Chapter 2Key issues
2.1This chapter explores the extent of support for the Environmental Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change) Bill 2023 (the bill) and examines some of the key issues raised by submitters in relation to specific aspects of the bill during the inquiry.
Overall views on the bill
2.2There was support from various submitters for the intent of the bill to give effect to Australia's international obligations under the London Protocol, while also protecting and preserving the marine environment. The important role of carbon capture and storage (CCS) in mitigating climate change was recognised by several submitters, including the Australian Petroleum Production & Exploration Association (APPEA), Geoscience Australia, and the Global CCS Institute.
2.3Similarly, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) argued that the proposed amendments to the Environment Protection (Sea Dumping) Act 1981 (the Sea Dumping Act) would:
…establish a comprehensive and robust regulatory framework, informed by reputable scientific advice and expertise, to ensure minimal impact on the marine environment. It would also provide legal certainty for businesses and organisations, while protecting the marine environment from the potential environmental risks of these activities that would occur if they were not regulated.
2.4The Department of Foreign Affairs and Trade (DFAT) argued that the bill would establish a 'comprehensive and robust legal framework to support trade and investment, while protecting the marine environment from potential environmental impacts, facilitating a productive and enabling business environment and upholding the rules-based open global economic system'.
2.5In contrast, other submitters opposed the bill on the grounds that CCS remains an unproven emissions abatement technology that will facilitate the expansion of the fossil fuel industry and pose significant long-term environmental risk to the marine environment. In relation to marine geoengineering activities, some submitters noted that many of the impacts and effectiveness of research into these techniques, such as ocean fertilisation, remain uncertain.
2.6The Environmental Defenders Office (EDO) for example argued that 'policies such as CCS and geoengineering carry the risk of justifying ongoing use and extraction of fossil fuels, and strongly recommends they should not be promoted or encouraged in order to sustain the life of the fossil fuel industry'. The EDO suggested that CCS 'carries significant risk of additional and unintentional emissions pollution in its operation, while the environmental and social risks of large-scale geoengineering remain unknown'.
2.7Similarly, Environmental Justice Australia (EJA) suggested that the bill 'undermines two key frameworks designed to ensure the fair allocation of responsibility for greenhouse gas emissions' including the 'international carbon accounting framework in relation to national responsibility for emissions, and the Safeguard Mechanism, relating to responsibility for corporate emissions'.
Comments on specific aspects of the bill
2.8While submitter feedback addressed various aspects of the bill, most commentary centred on the following key issues, some of which are not central to the bill:
the use of CCS in global and regional decarbonisation efforts;
the benefits and risks of exporting carbon dioxide streams and marine geoengineering activities; and
the need for appropriate regulation and oversight.
The use of CCS technology in global and regional decarbonisation efforts
2.9Several submitters emphasised that CCS was an important tool to meet global and regional emissions goals. For example, CO2CRC argued that CCS was an increasingly cost-effective technology that could deliver large-scale reductions in emissions for a wide range of industries:
CCS is an essential and urgent priority that is accepted as a critical component of national and global emissions reduction strategies. Australia's amendment to Article 6 of the London Protocol should be considered carefully and then adopted expeditiously, so that project momentum within Australia and with its key trading partners can be maintained and, thereby, our collective emissions targets can be met.
2.10Indeed, DCCEEW observed that both the 'Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) recognised the role that CCS can play in emissions scenarios, with the aim of limiting global temperature rise to 1.5°C or under 2°C of pre-industrial levels'. DCCEEW further noted that the 'IPCC, IEA, and International Renewable Energy Agency (IRENA) also recognise that a range of [carbon dioxide] removal technologies are required to meet global net zero emissions'.
2.11Similarly, APPEA suggested that '[w]ithout the import and export of [carbon dioxide], countries with limited domestic [carbon dioxide] storage potential will find meeting emissions reductions targets technically challenging and more expensive'. APPEA noted:
Reaching net zero by 2050 will be 'virtually impossible' without CCUS. CCUS is a proven technology with decades of experience globally. CCUS plays a unique role amongst a portfolio of emissions reductions technologies as it can address emissions from existing facilities, mitigate emissions from hard-to-abate industry, support low-carbon hydrogen production and underpin large-scale carbon removal.
2.12DFAT emphasised that the bill would align with Australia's interest in supporting the energy security and decarbonisation efforts of key regional partners. DFAT argued that this would particularly be the case in relation to those 'partners who have limited storage capacity to achieve their clean energy transition and emissions targets and are looking to Australia's natural advantage in this area to lead decarbonisation efforts in the region'.
2.13Geoscience Australia noted that 'Australia has several competitive advantages and is an attractive proposition for the international trade of [carbon dioxide] for the purpose of geological storage, particularly to nations in the Asia-Pacific region'. This also included Australia's 'established legislative and regulatory environment, expertise in CCS regulation and monitoring, and large offshore geological storage potential'.
