We all know that carbon dioxide is a key “villain” as the world moves towards a more environmentally sustainable future and seeks to arrest the ever-increasing effects of climate change on our planet.

The science around capturing carbon and storing it before it is emitted into the environment and storing it underground has been around for some time but there has been relatively little global appetite for embracing this technology. Challenges in making carbon capture and storage (“CCS”) economic have been a major obstacle.

In 2020, there were only twenty CCS projects in commercial use globally. A major setback occurred in 2020 when one of the flagship CCS projects, Petra Nova in Texas, was mothballed. Interestingly, Australia has one of the leading CCS facilities in the world established by Chevron in connection with its Gorgon LNG project in Western Australia.

The political and commercial landscape, however, seems to be shifting in Australia in relation to the desire to further embrace and utilise this technology as part of an overall strategy to achieve a zero emissions economy.

This has been driven by:

  • international bodies such as the Intergovernmental Panel on Climate Change which announced in 2018 that technologies capable of removing carbon from the atmosphere (of which CCS is one) will be required to meet the goals of the 2015 Paris climate agreement. This was followed by the International Energy Agency stating in 2020 that it would be virtually impossible for the world to achieve the Paris agreement’s 2050 targets without capturing and storing emissions generated from factories, power generation, transport and other sources because the transition to renewable energy will not cut emissions in time;
  • industry bodies such as the Global CCS Institute which point out that CCS is the only technology able to address emissions across major difficult-to-decarbonise industrial sectors, such as steel, chemicals and fertilisers; and
  • the European Union, which has the world’s largest carbon trading system, including CCS on the list of technologies eligible for funding through its €10 billion emissions reduction “innovation fund.

Recent overseas developments

Most recently in 2021, the Northern Lights CCS project received the green light from the Norwegian government with final state support agreements being signed in March 2021 with the project’s commercial partners. The project is a partnership between Shell, Norwegian energy company Equinor and the French company Total. The project will initially capture carbon dioxide (CO2) from industrial sites in Eastern Norway. CO2 will be transported by ship to a plant on Norway’s west coast, and then sent 110 kilometres by pipeline to be permanently stored 2,600 meters below the seabed at a site on the continental shelf in the northern part of the North Sea. Estimated total investment under the development plan is said to be close to US$700 million with annual operating costs at around US$43.6 million.

The Norwegian Parliament has approved the development of carbon capture technology at a cement factory which will provide the initial carbon for storage. Norway also proposes to fund carbon capture at an energy-from-waste plant in Oslo provided the plant secures further financial support. Northern Lights is part of Norway’s full-scale CCS project. Significantly, it aims to become the first carbon storage facility with capacity to transport and store CO2 from industrial facilities in Norway and potentially from across Europe. It also proposes to use shipping as a way of widening access to a carbon storage market. In its first phase, expected to start operations by 2024, Northern Lights will transport and store up to 1.5 million tonnes of CO2 a year increasing to 5 million tonnes a year as demand grows.

Also, in October 2020, oil major BP announced that it had, formed a partnership with Eni, Equinor, Shell, Total, and National Grid (the Northern Endurance Partnership),to develop offshore CO2 transport and storage infrastructure in the UK North Sea. This ‎project will serve the proposed Net Zero Teesside (NZT) and Zero Carbon Humber (ZCH) ‎projects that aim to establish decarbonized industrial clusters in Teesside and Humberside (two of the UK’s largest industrial clusters). Both projects are expected to be commissioned by 2026 ‎with pathways to achieve net-zero as early as 2030 through a combination of carbon capture, ‎hydrogen, and fuel-switching. According to BP, the Northern Endurance Partnership has submitted a bid for funding through Phase 2 of the UK government’s Industrial ‎Decarbonisation Challenge, aiming to accelerate the development of an offshore pipeline network to ‎transport captured CO2 emissions from both NZT and ZCH to offshore geological storage beneath the ‎UK North Sea.‎

What is the technology

CCS involves capturing carbon dioxide emitted from an industrial process and permanently keeping it out of the atmosphere by storing it in some manner. Examples of the types of industrial processes which generate carbon dioxide emissions include burning gas or coal to generate electricity and processes for manufacturing cement or steel. Usually large-scale storage of carbon involves pumping it underground, typically into geological formations from which oil or gas have been extracted.

