Chapter 1Introduction
1.1On 25 March 2024, the Senate referred an inquiry into Glencore’s proposed carbon capture and storage project (the inquiry) to the Senate Environment and Communications References Committee (the committee) to inquire into:
The implications of Glencore’s proposed carbon capture and storage (CCS) project by its subsidiary, Carbon Transport and Storage Corporation (CTSCo), in the Great Artesian Basin, with particular reference to:
(a)the environmental impact assessment process and the adequacy of the project’s approval by federal and state regulatory bodies, including the decision not to classify the project as a controlled action under national environment law;
(b) the potential risks and impacts of the project on the groundwater quality within the Great Artesian Basin, especially concerning the findings related to the acidification of groundwater and mobilisation of heavy metals such as lead and arsenic;
(c)the scientific basis and transparency of the data supporting the project’s safety claims, including the robustness of fieldwork, data, and analysis presented by CTSCo and critiques by independent hydrogeologists and aqueous geochemists;
(d)the potential socioeconomic impacts on agriculture and regional communities, relying on the Great Artesian Basin for water, including an assessment of the project’s impact on existing and future water use rights;
(e)the consultation processes undertaken with stakeholders, including farmers, Indigenous landholders, environmental groups, and the broader public, and the adequacy of these processes in addressing stakeholder concerns;
(f)the potential precedent set by allowing CCS projects within the Great Artesian Basin and its implications for future projects, considering Australia’s strategic interests in preserving its largest groundwater system;
(g)the role of CCS technology in Australia’s broader climate change mitigation strategy, including an evaluation of its efficacy, risks and alternatives; and
(h)any other related matters.
1.2Originally the Senate set the reporting as 1 May 2024. On 14 May 2024, the Senate granted an extension of time to report until 2 July 2024. That date was subsequently extended to 11 July 2024.
Background and context of this inquiry
1.3This inquiry was established to consider the proposed Surat Basin Carbon Capture and Storage Project (the project) by the Carbon Transport and Storage Corporation (CTSCo), which is a wholly owned subsidiary of Glencore.
1.4Glencore is a Swiss multinational natural resources company with a significant presence in Australia through its coal, cobalt, copper, lead nickel, zinc, and agricultural businesses, as well as 25 active mining operations. Its subsidiary CTSCo was established in 2010 with the aim of ‘conducting carbon capture and storage (CCS), initially on a demonstration scale, and if successful, on an industrial scale.’
1.5Using CCS technologies, the project proposed to conduct a greenhouse gas (GHG) test injection demonstration (containing at least 98 per cent carbon dioxide) in the Surat Basin region of southern Queensland. The project also involved the construction of a transportation facility, flowline, and associated infrastructure. An overview of CCS and its role as a climate change mitigation strategy is presented later in this chapter.
Overview of the proposed project
1.6The project’s stated purpose was to ‘evaluate the feasibility of GHG stream storage by GHG storage injection testing of the captured CO2’, with the proponent arguing that outcomes from the project would ‘assist in determining the long-term feasibility to safely capture and store GHG streams from multiple industrial sources’.
1.7The GHG stream for the project was to be sourced from Glencore’s existing coal-fired Millmerran Power Station, located approximately 100 km southwest of Toowoomba in southern Queensland, and transported 260 km by truck to the proposed injection site.
1.8The project was set to last a total of seven years, with delivery carried out across five key phases:
Exploration and Appraisal
Construction
Operation
Monitoring
RRehabilitation
1.9The proposed injection site was the Precipice Sandstone aquifer, located in the Surat Basin — a sub-basin within the Great Artesian Basin (GAB). The aquifer covers approximately 212,500 km2 of the GAB. CTSCo’s Environmental Impact Statement (EIS) argued that the Precipice Sandstone aquifer was self-contained and hydrogeologically isolated.
1.10Consequently, the proponent argued that the injected CO2 would remain stored within between 500 and 600 metres of the injection site at any point, with no risk of leakage and migration to the rest of the aquifer and the wider GAB.
1.11The project would be located within the Western Downs Regional Council local government area in Queensland, approximately 400 km west of Brisbane. The closest population centres would be the town of Moonie and the Westmar township.
