LETA News • Driving investment in low emission technology

Carbon Capture and Storage

Driving investment in low emission technology

Q&A with Mark McCallum — Chief Executive Officer of Low Emission Technology Australia

20 Aug 2021

Problem solving. Innovative thinking. Progressive collaboration.

LETA chief Mark McCallum, is proud of the progress the black coal and the low emission technology industry has made over the last decade. And over that time, the imperatives behind the development, deployment and application of these technologies — including carbon capture utilisation and storage (CCUS), the Allam Cycle and enabling next generation fuels like hydrogen — have only become more compelling.

Climate experts, including organisations such as the IPCC and IEA, recognise that international climate commitments can only be met with low emission technologies among the solutions.

Speaking at the Australian Carbon Capture Utilisation & Storage Conference, Mr McCallum said there is a real appetite from industry to partner with government for investment in low emission technology projects. And he made the argument for a ‘significant share’ of the federal government’s anticipated $18 billion investment in low emission technologies to 2030 to go towards CCUS.

“This is the size and the scale and timing of investment that is needed to reduce and remove emissions from carbon-intensive industries today. But it will also serve to unlock new and clean industries of the future, and how we do that is a critical challenge,” he told the conference.

Comparing Australia to the rest of the world’s investment in CCUS, he said there is more that could be done, including:

  • greater incentives for investments such as accelerated depreciation and tax incentives like the US’s 45Q
  • expanding the remit of government funding bodies such as ARENA and the Clean Energy Finance Corporation (CEFC) to allow investment in low emission technologies
  • establishing the critical mass for the hubs and clusters to build out CCUS infrastructure as is currently happening in Europe and the UK.

The following is an edited version of Mark’s presentation to the August Australian Carbon Capture Utilisation & Storage Conference.

Why is the black coal industry investing in CCUS?

We’ve long seen an opportunity to reduce and remove industrial emissions, not just from power generation but also from the use of coal in steel and cement production and the things we use every day. The industry has long seen technology as a key part of the strategy for assisting us all to move to a net-zero economy. It also provides an opportunity for new industries like ammonia and blue hydrogen. And that’s a massive opportunity for us to not only help the power industry, but also the agricultural and transport sectors as well as the steel and cement industries.

How important is CCUS for the Australian economy?

It’s a really big opportunity. We have a wealth of hydrocarbons in Australia, be they natural gas, coal or biomass. With technology like the Allam Cycle [which produces power capturing 99% of carbon emissions] there’s a real opportunity for us to capture the carbon from those hydrocarbons and for us to then utilise the hydrogen, either in the form of pure hydrogen, or as ammonia. The applications for ammonia are immense.

There is a very large market for ammonia right now that either relies on coal or natural gas generated ammonia, without CCS, contributing significantly to global CO₂ emissions. When you couple it with CCS through the Allam Cycle or other technologies, such as pure gasification, there’s a real opportunity for Australia to play a significant role.

We have storage. We have hydrocarbons. We’re blessed. There are countries like Japan, like Singapore, like Korea that have committed to net-zero by 2050, but they don’t have storage. So they can’t utilise the carbon capture technologies that we can utilise here and they will rely on countries with storage to decarbonise their fuel sources.

To what extent has the gas industry been receptive to working with LETA?

We’re working with (resource company) Santos around the Moomba to Brisbane pipeline routes and so cooperating in terms of access arrangements for larger scale, opportunities for carbon transport. There’s a whole suite of opportunities there for large-scale storage and with Glencore’s CTSCo (Carbon Transport and Storage Company) project. It’s onshore so it’s a very affordable storage location. The site is four hours drive west of Brisbane in a location that has a potential to store over a billion tonnes of CO₂.

There’s a real opportunity for not just the coal industry but steel, cement, natural gas, LNG production — any industry that has a CO₂ issue. And also any business that is committed to net-zero by 2050 or whatever date they have chosen. If you were to set up a new industry and new business, and you don’t have access to storage it makes it very difficult to get to net-zero. You basically have to offset your emissions. With access to carbon storage in Queensland, versus Japan or New South Wales who don’t have access to storage and so really it does put Queensland and Victoria in the front seat for new clean industries to emerge.

Do you then see black coal use being completely phased out by some point?

There will still be people mining coal and transporting coal. But instead of necessarily burning that coal either in a steel mill or cement mill or in a power station, they’ll be converting that coal into clean ammonia and clean hydrogen through the gasification processes, much like natural gas. The technology works on both natural gas and on coal. On the east coast of Australia, it would make sense. Coal is affordable, it’s readily available and gas is more expensive than on say the west coast of Australia. So you can see markets emerging where Australia really is going to be able to utilise CCUS to take advantage of its natural resource base both in coal and natural gas.

Where are your projects located?

We’ve done work in Western Australia, looking at storage locations and unique geological formations. We’ve done work in Queensland as mentioned, we work with the CO2CRC and support their work in terms of monitoring and that project is down in Victoria. That gives communities and governments a lot of confidence that industry knows what happens to the CO₂ — where it goes, how it’s stored safely and permanently.

The project that we’re working with in the US (the Allam Cycle) is another really good example of being able to pick up on the brightest minds and the greatest new initiatives. And what a great technology. If you can unlock a technology that utilises coal or natural gas — both those commodities generate over $100 billion in export revenues for Australia — and you can capture that technology so that it can remove emissions for our customers then what a great opportunity for Australia. We also work with the Japanese in terms of projects here and over there, and that technology for Millmerran (Queensland) will be from Huaneng and CERI, which are located in China. So there’s a whole suite of international connections and partnerships.

To what extent has political bipartisanship been necessary for LETA to forge ahead?

Both sides of politics really do see that CCUS is a really important technology. There’s a few different ways in which the Government and the Opposition express how to invest in that technology but both see merit and both support the technology. The federal government’s choosing to fund through ARENA and through the CEFC and the Labor Party, last time it was in government, had a dedicated flagship program. Industry has the confidence that both sides see merit the technology and want to support it.

What would you be saying to organisations looking at your association? What is it that will really get them to think about partnering with you?

We’re really keen to invest with other partners; partners from other industries and other sectors that want to utilise the Carbon Hub up in Queensland. But also industries that have technology that we haven’t thought of yet, that we haven’t seen yet. We’ve only just come across the Allam Cycle in the last three years, and within 12 months, decided this was a really critical piece of technology to invest in. So it doesn’t have to be something that we’re already looking at. Come to us with your ideas is more than welcome, we’ll hear you out and look to invest if we see that it makes strategic sense to do so.

What do you think about the black coal industry funding low emissions technologies and projects as a collective and will this drive more progress in CCUS?

I think the collective investment by the industry of over half a billion dollars, respective companies could invest by themselves, and they are investing by themselves, but I think collectively working together, can benefit. And that benefit goes beyond the coal industry. Rather than keeping on reinventing approaches or not learning the lessons or learning from the mistakes, we’re able to all work together collaboratively. It’s a really important part of what LETA is about.

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