Australia has been a world leader in the use of CCS with one of the largest facilities having been developed by Chevron in connection with its Gorgon LNG project. Chevron is Australia’s sixth largest emitter of greenhouse gases and its Gorgon project is Western Australia’s second highest emitting project. The Gorgon project was granted approval on the condition that it capture and stored an average of 80% of the carbon dioxide that existed in the gas it extracted. The company is reported to have invested A$3.1 billion into efforts to capture a portion of its emissions and permanently store them underground. According to Chevron, since August 2019, more than 4 million tonnes of CO2 have been injected into permanent underground storage in oil traps under Barrow Island in Western Australia’s north-west.

For those interested in the process itself, in the case of the Gorgon project, the gas extracted contains 14% CO2 which is too high to meet the requirements of the regional gas market – so, a large part of that CO2 needs to be stripped from the gas. The gas and CO2 must first be separated. The CO2 then needs to be pressurised and cooled to the point where it has properties between a gas and a liquid. Then it has to be transported or piped to the place where it is to be injected underground. The geological structure into which the carbon dioxide is injected contains water which needs to be pumped out first and then injected somewhere else. The process is complex and faces a number of ongoing challenges.

How does the Federal Government view the use of CCS?

Energy and Emissions Reduction Minister, Angus Taylor announced in 2020 that CCS would be one of five key technologies that the Federal Government would support in its efforts to reduce emissions. This is contained in the Federal Government’s so-called Technology Investment Roadmap released in 2020. The objective of the roadmap is to provide an enduring strategy to accelerate the development and commercialisation of new and emerging low emissions technologies. One of the announced stretch targets for CCS is CO2 compressions, hub transport and storage for under $20 per tonne of CO2.

The Federal Government also committed to a carbon capture and storage fund worth $50 million to support emissions reduction from power generation, heavy industry and natural gas production with potential sites identified in Moomba, South Australia, the Surat and Bowen Basins in Queensland and offshore sites including the Browse and Carnarvon Basins in Western Australia. The Carbon Capture, Use and Storage Development Fund was established to provide businesses with grants of up $25 million for pilot projects or pre-commercial projects aimed at reducing emission – applications for fund grants closed on 29 March 2021.

Part of that strategy was also to expand the mandates of both the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) to include an ability to support CCS. In August 20202, the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill (“Bill”) was brought before Parliament to change CEFC’s investment rules to enable it to use its $1 billion Grid Reliability Fund for gas and infrastructure projects and remove a rule that prevents it from investing in loss-making projects - the Bill has not been passed as yet.

Of note, the Bill establishes a $1 billion Grid Reliability Fund (“GRF”) through a new Special Account to be administered by the CEFC and permits for regulations to expand this appropriation in future. It establishes a new category of GRF investments which are to be funded from this GRF Special Account and clarifies the definition of low-emissions technologies to ensure the CEFC is able to invest in the technologies described in the GRF announcement that support the achievement of a low-emissions energy system in Australia. It also amends the definition of an “investment” to allow for additional types of investments to be prescribed by regulations for the purposes of the GRF (including activities that may not make an investment return) and quarantines all GRF investments from the general requirement for the CEFC to invest at least 50 per cent of its funds in renewable energy projects.

In April this year, the Prime Minister, Scott Morrison, made announcements in relation to the development of four hydrogen hubs under a $275.5m federal program and the provision of a further $263.7 million towards projects including CCS.

While these announcements show commitment at the Federal policy level to CCS, the other part of making the technology economic – namely generation of Federal carbon credits- has not yet been addressed. The Morrison government has indicated that the Clean Energy Regulator is progressing work on this at the moment but nothing has been announced. Carbon credits are important to the economics of CCS as, once earned, the credits can be sold to third parties seeking to offset their carbon emissions thereby generating a revenue stream for the parry who has earned the credits.

