Keynote address at the Carbon Market Institute's "Carbon Farming Industry Forum"
ANGUS TAYLOR: Great. Thanks, John, and thank you again for having me. It's great to be joining you for this, I think it's the fourth Carbon Farming Institute Forum. I know CMI has been doing an enormous amount of work in this area, which has been absolutely fantastic.
Now a lot's happened since I spoke to you at the CMI event, I think it was in May, John, if I remember correctly, and I just released at that point the discussion paper for the Technology Investment Roadmap, the Government's response to the King Review, which of course will be of great interest to many of your members. And since then, we've also had the biggest ERF auction since 2017, which is absolutely fantastic. I'm sure you've been talking about that. And it is really good news to see people revving up again on the ERF auctions and we want to see more of that obviously and I'll come back to that in a moment.
Last week, we announced $1.9 billion of the technology investment package. There's an enormous amount in all of this, and because we've made so many announcements in the energy and emissions space over the last week, a reasonable amount of it has gone somewhat unnoticed and we'll be talking a lot more about some of those details over the coming weeks and months, and perhaps some of it today as well. But there is a lot in that $1.9 billion package of additional investment. I'll come back to a few of the features that I'd like to highlight in a moment.
Yesterday we released the inaugural Low Emissions Technology Statement, and that obviously is a big step forward, but it's the beginning of process as we see it. It's not the end, it's the beginning, and we put very clear stakes in the ground obviously on some of the priorities. But it's important that people see this as a journey which will evolve, and it's an important evolution that no doubt will happen.
Last week's announcement included $1.6 billion of funding for ARENA. That's $1.4 billion of guaranteed base line funding over the next 10 years.
And then a series of programs that we're going to be asking ARENA to drive, and this is a new approach with ARENA where we have baseline funding and then we use ARENA - because of the capability that it has there and we want it to continue to build - as the mechanism for, or organisation for driving a number of very, very important programs that were in that $1.9 billion package.
Of course, we expect there to be more like that in the future that we'd be asking ARENA to work with us on.
I think there's great synergies there between programs we want to pursue, and areas like microgrids, which traditionally have been done through the department but are really very, very good fit with the ARENA capability, and so you'll see more of that into the future
That package has a particular focus within it on soil carbon and other sorts of biosequestration. And this is an area where - you mentioned as I came on in your introduction - 90 million tonnes, I hear you say we need more and I understand that, the point I would make is that's a very, very significant opportunity in its own right. I think it's a really big deal. The challenge has been low cost measurement, and we want to address that and we've got funding there to start to address that. And, one of the priority technologies we announced yesterday was in the measurement of soil carbon.
Look, these are all really important reforms. I really appreciate CMI's public support for the changes, and we do want to work closely with CMI and other stakeholders over the coming months to make sure we get maximum bang for our buck out of all of these initiatives.
Now, one of the programs in the $1.9 billion deploys just over $95 million from the $2 billion Climate Solutions Fund through ARENA, from the King Review, the recommended Technology Co-Investment Fund - supporting businesses in agriculture, mining, industrial and transport sectors to adopt technologies that increase productivity and reduce emissions.
Now these are very specific initiatives focused on carbon outcomes.
If you look at the R&D investment we're doing, for instance - much of which will be deployed through ARENA, as well as the CEFC, CSIRO, the universities as well, as well as state governments and the private sector - there's a great focus there on R&D and getting the cost of these emerging technologies down to the point where the private sector will deploy them as a matter of choice because the economics work, and we get emissions reduction in the process, which is the least cost way of course of getting very significant emission reductions.
But the deployment side, the King Review's recommended Technology Co-Investment Fund is really important.
Now, we're targeting an additional 16 million tonnes in the initiatives that we've outlined in the last week or so which is a very low cost abatement, and you know, we continue to find these ways of getting this low cost abatement, and we're going to continue to pursue them because they are there as the technologies come towards economic parity with the alternatives.
