Carbon

Coalition pledges to ditch 2030 emissions target, what could it mean for ag?

Eric Barker, 10/06/2024

THE Federal opposition has set the tone for its next election campaign, pledging to reverse the current Government’s 2030 emissions target.

Labor’s goal to reduce emissions by 43pc between the years of 2005 and 2030 has had a profound impact on agriculture since it was elected in 2022 – prompting a wave of investment into renewable energy and ramping up reliance on the carbon market.

The goal has received mixed responses from the agriculture sector, with some seeing it as an opportunity for the industry, others seeing it as an unnecessary burden and all opinions in-between.

Now the opposition is making a direct challenge to Labor’s approach, with Peter Dutton pledging to ditch the 2030 target and rely on nuclear energy to reach net zero by 2050. Most of the heavy lifting is expected to be done between 2040 and 2050 as the transition into nuclear would likely take that long to come online.

If the opposition is elected, what will the changes mean for agriculture?

Renewable energy

The primary objective for ditching the 2030 target appears to be about taking the pressure off the rollout of renewable energy.

Large-scale wind and solar projects have been central to Labor’s target, who are hoping 82pc of the nation’s electricity grid will come from renewable energy by 2030.

The Government has put a series of financial incentives in place to scale up development and has been designating areas for renewable energy development and building transmission lines to plug them into the national grid.

The renewables industry believes it can meet the target, citing the country’s efforts to scale up other electricity sources like gas in a short space of time.

The Coalition says the goal is unachievable and it could only be achieved at the detriment of agriculture or manufacturing. It was inferring that it would compete with agricultural land use and making power too expensive for manufacturing.

Renewable energy has been a part of the Australian energy grid for some time and speaking to Sky News this morning, Nationals leader David Littleproud said it will continue be.

“There is a place for renewables and I believe the best place for renewables that in an environment it can’t destroy, which is on rooftops where the concentration of power and the concentration of population is. So, there will be a renewables mix is part of our grid,” he said.

It is unclear whether the Coalition is planning to wind back the financial incentives for renewable energy companies.

Carbon projects likely to stay

If the Coalition is elected, it is unlikely to see the end of demand for carbon projects.

The Coalition was the first to implement the main policy underpinning carbon projects, called the safeguard mechanism.

It sets an emissions limit for big emitters, like electricity and mining companies, and forces them to purchase offsets if they exceed the limit.

Since coming into power, Labor has ramped up the safeguard mechanism making those limits decline year-on-year until 2030 – in line with the 43pc reduction.

Labor’s policy has been tipped to force up the price of carbon credits before the end of the decade.

Beef Central asked where the Coalition plans to take the safeguard mechanism if elected, which is still unclear.

Carbon capture still part of Coalition plan

One of the more controversial ends of the carbon market has carbon capture and storage – which involves taking waste CO2 from power stations and pumping it into the ground.

It has been particularly topical in Australian agriculture after mining giant Glencore planned to trial pumping it into the Great Artesian Basin. The proposal was eventually denied by the State Government after lobbying from agriculture, environmentalists and regional communities concerned about its impact on an important water source.

While the opposition has been calling on the Federal Government rule out any more projects like Glencore’s in the GAB, it is still backing carbon capture as a concept if it is in the appropriate areas.

In the same interview with Sky News, Mr Littleproud said gas with CCS will be part of the plan – citing a recent US$1.2bn investment from the US Government.

What about the nuclear plan?

The Coalition’s plan is to transform Australia’s existing coal fired power stations into nuclear power stations, which it says will create baseload power for Australia’s energy grid with no emissions.

While Nuclear power is used in many other countries across the world, it is currently banned in Australia. Ironically, it is banned because the 1998 Howard Government made a deal with the crossbench to enact the ban, in a bid to build a research reactor near Sydney – which is still operational.

Overturning the ban will be the first challenge for the Coalition if it is elected.

The current Government has not shown any support for overturning the ban or making nuclear apart of the national energy mix. It has been relying on a report from the CSIRO, which stated that nuclear would cost twice as much as renewables to build and would take 15 years to construct.

Nuclear will also be a tough sell to crossbenchers, like the Greens and Teal MPs, who were very successful in inner-city seats at the last the election.

“No nuclear power and nuclear weapons” is a headline policy of the Greens and the Teals have also been pushing for renewables over nuclear.

The Coalition says while it is expensive and will take a long time to pay back, it is a long-term solution that will provide baseload power for industries like manufacturing.

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Comments

  1. Peter Dunn, 10/06/2024

    I don’t know that saying “It is pointless to sign up for something that cannot be achieved” amounts to a pledge to ditch Labor’s 2030 emission targets, but if Peter Dutton did relatedly make that pledge, there will be no one happier than I. For me it would be advocacy realised. Putting aside the ideological idiocy of the ‘renewables only’ transition, Peter Dutton’s logic is a reflection of the collapse of the early wave investment into renewables, brought about by the bogging down of project approval processes, hardware importation from China, and transmission line construction, just to name some, making (despite government tax breaks, subsidies and incentives) return on investment highly questionable.
    The Labor government, and particularly Minister Bowen, would crawl through broken glass before admitting it will not reach its 2030 target, so the Labor government is now, alternately, ramping up emissions reductions conditions on various industries, with rural industries being at the top of the target list. Convoluting this of course is the little matter of ACCU’s, which are softening the blow for many in the rural industries, despite the fragility of the contracts as emphasis is shifted from one storage concept to another, and the science is hotly disputed.
    The energy/environmental debate has many facets, and the inevitable and sensible conversion to nuclear generation will become central to this debate over time. However, the immediate and critical issue is the dire predicament the Labor government has led us in to, with imminent power shortages, uncontrollable price increases creating family hardship and business damage, and the Labor government in denial about the shambles that the renewables rollout has become.
    How long can this pain and incompetence continue? Well, the answer is for about another year, because that is how long the Labor government can constitutionally remain in power, and not a minute longer, unless a majority of Australians vote at the next election for the pain and incompetence to NOT continue.
    Something to think about perhaps, when your next power bill arrives at your house, or the transmission line contractor comes through your farm gate.

    • Paul Franks, 11/06/2024

      “Convoluting this of course is the little matter of ACCU’s”

      Can someone answer me this question?

      If a person has say 2000t of ACCU sequestered carbon in their soil. They sell that to a company for 25 years, that company then goes on to emit 2000t of CO2 equivalent emissions. The company then goes bankrupt and ceases to exist, the 25 years are up, is the landowner free to sell that 2000t again, even though it has for all intents and purposes been “used up”, meanwhile the bankrupt companies 2000t of emissions are forgotten about?

      Hi Paul, there would need to be a financial transaction in place for the company to buy the ACCUs. So if you have sequestered 2000 ACCUs in your soil and been paid for them, you no longer own them – much the same as selling a cow. As for the obligation the keep the carbon in your soil for 25 years, that is an agreement with the Federal Government, who essentially guarantees the ACCUs to the buyer and holds up the regulatory side of the deal. Hope that helps, Editor

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