The other important issue to be addressed is the making of changes to the Climate Solutions Fund so that CCS can qualify as an eligible technology. The Climate Solutions Fund was set up in 2015 with $2.5 billion funding under the Abbott government as an alternative to a carbon tax. It was topped up with a further $2 billion by the Morrison government in 2019. The Fund pays polluters to employ cleaner technologies and funds carbon capture through tree planning, soil carbon sequestration on farms and energy efficient systems in commercial properties as well as methane capture from landfill and waste management.

The industry response

There are at least two major CCS projects on the drawing board in Australia.

South Australia

Santos, one of Australia’s major gas producers, has a CCS project under development at Moomba in South Australia as part of its commitment to decarbonize its business by 2040 and grow its clean fuels capability. It was reported in October 2020 that the final field trial for the project – the injection of 100 tonnes of CO2 into a depleted gas reservoir in the Cooper Basin – had been completed. Once fully developed, the initial project will store up to 1.7 million tonnes of CO2 per annum. These depleted fields in the Cooper Basin have held natural gas and oil for 85 million years and can provide for safe, low-cost and permanent storage of carbon. In the long term, carbon storage in the Cooper Basin could store 20 million tonnes a year from other industrial emitters for more than 50 years.

A final investment decision on the $210 million CCS project at Moomba is reportedly going to be made by the company in the second half of 2021. The major hurdle at the moment is an approved methodology for CCS projects to generate carbon credits as, according to the company, this is required to make the project economic – again according to company sources, the cost of abatement is still at $25 - $30 per tonne. If the project proceeds, it will be the second largest in the country behind Chevron’s Gorgon CCS project. Santos was also reported in early 202 to have entered into an agreement with BP to store 20 million tonnes of carbon each year in the Moomba gas fields.

Queensland

Glencore’s CTSCo arm also has a $230 million CCS project under development in the Surat Basin in Queensland. This project will capture circa 5% of the CO2 from the Millmerran Power Station and store it underground in the Surat Basin. The project has been part funded by LET Australia and the Australian National Low Emissions Coal R&D. According to the company, the storage component of the CTSCo project (which is a demonstration plant) will provide a potential pathway to an industrial-scale storage hub in Queensland capable of servicing multiple industrial users including coal, natural gas and hydrogen.

Other potential players include CarbonCure Technologies, a Canadian “cleantech” company that has developed technology that stores carbon captured in the cement making process. Local venture capital firm Taronga Ventures (which is backed by Dexus and CBRE) was reported to have taken a stake in this company in 2020 with the intention of bringing its technology to the Australian market.

Financing challenges

From a financing perspective, the difficulty with CCS projects is that, generally speaking, the project does not itself generate revenue - rather the CCS project represents a cost which a company bears as a means of addressing the emissions from its revenue generating business.

However, there is a developing market in Australia and globally for “green bonds” and ESG loans where lower pricing of capital markets and debt products is available to companies which can commit to achieving specified environmental or sustainability targets. These types of products might in future be available to companies who adopt CCS as a means of capturing and storing emissions from their revenue generating business (such as gas production or fossil fuel fired power generation) or storing emissions produced by other emitters.

At a forum in September 2020, the managing director of HSBC’s sustainable finance business was reported as commenting that there was a need to develop a “transition bond” mechanism or similar equivalent loan product to assist high carbon emitters to demonstrate that they are taking steps, through CCS, for example, to lower their emissions footprint – this would assist in the development of a robust business model that would enable companies developing CCS projects to raise this form of debt and repay it. It remains to be seen as to whether the capital and debt markets are prepared to extend the “green” bond and ESG loan concepts to include these types of “transition” debt products.

Other commentators have suggested that CEFC loans and ARENA grants should be made available to companies investing in CCS as a means of providing low-cost capital to the development of CCS initiatives on a predictable and sensible basis. Such an approach would recognise that CCS projects have large capital requirements but can deliver big numbers in terms of abatement.

On the revenue front, large scale CCS projects with significant storage capacity may also be able generate revenue by offering to take CO2 from other emitters and bury it underground for a fee and, once a suitable carbon credit scheme is in place, sell carbon credits to other emitters.

