Australia expands role of renewables funding agency to support CCS, hydrogen and greener metals

THE Australian Renewable Energy Agency (ARENA) now has a wider remit that includes funding CCS and hydrogen projects, following a contentious victory for the Federal Government.

The Government has defeated a motion opposing its reform of ARENA, which was established in 2012 to fund the research, development and commercialisation of renewable energy technologies. The Government commissioned a report published in 2020 – known as the King Review – to identify how it might incentivise low-cost emissions abatement including from industry. Among its recommendations, the report said the remit of ARENA should be expanded to include low-emission technologies.

The Government’s first attempt to widen ARENA’s remit was defeated in June, as opponents in the Senate pushed back against a renewable energy agency funding CCS and hydrogen produced by stream reforming natural gas. Angus Taylor, Minister for Energy and Emissions Reduction, resubmitted plans to widen ARENA’s remit but made it more explicit that the agency focus on funding low-emissions technologies identified in the Government’s Technology Investment Roadmap. These include CCS, hydrogen, cleaner aluminium and steel production, and energy storage. Opposition remained but on 4 August the changes passed.

Reasons for the opposition include concerns that widening ARENA’s scope will dilute funding for renewables technologies and allegations that the Liberal-National coalition Government is favouring industry donors.

“The Government is so desperate to give public money to its gas donors,” said Nicholas McKim, Deputy Leader of the Australian Greens in the Senate, as he called on his peers to vote down the changes.

Taylor hit back at opponents in the Labor and Green parties, accusing them of abandoning the opportunity to support clean technology and blue-collar jobs. He said the regulatory change will allow ARENA to implement A$192m (US$141m) of funding planned in the 2020 budget including A$72m for hydrogen and electric vehicle infrastructure and A$68m for industrial energy and vehicle fuel efficiency.

ARENA CEO Dan Miller said: “Over its lifetime, ARENA has supported 602 projects with A$1.77bn in grant funding, unlocking A$7.7bn of total investment. ARENA has helped to improve the competitiveness of renewable energy technologies such as solar, pumped hydro, grid-scale batteries, distributed energy, and hydrogen. These changes will enable ARENA to continue to invest in renewable energy as well as priority low emission technologies.”