The Emissions Reduction Fund remains a very important part of our policies, and the $1.9 billion includes $40 million for the Clean Energy Regulator. And this is an important smaller initiative. Again, it's not ever going to grab the headlines, but it's extremely important because we want to take- we want the Cleaner Energy Regulator to take responsibility for development and review of ERF methods. ERAC will continue to approve those methods, and it's very important we have that independent ERAC screen over the methods as they come through. But we think there's great capability in the Regulator to support the faster development of a method and bringing those methods to fruition as quickly as possible. We want to halve the time of development from the current 24 plus months, which I know has frustrated people that I'm sure are in this audience, down to less than 12 months.
Look, a couple of other finishing comments on the ERF auction result and the Low Emissions Technology Statement.
On the ERF auction result, we are really pleased with the auction results. We purchased more than 7 million tonnes of abatement, in the 11th auction at an average price of $15.74, which is a terrific outcome.
We really appreciate the fact that people are continuing to push hard on these auctions. As we broaden our set of methodology, we want to see bigger numbers coming through the auctions, not smaller ones. And that will continue to be a very, very strong focus for us and one where as long as we can keep getting outcomes there, we're going to keep putting in the investment obviously to make sure we're getting those abatement outcomes.
Couple of finishing comments on the Low Emissions Technology Statement. I mean, as I said, this is an evolutionary process. It's not the end of the journey. In many ways, it's the beginning, or it's a continuation of the journey that we've been on but we're now formalising it, and getting very strategic about our R&D investment allocation.
Now, one of things we're seeing in the world more generally when it comes to industry policy and technology policy is that it's harder and harder to make breakthroughs. There's very good research telling us this. And that if you want to move the dial on a technology, get it to a point where it works for consumers, for businesses to adopt that technology, you've got to throw the book at it and you've got to give it a real chance of success.
Now, the good news in emissions reduction technologies, in clean tech more generally, Australia is extremely well positioned in a number of technology areas - not every one - but in many. And most of your audience I'm sure will be well aware of the story where we played a very important role in the development of solar. We never really capitalised on that as much as we could have. And you talk to people like Martin Green, you know, they're acutely- well, played an important role globally.
But we want to really grab that experience where we had great successes, but perhaps didn't capitalise on it as much as some might have wanted to. We think we can capitalise on that, and drive not just Australia's emissions reductions, but, the critical part of this is support emissions reductions across the world.
Now, if you take those five priority technologies, they cover sectors which constitute 90 per cent of the world's emissions - 45 billion tonnes of emissions. And if we can make big breakthroughs as we aspire to on low emissions steel, low emissions aluminium, soil carbon, storage, hydrogen which we all know for industry manufacturing offers enormous potential, low emissions hydrogen, zero emissions hydrogen - these are breakthroughs that won't just bring down emissions in Australia. We've estimated by 2040 they have the potential to deliver about the equivalent of about 250 million tonnes of abatement, but have the potential to dramatically move the dial in the world and particularly in developing countries.
If you look at steel and aluminium, for instance, agriculture as well, obviously very important sectors to many developing countries. Countries that have struggled with abatement, struggled with emissions reduction. And so, we do see enormous potential in this package not just for Australia but for the world. We'll need to collaborate closely. We're collaborating already now in hydrogen with South Korea, with Japan, with Germany. We're going down that pathway, we're making significant investments in this area.
We're a smaller country than many of those, but I tell you what, we are so well positioned because of where we come from, because of our R&D capacity, because of our traditional industries in agriculture and manufacturing.
This is an advantage for the world in its decarbonisation journey because Australia is a developed country with a very developed R&D system and network, but with traditional industries that are mostly seen in the developing world, much less so these days in places like Europe. And so, we do want to make the most of that.
We take seriously the Paris Agreement net zero target which is a global commitment. This is an important point. It's a crucial point. And we see technology as the key to achieving that.
Minister Taylor's office: 02 6277 7120