Opportunities

As the global market for CCS develops, with the resultant opportunities for developers and investors to make a commercial return from CO2 storage facilities (i.e. by offering to store waste from other emitters), it is interesting to consider who might be in a position to benefit by achieving economies of scale in CO2 storage.

The large multi-national oil companies are obvious candidates to invest in this sector as they have access to depleted oil and gas fields which may be suitable for long term CO2 storage. As noted above, several of the major oil companies are already investing in the development of these facilities. Those companies also have access to drilling and seismic data relating to those fields which will be important in determining their suitability for CO2 storage. Governments will often require such data before approving the use of such fields for CO2 storage.

In addition, there are a number of companies (such as Schlumberger, Weatherford and Baker Hughes) which may also have valuable data (e.g. in the form of test drilling and seismic survey results) which may be of interest to investors who want to develop CO2 storage facilities. There may be opportunities for those companies to partner with financial investors (such as or sovereign wealth funds) to monetise that data by making it available to developers/investors for a commercial return.

Regulation of CCS in Australia and other state led CCS initiatives

Offshore waters

Greenhouse gas storage in Australia’s offshore waters is regulated by the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (“OPGGS Act”).

By agreement between the Commonwealth, the States and the Northern Territory, it has been agreed that Commonwealth offshore petroleum legislation should be limited to the area that is outside the coastal waters of the States and the Northern Territory. For this purpose, the outer limits of each State’s and the Northern Territory’s coastal waters starts 3 nautical miles from the baseline of the territorial sea.

The OPGGS Act is supported by four Regulations:

  • Offshore Petroleum and Greenhouse Gas Storage (Greenhouse Gas Injection and Storage) Regulations 2011;
  • Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011;
  • Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009; and
  • Offshore Petroleum and Greenhouse Gas Storage (Safety) Regulations 2009.

The Regulatory guiding principles for CO2 capture and geological storage set a consistent national approach to CO2 capture and geological storage.

The National Offshore Petroleum Safety and Environmental Management Authority (“NOPSEMA”) assess and accept environmental plans and the Offshore Petroleum Titles Administrator manages day-to-day administration of petroleum and greenhouse gas titles in Australian waters. All greenhouse gas activities must have an environment plan assessed and accepted by NOPSEMA before an activity can take place

The OPGGS Act describes how the petroleum (oil and gas) industry and the GHG industry coexist. In some circumstances, one activity could impact the other. To manage this, the legislation distinguishes between pre-commencement petroleum titles and post-commencement petroleum titles. All petroleum exploration permits awarded after November 2008, including titles directly derived from these titles, are considered post-commencement titles. If there is no agreement between a petroleum titleholder and a GHG titleholder, and the two activities cannot co-exist, the responsible Commonwealth Minister can decide which activity should proceed in the public interest. Once granted, the significant impacts test protects the post-commencement petroleum production licence.

The Commonwealth Government releases offshore areas for greenhouse gas assessment via the offshore GHG acreage release. The release provides an opportunity for companies to apply for a GHG assessment permit over an area of interest. The releases are only held when there is sufficient interest, and they usually run for 12 months. There have been 2 greenhouse gas storage acreage release processes to date as follows.

  • in 2012, the Victorian government was awarded a greenhouse gas assessment permit for the CarbonNet project. The permit covered 4,400 km2 off the Gippsland coast; and
  • in 2015, the Victorian government was awarded 3 greenhouse gas assessment permits.

Companies granted a GHG assessment permit in an acreage release, can undertake exploration and appraisal activities in their permit area. If they find a suitable site for permanent greenhouse gas storage in their area, they must apply for a declaration of GHG storage formation. Companies with a declared GHG storage formation who are not in a position to inject, can apply for a GHG storage holding lease. Companies wanting to commence permanent injection and storage in a declared storage formation, must apply for a GHG injection licence. .

Victoria

CCS in Victoria is regulated by the Greenhouse Gas Geological Sequestration Act 2008 (Vic) (“GGGS Act”).

