Peter and Beverley.
This is one of many success stories – and with more funding available through the $2 billion Climate Solutions Fund – we know there will be many more.
Voluntary demand from the private sector is also increasing, and that is welcome news.
As I’ve said to you previously, we want to remove barriers to increased supply and incentivise more voluntary action.
Both sides of the equation are important.
Through the Budget, the Government is investing $40.4 million in the Clean Energy Regulator to address some of the issues and opportunities identified in the King Review.
One of the challenges to supply has been the speed at which methods are developed and reviewed.
Between 2017 and 2020, just three new methods were developed.
We’ve now made the Regulator the single point of contact for new method development.
And David and his team have one core KPI - halve the time it takes to develop new methods from the current 2 years or more, to less than 12 months.
Under this new approach, the Regulator will work closely with industry to co-design methods.
I’m a great believer in the saying ‘what gets measured, gets done’.
And so I’ve asked the Regulator to publicly report on methods’ progress through the stages of development.
I know these changes are welcomed by everyone involved in the ERF.
Many of you have made put forward opportunities for prioritisation.
And in 2021, we are prioritising 5 key areas. These are:
◾Carbon Capture Use and Storage,
◾biomethane or Green Gas,
◾Plantation Forestry and
I can assure you that even if your preferred method is not prioritised this time round, you will be better off under this new approach.
Because there is a good chance your method will be picked up next year and once prioritised, developed within 12 months.
The new funding for the Regulator will also support a significant revamp of the IT infrastructure that supports the ERF.
We are aiming to halve the time it takes to register new projects and credit projects with ACCUs – which means faster returns for project proponents.
The Regulator will also develop a new exchange platform for ACCUs.
Right now, ACCUs are mostly sold in a fairly shallow “over the counter” market.
Private demand for ACCUs is suppressed by a lack of real-time information on units and their transaction costs.
Exchange trading will make it easier for buyers and sellers to find one another, to identify the origin of units as well as making it easier to identify co-benefits and market these.
A more efficient market will benefit all parties, and the Regulator expects that these reforms will save industry $100 million over the decade to 2030.
We are also looking at other opportunities to support transparency around sources of demand.
And there are a number of options to increase corporate accountability that we will implement in the new year.
I have asked my Department to look at ways to increase participation in ClimateActive, which presently covers a small but growing proportion of Australia’s voluntary action.
I note the CMI is itself one of that initiative’s newest members.
But offsetting emissions to be certified as ‘carbon neutral’ is only one form of climate action.
Real action and progress towards voluntary commitments is also ‘climate active’.
Many of the businesses represented here today are making voluntary commitments to reduce their emissions.
That’s welcome news, but I would note that making the commitment is the easy part – the ‘doing’ is another.
Transparency is an essential prerequisite to accountability for those targets.
The Australian Government already has one of the most comprehensive, transparent and timely emissions reporting systems in the world.
Early next year, I will write to the chief executive of every ASX200 and National Greenhouse and Energy Reporting company that has announced an emissions reduction target.
To advise them of the frameworks and incentives the Government has in place to support their aspirations:
◾ARENA and the CEFC are ready to support investments in technologies to reduce emissions.
◾ClimateActive is one way of demonstrating accountability for progress, particularly for companies not covered by NGERS.
◾Participants in ClimateActive will be encouraged to ‘buy Australian’ - to purchase ACCUs because of their high integrity and local co-benefits.
◾My Department will begin publishing the share of domestic units chosen by businesses to meet their ClimateActive certifications.
◾The Clean Energy Regulator will also begin to publish the progress that NGERS-covered businesses are making towards their commitments. This tracker will be made available for reporting on the 2021 financial year.
Finally, a few words on soil carbon – one of the opportunities I’m most excited about.
Emissions from cropping and grazing have fallen by 69 per cent over the last three decades, from around 300 million tonnes per year in 1990 to around 92 million tonnes today.
Increasing soil carbon holds the promise of significant further decarbonisation in our agriculture sector.
And it has the potential to increase yields and resilience.
But we have to get the cost of measurement down.
Tapping into the valuable information about soils that farmers and agronomists already collect will be critical to achieving the goal of $3/ha in the Technology Investment Roadmap.
I and my Department are working with industry and scientists to identify the data that we already have – and there is much – and what more we need.
We’ve committed $7.9 million in the Budget to unlock soil carbon data.
In the first quarter of next year, my Department will seek proposals from industry and research organisations to collate and analyse existing and new data linking soil carbon with land management.
This will support the development of new, cheaper, soil carbon measurement technologies.
At the same time the Clean Energy Regulator will develop a new soil carbon method that reduces the overall costs of measuring soil carbon by making more use of modelled approaches.
We’ve also committed a further $6 million to support the development of emerging technologies to reduce livestock emissions, and gather data about their benefits. My Department will seek detailed proposals from industry and research bodies in April 2021.
There is a lot of work ahead of us, but I’m optimistic about the future.
The Government is absolutely committed to emissions reduction and playing our part in meeting the goals of the Paris Agreement.
To achieve those goals, we need to get new technologies to parity with higher emitting alternatives.
That’s the guiding principle behind the Technology Investment Roadmap, and it will be a central component of the Long Term Strategy we are developing.
A plan that will be delivered through hard work, diligence and collaboration across all sectors of our community.
And that’s the only way to bring the world with us on this journey.
I look forward to continuing our work together with you all.