2.14However, other participants questioned the benefits of CCS technology in global and regional decarbonisation efforts and argued that CCS was an unproven mechanism for achieving any meaningful reduction in emissions. For example, the Institute for Energy Economics and Financial Analysis (IEEFA) noted:
CCS has been around since the 1970s and continues to fail to live up to the expectations promoted by oil and gas producers. Moreover, it only deals with a fraction of the total greenhouse gas (GHG) emissions, as it ignores the 85% to 90% of total emissions from the energy sector that are the Scope3 emissions when oil and gas is burned by the consumer.
2.15Indeed, many participants pointed to CCS projects in Australia and globally that had not delivered on forecast emissions reductions. For example, the Australian Conservation Foundation (ACF) argued:
The abject failure of Chevron's Gorgon project is one example, which has been plagued by serious delays, cost overruns and failures – but most notably has seriously underperformed against the agreed commitment to re‑inject 80 per cent of Gorgon's [carbon dioxide] deeply and permanently underground. It has been reported that almost 15 million tonnes of [carbon dioxide] arrived on Barrow Island [off the Western Australia coast], and only 30 percent of it was injected underground, falling far short of Chevron's 5-year requirement, and resulting in a serious increase in its anticipated emissions.
2.16Similarly, several submitters pointed to an analysis conducted by IEEFA that raised questions about the long-term technical and financial viability of the Sleipner and Snøhvit CCS projects in Norway. Inits submission, IEEFA noted that '[n]o potential CCS basin is the same, and there is no guarantee that the [carbon dioxide] will remain within a proposed reservoir given the different geological formations of each planned CCS facility and the challenges of keeping [carbon dioxide] in a liquid state so that it does not leak'.
2.17Other organisations, such as Doctors for the Environment Australia (DEA), suggested that supporting CCS projects 'diverts funding from proven technologies that will reduce emissions while delaying our transition to renewables'. Likewise, Surfers for Climate called for investment in 'the things we know can cut emissions quickly and bring down power prices – like renewables backed by storage'.
2.18However, DCCEEW pointed out that 'offshore CCS is part of a suite of decarbonisation strategies and offers a viable storage solution to emissions reduction projects that capture [carbon dioxide]'. DCCEEW noted:
…that projects from domestic proponents are already considered under existing Australian law – the Sea Dumping Act currently provides for the assessment and permitting of sequestration for domestically produced [carbon dioxide] in Australian waters, in accordance with the London Protocol.
2.19Additionally, the Global CCS Institute pointed out that there were currently 37operational CCS facilities around the world, a subset of which involve sub‑seabed sequestration in a geological formation, and noted:
Several studies, including the IPCC 1.5°C Special Report and those published by the [IEA], have consistently highlighted the critical role of CCS in facilitating the global transition to a net zero emissions economy. The IPCC states that CCS will need to store an average of 600 gigatonnes of [carbon dioxide] this century to achieve the global climate targets of the Paris Agreement. Three out of the four pathways modelled by the IPCC for limiting temperatures to 1.5°C by 2050 incorporate a significant role for CCS and require its widespread adoption.
Benefits and risks of exporting carbon dioxide and marine geoengineering
2.20According to several participants, implementation of Australia's international obligations under the London Protocol would generate environmental and economic benefits to Australia, particularly in relation to the developing international market for carbon dioxide streams. For example, DFAT noted:
Australian offshore and onshore CCUS have the potential to drive significant international investment into Australia, and support facilities that are trade-exposed since the introduction of the new Safeguard Mechanism…
An example of this can be seen through Santos and partners (including major Korean energy firm SK E&S) use of Darwin LNG and Timor-Leste’s Bayu-Undan facility to capture and store carbon dioxide from their Barossa gas field to meet the requirements of Japanese and Korean markets for low carbon LNG. Although still subject to necessary regulations, the Bayu-Undan pipeline, directly relies on ratification of the 2009 London Protocol amendment, because it involves the export of [carbon dioxide] from Australia.
2.21CO2CRC argued that existing CCS projects have shown that 'the storage of [carbon dioxide] within the many suitable geological formations and settings presents no risk to the environment or to Australia's emission profile'. CO2CRC also argued that the 'transport of [carbon dioxide] via ships and pipelines has also been demonstrated to be safe through decades of large-scale industrial use and has taken place within a well-established regulatory and safety framework'.
2.22Several submitters also noted the increasing interest from Australia's immediate region in the development of an international market for the storage of carbon dioxide streams. For example, APPEA argued that 'without the import and export of [carbon dioxide], countries with limited domestic [carbondioxide] storage potential will find meeting emissions reductions targets technically challenging and more expensive'. APPEA further noted:
Countries such as Japan, South Korea and Singapore have limited [carbon dioxide] storage potential and are seeking to partner with Australia for storage solutions given our abundant geological [carbon dioxide] storage resources, industry expertise, and world-leading regulatory frameworks. It can also create efficiencies of scale to facilitate the fast-tracking of emissions reductions from Australian industry. In Europe, similar trading relationships are being established around the North Sea's offshore [carbon dioxide] storage resources.