The GGGS Act facilitates and regulates the injection of greenhouse gas substances into underground geological formations for the purpose of permanent storage of those gases, including the facilitation and regulation of the exploration for suitable underground geological storage formations. It does not apply to an underground geological storage formation that is within the area defined as the offshore area in the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (Vic).

The GGGS Act is both comprehensive and prescriptive – some features of note are as follows:

  • The Crown owns all underground geological storage formations below the surface of any land in Victoria (except land (other than Crown land) to the extent that the underground geological storage formation is within 15⋅24 metres of the surface of the land). If a greenhouse gas injection and monitoring licence is cancelled or surrendered, the Crown becomes the owner of any greenhouse gas substance that has been injected into an underground geological formation under that licence.
  • A person must not carry out (i) any greenhouse gas sequestration formation exploration activity in Victoria except under, and in accordance with, an authority or as otherwise permitted by the Act or (ii) any greenhouse gas substance injection and monitoring in Victoria except under, and in accordance with, an injection and monitoring licence or as otherwise permitted by the Act.
  • If there is a native title holder in relation to land that is subject to an application for an authority under the Act, the Minister must not issue the authority in respect of that land unless the Minister is satisfied that the relevant procedures under the Native Title Act have been followed.
  • The Act deals with circumstances where an underground geological storage formation that is likely to be geologically suitable for the injection and permanent storage of a greenhouse gas substance extends over a number of areas in a way that legally entitles more than one holder of an injection and monitoring licence to carry out greenhouse gas substance injection and monitoring and also where part of the underground geological storage formation is outside Victoria (or the Minister reasonably believes that part of the formation is outside Victoria).
  • The holder of an authority has a duty to consult with the community and relevant municipal councils throughout the period of the authority.

The Offshore Petroleum and Greenhouse Gas Storage Act 2010 (Vic) deals with the issue of permits, leases, licences and authorities relating to injection and storage of greenhouse gases in offshore areas (i.e. coastal areas within 3 nautical miles from the baseline of the territorial sea). Notably:

  • It is an offence to explore in the offshore area for a potential greenhouse gas storage formation, or a potential greenhouse gas injection site, except under a greenhouse gas assessment permit or as otherwise authorised or required by the Act.
  • The Minister must have regard to the impact (if any) that any of the key greenhouse gas operations to which an application for approval relates could have on petroleum exploration operations, or petroleum recovery operations, that are being, or could be, carried on under other petroleum permits, leases or licences issued under the Act.
  • If the Minister is satisfied that a “serious situation” exists in relation to an identified greenhouse gas storage formation specified in a greenhouse gas injection licence, the Minister can give directions to the licensee including to take all reasonable steps to ensure that operations for the injection or storage of a greenhouse gas substance into the identified greenhouse gas storage formation are carried on in a manner specified in the direction; or to cease or suspend the injection of a greenhouse gas substance at a site or sites specified in the direction or to cease or suspend operations for the injection of a greenhouse gas substance into the identified greenhouse gas storage formation.
  • A greenhouse gas injection licensee may apply to the Minister for a site closing certificate in relation to a particular identified greenhouse gas storage formation specified in the licence. The Act also provides for surrender and cancellation of greenhouse gas tenures. The Minister may give site closing directions to greenhouse gas injection licensees. The Minister may give remedial directions to greenhouse gas titleholders or former greenhouse gas titleholders about the removal of property, the plugging or closing off of wells; the conservation and protection of natural resources or the making good of damage to the seabed or subsoil.

Queensland

CCS is regulated in Queensland by the Greenhouse Gas Storage Act 2009 (Qld) (“GGS Act”).

The main purpose of the GGS Act is to help reduce the impact of greenhouse gas emissions on the environment principally by facilitating the process called greenhouse gas geological storage, also called greenhouse gas storage (GHG storage). It facilitates GHG storage by providing for the granting of authorities (called ‘GHG authorities’) to explore for or use underground geological formations or structures to store carbon dioxide, or carry out related activities and creating a regulatory system for the carrying out of activities relating to GHG authorities. The Act applies to the coastal waters of the State as if the coastal waters of the State were part of the State but does not apply to the adjacent area under the Petroleum (Submerged Lands) Act 1982.