1.12As an injection test site, Glencore stated that the project’s emissions reduction potential would be ‘incidental’:
Although the Project expects to abate CO2 emissions, the reduction in CO2 emissions from the injection testing alone would be incidental. The injection testing aims to provide sufficient information to evaluate the feasibility of future CO2 storage within the Surat Basin and, more broadly, provide a reference case for future onshore Australia CCS.
Timeline of key events
1.13Evaluation and appraisal activities for the project commenced in 2021. Since then, the project has undergone regulatory assessment processes at both the Commonwealth and the state level.
1.14On 12 August 2021, CTSCo applied for a decision on whether an EIS would be required for the project under the Environmental Protection Act 1994 (EP Act) (Qld) and the Environmental Protection Regulation 2019 (EP Regulation) (Qld). On 10 September 2021, the Queensland Department of Environment, Science and Innovation (DESI) announced that the project would need to undergo an EIS process.
1.15On 7 January 2022, CTSCo referred its proposal to the Australian Government under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) (Cth) to determine whether the project would be considered a controlled action.
1.16On 9 February 2022, the Australian Government gave notice of its decision that the proposed project was not a controlled action under the EPBC Act and therefore would not require environmental assessment at the Commonwealth level.
1.17On 15 March 2024, Queensland-based peak agricultural body AgForce launched a legal challenge in Federal Court to revoke the decision by the Federal Environment Minister that determined the project not to be a controlled action under national environment law.
1.18On 24 May 2024, following a three-year assessment process against the regulatory requirements of Queensland’s EP Act and the EP Regulation, DESI announced that it had determined the project is not suitable to proceed ‘due to potential impacts on groundwater resources in the Great Artesian Basin.’
1.19Following this decision, the Queensland Government announced on 31 May 2024 plans to legislate a ‘blanket ban’ on all CCS projects within the Queensland component of the GAB. The state’s Minister for the Environment, the Hon Leanne Linard, explained that the proposed legislation will ‘ensure that there are no future attempts at this type of storage in this essential water resource.’ Further details of this proposal is outlined in Chapter 2.
Approval processes and outcomes
1.20At the Commonwealth level, controlled actions under the EPBC Act are defined as actions which are likely to have a significant impact on matters of national environmental significance (MNES). The Department of Climate Change, Energy, the Environment and Water (DCCEEW) notes that:
…generally, a significant impact is an action that has an important, notable consequence. Whether or not an action is likely to have a significant impact depends upon the sensitivity, value and quality of the environment that is impacted, and upon the intensity, duration, magnitude and geographic extent of the impacts.
1.21The EPBC Act protects a number of MNES, such as nationally threatened flora and fauna species and ecological communities, and world heritage properties.
1.22In the Statement of Reasons for a Decision on not Controlled Action Under the Environment Protection and Biodiversity Conservation Act 1999 (the statement of reasons), the delegate for the former Minister for the Environment and Water outlined the basis for his decision to classify Glencore’s project as not a controlled action.
1.23The Minister’s delegate noted that, in making his decision, he considered ‘all adverse impacts the proposed action will have, or is likely to have, on each matter protected by a provision of Part 3 of the EPBC Act’ [requirements for obtaining environmental approvals], as well as all referral documentation and Commonwealth and State Ministerial comments.
1.24The statement of reasons listed four threatened species and ecological communities that may be potentially impacted based on the location of the proposed project, which include the Koala, the Squatter Pigeon, the Brigalow ecological community, and the Poplar Box Grassy Woodland on Alluvial Plains ecological community. After considering the nature of the proposed action, the referral documents and the department’s Matters of National Environmental Significance Significant Impact Guidelines, the Minister’s delegate concluded that the proposed project was unlikely to have a significant impact on these species and ecological communities.
1.25 Lastly, in the statement of reasons, the Minister’s delegate stated that he considered the precautionary principle in making his decisions, as required under the EPBC Act.
1.26Once the EPBC Act was determined not to apply, the responsibility for assessing and approving the project rested solely with the Queensland Government.
1.27Under Queensland regulation, CTSCo was authorised to conduct specific GHG storage exploration activities at its EPQ10 tenement—where the injection site would be located—since December 2019. However, this authority ‘does not authorise the carrying out of CO2 injection tests’.
1.28As a result, the proponent sought to amend the conditions of its existing environmental authority (EA) to the proposed site, which involved the submission of an EIS for the project.
