Labor gives up on clean coal

Programs backing carbon capture and storage were slashed in this year’s budget to the tune of $780 million. It appears the government has lost patience with the glacial progress from the coal sector.

As the table below illustrates, programs supporting carbon capture and storage, and coal mining more generally, were slashed in this year’s budget.

All up the government has saved around $780 million from programs aimed at progressing CCS. These CCS programs have been plagued by slow progress and personified the grant funding deferral money-go-round.

The Low Emission Technology Demonstration Program, for example, was unveiled back in 2004 by the Howard government and the projects it awards funding to are still yet to all be completed, with several falling along the way side.

The grim reality has now set in that this is very far from being the quick and inexpensive fix coal company PR departments had spruiked in the mid 2000s as they tried to fend off carbon pricing and renewable energy support policies. Developing CCS projects has turned out to be a complex, difficult, slow and expensive process. And in the end the government appears to have run out of patience.

In light of the lower carbon price the government has also taken the opportunity to cut the package of assistance it was to provide to coal mining as part of the introduction of the carbon price. There will be $28 million less to fund emission reduction projects for gassy coal mines, while the assistance provided to gassy coal mines purely for being highly polluting was reduced by $274 million (this is what the government brands the Coal Sector Jobs Package – but is really just hush money).

2013-14 Budget Allocations and difference to prior year’s Budget

Graph for Labor gives up on clean coal

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