The Petroleum and Gas (Production and Safety) Act 2004 (the P&G Act) also facilitates the operation of the GGS Act by providing for survey licences under that Act to be able to be granted for potential GHG stream pipelines; providing for pipeline licences under that Act to be able to be granted for GHG streams; applying chapter 9 of that Act (the P&G Act safety provisions) to particular authorised activities for GHG authorities and applying its provisions about investigations and some of its provisions about enforcement to authorised activities for GHG authorities.

As is the case with the Victorian legislation, the GGS Act is both comprehensive and prescriptive - some features of note are as follows:

  • All GHG storage reservoirs in land in the State are and are taken always to have been the property of the State - a person does not acquire any property in a GHG storage reservoir or petroleum in it only because the person creates or discovers the reservoir.
  • The types of authority available under the GGS Act are a GHG exploration permit (also called a GHG permit) as initially granted, continued in force or renewed and a GHG injection and storage lease (also called a GHG lease) and a GHG injection and storage data acquisition authority (also called a GHG data acquisition authority). The granting of a GHG authority does not create an interest in any land.
  • A GHG lease does not have a fixed term and continues until it is surrendered or otherwise ends under the Act. The lease must cover a single parcel of land and must not include any unavailable land (as defined). Mandatory conditions are specified for GHG leases. A lease holder must pay the state an annual rental as prescribed by regulation.
  • A GHG lease holder can surrender a lease only if an application for surrender has been made and the surrender has been approved. Any GHG stream injected into a GHG storage reservoir in the former GHG lease’s area becomes the property of the State.
  • The GGS Act:
    • contains a detailed regime dealing with circumstances where a GHG authority overlaps with an exploration authority, a geothermal lease, a mining lease or a petroleum lease;
    • provides for general mandatory conditions for all GHG authorities, dealings with a GHG authority, lodgement of caveats and extinguishment of GHG interests;
    • contains requirements for entry onto private land and for the carrying out of both preliminary and certain advanced activities on that land, entry into of conduct and compensation agreements for certain advanced activities and resolution of disputes between GHJG authority holders and private land owners (including the jurisdiction of the Land Court);
    • empowers the Minister to require, from time to time, the holder of a GHG authority or a person who has applied for a GHG authority to give the State security for the authority or proposed authority. Security or part of security given for a GHG authority may be kept for 1 year after the GHG authority has ended; and
    • contains a regime for dealing with so called “serious situations” being a situation where a GHG stream injected into the reservoir has leaked, there is a significant risk that a GHG stream injected into the reservoir will leak from it or a GHG stream injected, being injected or to be injected into the reservoir has behaved or is behaving otherwise than as predicted in a relevant work program or development plan.

Western Australia

In terms of the Gorgon project noted above, CCS activity is regulated by the Barrow Island Act 2003 (WA). That Act ratifies, and authorises, the implementation of, an agreement between the State and the Gorgon joint venturers relating to a proposal to undertake offshore production of natural gas and other petroleum and a gas processing and infrastructure project on Barrow Island. That State agreement was entered into having regard to the need to minimise environmental disturbance on Barrow Island (which is a class A nature reserve) and to provide for the support of conservation programs relating to Barrow Island and other parts of the State.

The Act makes provision for inter alia enabling land on Barrow Island (but no more than 332 ha in total of uncleared land) to be used, under the Land Administration Act 1997, for gas processing project purposes and the conveyance and underground disposal of carbon dioxide recovered during gas processing on Barrow Island.

New South Wales

There is no specific legislation dealing with CCS. However, a number of initiatives are underway relating to CCS.