1.29Following the submission of the EIS by CTSCo, DESI was required to prepare an EIS assessment report which specifically addressed the following points relating to the project:
the adequacy of the EIS in addressing the final Terms of Reference.
the adequacy of any environmental management plan.
1.30The assessment report was also required to make recommendations about the suitability of the project and any conditions on which any approval required for the project may be given.
‘Not suitable to proceed’
1.31As indicated earlier in the chapter, the EIS assessment report by DESI found that the project was not suitable to proceed as it does not meet the requirements of the EP Regulation, which prohibits the release of ‘waste’ directly into groundwater.
1.32Most notably, the report determined that the target aquifer for CO2 injection—the Precipice Sandstone aquifer—is ‘not completely self-contained’ and injection of CO2 into the aquifer would ‘likely cause a deterioration in…the groundwater within the targeted injection area’.
1.33Among its conclusions, the report found that the injection of CO2 into the aquifer would ‘likely cause an irreversible or long-term change in water quality and aquifer characteristics.’
Broader issues raised throughout the inquiry
1.34The committee understands that, whilst the proposed project by Glencore will not proceed in its current form, many of the concerns raised throughout the inquiry remain worthy of closer inspection.
1.35In particular, the committee received substantial evidence on the importance of preserving the integrity and quality of the entire GAB. As the largest groundwater aquifer in the country, the GAB is closely linked to matters of water security across regional Australia, particularly during drought conditions. Evidence detailing the importance of the GAB is discussed in Chapter 2.
1.36Relatedly, the precedent of allowing CCS activities within the GAB, as well as the effectiveness of CCS technologies, was also discussed at length by participants to the inquiry.
1.37The next section provides an overview of CCS, including its risks and effectiveness, and its current regulatory and policy framework in Australia.
What is carbon capture and storage?
1.38Broadly, CCS refers to a suite of processes and technologies which are involved in capturing, transporting, and storing greenhouse gas emissions in the subsurface with the goal of permanently preventing the release of these gases into the atmosphere.
1.39The technology involves capturing CO2 produced by large industrial plants such as steel mills, cement plants, natural gas processing facilities, coal and gas fired-power plants, and other industrial facilities, compressing it for transportation and then injecting it deep underground—at least 800 metres below the surface, and typically 2 km or more. Carbon storage sites can be located both onshore and offshore.
1.40The committee received divergent views on the risks and effectiveness of CCS, as well as on the role that CCS technologies should play in Australia’s climate change mitigation framework.
Effectiveness and risks
1.41While CCS as a concept has been around since the 1970s, deployment to date has been relatively slow and limited to a small number of industries. Although there is growing momentum globally, the International Energy Agency (IEA) argues the CCS industry has not yet shown that it can operate at scale.
1.42Some submitters contended that CCS is costly and ineffective in delivering significant emissions reduction since the capture process itself is energy intensive. The Australian Conservation Foundation (ACF) argued that CCS has been ‘fraught with problems, resulting in serious breaches of proponent abatement commitments.’
1.43Further, the Institute for Energy Economics and Financial Analysis (IEEFA) observed:
Confronted with numerous technical and financial challenges, CCS projects have consistently encountered difficulties in reaching their targeted capture rates. Furthermore, targeted carbon capture is itself often far less than overall carbon emissions. Installations that see low levels of CO2 captured cannot be considered ‘decarbonised’.
1.44On the long-term effectiveness and scalability of CCS, some submitters pointed to a widespread lack of success. The IEEFA, for instance, reported that since 2000 ‘close to 90% of proposed CCS capacity in the power sector has failed at the implementation stage or was suspended early’.
1.45The Queensland Conversation Council similarly noted that, despite decades of development, ‘there are very few successful examples of CCS implemented at the scale required to meet international emissions reduction targets.’
1.46Several submitters, such as the Environmental Defenders Office (EDO), pointed to risks commonly associated with CCS processes and technologies, including failures, leaks, and ruptures of CO2 pipelines, adding that:
The injection of CO2 into subterranean storage (i.e., geosequestration) involves a risk that the gas is not contained adequately and escapes into the atmosphere, defeating the goal of CCS at the final step.