2.23However, other stakeholders highlighted that CCS storage and export carries significant risks of GHG leakage from exploration, transport, and storage facilities. For example, the EDO submitted:
Drilling and laying pipelines in offshore locations may pose significant threats to offshore ecosystems. In the event of leaking carbon dioxide (CO2) from CCS activities, the environmental impact on marine environments could be significant. This would be compounded if prolonged leaks occurred or were inadequately monitored and managed. Leaking CO2 risks causing acidification of the water around the CCS site. CO2 leakages lead to CO2 dissolving into seawater and decreasing seawater pH, with the effect of acidifying the marine environment.
2.24Several submitters expressed concern about the management of the environmental risks associated with the import and export of carbon streams, as well as a lack of assurance about protections in destination countries. For example, Lock the Gate Alliance argued:
There is no requirement in the bill for an environmental impact assessment prior to a permit being granted for the import or export of carbon dioxide. Experience in Norway has shown that considerable investigation is required into the specific geology of the seabed area targeted for sequestration. Even with the extensive investigations and studies that have been undertaken in Norway, unexpected movement and accumulation of carbon dioxide below the ground has occurred, according to a recent report from the [IEEFA].
2.25The EJA argued that, to address some of these concerns, the bill should be amended to provide 'assurance about the effectiveness of CCS and environmental management regulation in [carbon dioxide] destination countries' and to increase 'the transparency and accountability of [carbon dioxide] transport permits'.
2.26Similarly, DEA argued that that bill 'would need to describe requirements for those countries sequestering [carbon dioxide] to demonstrate the regulatory capacity and readiness on the part of their governments to ensure the same level of environmental protection as Australia, or the mechanism by which that can or will occur'.
2.27However, DCCEEW argued that the 'regulatory framework for export permits will be guided by the current domestic permit application and assessment process' and explained 'that a permit could not be issued until appropriate bilateral agreements or arrangements are in place between exporting and receiving countries'. DCCEEW further noted:
It is expected that as part of discussions between countries, consideration of requests for export or import of [carbon dioxide] for sequestration will address matters relating to responsibilities for maintaining the stored [carbon dioxide] and for any emissions, impact on Australia's Paris Agreement target compliance and emissions inventory reporting, the capacity of partner countries to accurately monitor emissions impacts and any leakage, and consistency with the global effort to achieve the Paris Agreement temperature goals.
2.28Additionally, APPEA argued that Australia's comprehensive regulatory arrangements for carbon dioxide storage would ensure that local environmental risks are identified and mitigated effectively:
Commonwealth and state CCUS legal and regulatory frameworks along with [carbon dioxide] storage guidelines in the London Protocol and international CCUS standards provide a comprehensive basis for the effective management and mitigation of environmental and other risks associated with [carbon dioxide] storage. Decades of project experience also underscore that geological storage of [carbon dioxide] is a safe, proven and effective abatement solution.
2.29Geoscience Australia also argued that Australia 'has an opportunity to continue to promote "best practice" in setting and adopting standards for environmental information that is used to understand the benefits and impacts of offshore CCS and marine geoengineering activities'.
2.30Some participants raised concerns about the regulatory framework for the geoengineering activities to be permitted under the bill. For example, the EDO noted that 'geoengineering in the marine environment carries several risks, including the possibility of yet unknown consequences and detrimental effects'. The EDO argued:
…ocean fertilisation specifically could also have unintended consequences, such as causing damaging toxic algae blooms, increasing ocean acidification, and depleting oxygen in deep waters. Further, reducing emissions of GHG as rapidly as possible is essential to addressing the climate crisis. Technological fixes, like geoengineering, cannot be used as a justification for slowing the urgent and necessary phase out of fossil fuels.
2.31However, DCCEEW argued that the regulation of 'this type of activity, through a robust application, assessment and approval permitting process, would ensure that only legitimate scientific research activities, which explore options to reduce atmospheric [carbon dioxide], can proceed'. Further, DCCEEW noted that 'Australia would apply a precautionary approach to evaluating activities seeking to undertake legitimate marine geoengineering research for climate change mitigation'.
2.32On this point, the National Environmental Law Association (NELA) submitted that the application of the precautionary principle with respect to geoengineering research derives from Australia's obligations under London Protocol:
We note that to fulfil its international law commitments, Australia would be required to ensure that all activities are regulated under the [Sea Dumping Act] in a manner consistent with the London Protocol. Notably, under the London Protocol, Australia is obliged to apply a precautionary approach to protect and preserve the marine environment from all sources of pollution, including when evaluating applications for permits to undertake legitimate marine geoengineering research for climate change mitigation purposes.