The NSW Government’s Mining, Exploration and Geoscience website notes the following developments:

  • The NSW Government, Commonwealth Government (under National Low Emission Coal Initiative (NLECI) funding) and Australian Coal Association Low Emission Technology Limited (ACALET) signed a funding agreement with Delta Electricity to initiate an assessment stage for the Delta Demonstration Project. The project was officially announced on 25th March 2010 and ceased in 2014. The aim of the Delta Carbon Capture and Storage Demonstration Project was to demonstrate the feasibility of Post Carbon Capture (PCC) technology in the NSW context. The website notes that “Overall, the results gathered from Stage 1 of the Delta Carbon Capture and Storage Demonstration Project have proved crucial to understanding the many complex planning requirements of enabling PCC technology in the NSW context”.
  • Coal Innovation NSW (CINSW) is coordinating the NSW CO2 Storage Assessment Project which aims to ‘make NSW CO2 storage ready’. To achieve this, CINSW is exploring regional NSW to identify safe and secure sites for potential geological storage of CO2. Compared to most other states in Australia, NSW's deep sedimentary basins are virtually unexplored. To address this knowledge gap, CINSW, through the NSW CO2 Storage Assessment Project, is undertaking a state-wide assessment to identify potential storage opportunities in NSW. The Carbon Storage Taskforce identified the Darling Basin and Sydney Basin as national priorities for exploration in 2009. In terms of work to date:
    • In Stage 1A, four stratigraphic wells were drilled in the Sydney Basin. Work was completed in 2012 and the wells showed limited CO2 storage potential, hence looking further west to the Darling Basin.
    • In Stage 1B, which commenced in 2014, two stratigraphic wells were drilled in the Darling Basin in western NSW, near Wilcannia. The Tiltagoonah-1 well is in the Nelyambo trough and the Mena Murtee-1 well is in the Pondie range trough. Data from the Mena Murtee-1 well in the Pondie Range trough indicated a potential storage site. Analysis and modelling of this area identified multiple porous sandstone reservoirs with the potential to store 555 million tonnes of CO2. This is equivalent to all NSW industrial emissions (non-electricity) created over a forty-year period;
    • Stage 2 aims to verify and build on the early results from the Darling Basin (stage 1B) and improve understanding of the stratigraphy, geological structure, reservoir and seal properties, and hydrogeology of the targeted sub-basins - Pondie Range and Poopelloe Lake troughs. The first part of the Stage 2 program is a low-impact seismic survey over four weeks from May 2021 (weather permitting). The survey will be carried out along approximately 200km of seismic lines north of Wilcannia.

South Australia

There is no specific legislation dealing with CCS.

However, in 2018, the SA Government published a paper entitled “South Australia’s Carbon Sequestration Strategy”. That document notes that the South Australian Government has made a co-investment of $5.3 million with research partners for new research into carbon project opportunities across South Australia. This includes the mapping and assessment of the carbon sequestration potential of coastal wetlands and seagrass habitats, soil carbon and valuing the co-benefits of carbon projects.

The Department of for Energy and Mining – Energy Resources’ website notes that:

  • South Australia has a large endowment of onshore storage reservoirs suitable for CCS, particularly in the depleted oil and gas fields of the Cooper and Otway basins;
  • CCS gives South Australia the opportunity to create a new industrial ‘hub’ for competitive abatement of emissions – especially in sectors with difficult to abate process emissions such as cement, steel and iron manufacturing; natural gas processing; and biofuel production. Furthermore, CCS can also enable new technologies such as low carbon hydrogen production from natural gas, enhanced oil recovery and direct air carbon capture and storage; and
  • the Department is involved in the development and implementation of policies, international standards, and leading practice regulation to facilitate CCS projects. One of these projects is that proposed by Santos for CCS at Moomba (as noted above).

Tasmania, Australian Capital Territory and Northern Territory

Again, there is no specific legislation dealing with CCS in any of these jurisdictions.

In Tasmania, Climate Action 21 set the Tasmanian Government’s agenda for action on climate change through to 2021 and is due to conclude in June 2021. The Tasmanian Climate Change Office is currently developing Tasmania’s next whole-of-government action plan, which will build on the themes and actions from Climate Action 21.

The ACT has published its ACT Climate Change Strategy 2019 - 2025 and the NT has published its Norther Territory Climate Change Response: Towards 2050 but neither document contains any CCS initiatives (other than carbon farming being and the promotion of carbon sequestration (or storage) from plants and soils).