1.47Some environmental groups, such as Environmental Justice Australia, also drew the committee’s attention to what they deem the “energy penalty” of CCS, namely the increased fuel requirements required to power new or retrofitted carbon capture equipment.
1.48In addition, environmental groups expressed frustration over CCS projects being used to prolong the life of fossil fuel stations, thereby potentially delaying their retirement and contributing to the continued expansion of coal, oil, and gas extraction sectors.
1.49At the same time, proponents of the technology argued that virtually all pathways to net zero rely on the rollout of CCS, with the technology appearing in at least 27 countries’ Nationally Determined Contributions (NDCs) under the Paris Agreement.
1.50Advocates also emphasised the unique opportunity that CCS processes present to hard-to-abate, emissions-intensive industries such as steel, cement, and plastics, arguing that CCS provides a tangible and cost-effective roadmap for these heavy industries to start to decarbonise.
1.51When considering global emissions targets, Low Emission Technology Australia (LETA) submitted that CCS can make a significant contribution in the short-term and enable ongoing energy security whilst other sectors transition to a net zero economy.
1.52The Global CCS Institute defined the technology as being ‘backed by decades of global research, development, and intergovernmental collaboration’, arguing that CCS will play an increasingly critical role in public policy across the globe.
1.53Furthermore, the Mining and Energy Union Queensland District (MEU) also emphasised the need to allow time for investments in innovative technologies to materialise and deliver results, noting that:
New technology takes time, investment and research; and projects which progress the development of critical technologies to underpin our industries of the future should be supported.
CCS in Australia’s climate change mitigation strategies
1.54Following the Australian Government’s announcement of its net zero by 2050 emissions target, CCS has been increasingly pursued as a pathway for certain high emissions and hard-to-abate sectors to decarbonise. In its submission, DCCEEW noted that:
The Australian Government’s primary focus for CCS is to provide the regulatory and policy settings to enable and create a stable business environment for investment in CCS to occur. CCS needs to be effective, safe, and environmentally responsible.
1.55Currently, Australia has one operational CCS facility, the Chevron-led Gorgon carbon dioxide injection project, which began operation in August 2019 in Western Australia (WA).
1.56The Gorgon CCS project was cited by a number of submitters, particularly in connection with its inability to meet the project’s original sequestration targets. The IEEFA, for example, pointed out that, during its first five years, the project has underperformed on targets by around 50 per cent, capturing less than 4 per cent of the Gorgon LNG plant’s total emissions in 2022-2023.
1.57In addition, the ACF noted that:
Chevron received AUD$60m in government funding to support its CCS project, under the Low Emissions Technology Demonstration Fund, yet in the six years since export of LNG commenced from the Gorgon Project, out of the 20.4 million tonnes of CO2 that was extracted as reservoir emissions only 6.5 million tonnes has been stored under the island.
1.58Proponents of CCS argued that the main barrier to the successful delivery of CCS in Australia so far has been its prohibitive cost. In its submission, the MEU emphasised how recent legislative reforms have diminished such barriers:
Cost has been the main barrier to development of CCS so far, however the recent reforms to the Safeguard Mechanism are now driving a strong incentive for Australian industries to invest in decarbonisation technologies – including CCS.
1.59Responsibility for regulation of onshore CCS activities in Australia lies with states and territories. If, however, the proponent believes the proposed CCS activity may have a significant impact on a MNES, they must refer it to the Commonwealth Minister for the Environment under the EPBC Act.
Scope and structure of the report
1.60This report comprises two chapters:
This chapter sets out an overview of the proposed project, outlines key regulatory outcomes, and offers background information on CCS.
Chapter 2 presents the views of affected stakeholders, including local government representatives, agricultural producers, and First Nations communities. It discusses the possible precedent of allowing CCS projects within the GAB and concludes with the committee’s views and recommendations.
Conduct of the inquiry
1.61Details of the inquiry were advertised on the committee’s website, including a call for submissions by 2 May 2024. The committee wrote directly to various stakeholders to invite them to make submissions.
1.62The committee received 77 submissions, which are listed at Appendix 1 and are available on the inquiry’s webpage. The committee agreed to conduct the inquiry on the written evidence and did not hold a public hearing.
Acknowledgements
1.63The committee thanks the organisations and individuals who made submissions for their time and contribution to this inquiry.