2.33NELA noted the limitations of the bill in this regard:
Despite this, an applicant is not expressly required to conduct research and monitoring with respect to the environmental impacts of a proposed marine geoengineering activity under the bill.
Appropriate regulation and oversight
2.34The committee received evidence about the importance of establishing an appropriate legal framework to ensure that there is adequate monitoring regarding the environmental impacts of the activities authorised by the bill. For example, as noted above, NELA suggested changes to the bill to improve the 'robustness of assessments regarding the impacts of proposed activities on the marine environment, and to explicitly align the requirements of the [Sea Dumping Act] with international best practice under the London Protocol'.
2.35The National Maritime Union of Australia (MUA) suggested the need to strengthen the regulatory framework under the Sea Dumping Act, prior to the introduction of the proposed amendments in the bill. The MUA argued that this would ensure that the Sea Dumping Act 'reflects current standards of governance and transparency to meet the scale of oil and gas industry decommissioning prior to enabling novel, unproven technologies'.
2.36In relation to the proposed export of carbon dioxide streams, NELA suggested that 'the regulatory roles and responsibilities of the relevant authorities should be clarified, given that the export activities would involve both domestic and international stakeholders'. Likewise, the Global CCS Institute indicated that 'further development and clarification of the roles and obligations may be required under the Sea Dumping Act, with regard to the regulatory administration and approval of [carbon dioxide] export activities'.
2.37NELA also suggested an increase in the severity of the penalties under the Sea Dumping Act to provide sufficient deterrence for any action taken without a permit:
Given the dire state of the environment in Australia and the potential negative environmental impacts that may be caused by carrying out the activities proposed to be introduced by the bill, it is essential that the penalties available to the regulator are commensurate with the nature and extent of the harm that may be caused.
2.38Several submitters also emphasised the importance of First Nations consultation and involvement in decision-making about future CCS projects that would be enabled by the bill. For example, the Nurrdalinji Native Title Aboriginal Corporation expressed concern about the 'lack of transparency in relation to the exploration agreements and limited detail provided about what is planned for the Beetaloo and the scale of the development'.
2.39Notwithstanding the above concerns, the Department of Industry, Science and Resources noted that once the bill is adopted 'further work would be required across government to ensure any relevant policy, legal and environmental issues are appropriately regulated and managed going forward'.
Committee view
2.40The committee acknowledges the range of views expressed in relation to the measures proposed in the bill, including the transboundary movement of carbon dioxide for sub-seabed sequestration and further research into marine geoengineering techniques.
2.41The committee notes that the weight of evidence received during the inquiry relates to the economic, technical, and environmental benefits or disadvantages of CCS. While these are important matters that are worthy of public debate, they were not central to the committee's inquiry, which focused on the provisions of the bill that would enable Australia to meet its obligations under the London Protocol.
2.42The committee acknowledges the benefits of implementing Australia's obligations under the London Protocol, including ensuring the establishment of a structured regulatory framework for such activities, via a dedicated application, assessment and approval permitting process. This would provide legal certainty for industry and research organisations.
2.43Many submitters argued that the bill would align with Australia's publicly stated support and recognition of the diverse pathways for decarbonisation of countries, particularly for those with less favourable sequestration sites or renewable energy options.
2.44The committee notes that these supporters of CCS view it as a safe, proven, and cost-effective technology that will play an important role in addressing emissions from existing facilities and hard-to-abate industries.
2.45The committee notes the strong concerns expressed by other submitters about the potential risks associated with allowing activities such as CCS and geoengineering. Those opposed to CCS as a potential abatement technology, argued that CCS is not proven at a commercial scale, and creates environmental, health and safety risks. Concerns were also raised that allowing transboundary movement of carbon dioxide would facilitate the ongoing expansion of the fossil fuel industry, while also posing significant long-term risks to the marine environment.
2.46The committee notes the evidence from DCCEEW that the bill will establish a comprehensive regulatory framework, informed by scientific advice and expertise, to ensure minimal impact on the marine environment. Combined with the safeguards established under the London Protocol and Australia's domestic regulatory arrangements, the committee understands the bill will effectively manage and mitigate potential environmental and other risks.
2.47On balance, the committee is satisfied that the concerns about environmental impacts can be addressed through the current and proposed regulatory framework. In this regard the committee notes that DCCEEW has indicated that Australia would take a precautionary approach to evaluating activities seeking to undertake legitimate marine geoengineering research. Overall, the committee is of the view the bill will help meet Australia's international obligations under the London Protocol. Accordingly, the committee recommends that the bill be passed.
2.48The committee recommends that the bill be passed.
Senator Karen Grogan
Chair