Australian government ups support for carbon capture and use project

The Australian government will provide an extra A$40m (£24m) to develop the nation's first carbon capture and use project, energy and resources minister Martin Ferguson said in a speech late yesterday.

The Calera project in the state of Victoria plans to capture carbon dioxide from the Yallourn power station and use it to make solid calcium, magnesium carbonate and bicarbonate minerals – a type of cement that can be used in construction.

Calera Corp, the California-based carbon capture technology specialist working on the project, is to provide more than A$3.5m towards the pilot installation, while the federal government and Victoria state government have already each said they would provide A$3.5m for the project. But the federal government has now confirmed it will dip into its A$400m National Low Emissions Coal Initiative fund to significantly increase its backing for the demonstration project.

"The Calera project is very exciting and will allow us to test the world's first carbonation process on brown coal to produce useful building materials and reduce CO2 emissions from an existing coal-fired power station at the same time, " Ferguson said.

He added that while geological storage will ultimately be required for larger-scale carbon capture systems, carbon capture and use projects could play a key role in helping power stations and other industries to offset the cost of installing capture technology.

The government said the project would also reduce the volume of ash waste water from coal combustion going into the ocean and limit the amount of ash that is buried in landfill.

However, the full state funding will only be forthcoming if feasibility studies and a pilot plant prove successful.

Welcoming the announcement, Victorian energy and resources minister Peter Batchelor said the funding demonstrated both governments' commitment to reducing greenhouse gas emissions.

"Making low emissions coal technologies viable and sustainable ensures Australia's energy security, viability and competitiveness are maintained in a more environmentally sustainable way," he said.

Developing carbon capture technology is widely regarded as vital to Australia's chances of cutting greenhouse gas emissions as about 75 per cent of the nation's electricity is generated using coal, chiefly carbon-intensive, low-rank brown coal.

The timing of the additional funding announcement appears designed to bolster the government's low-carbon credentials after prime minister Kevin Rudd yesterday confirmed he would shelve his proposed carbon trading scheme until 2013 at the earliest.

His administration was facing a third defeat in the senate on the plan, which has been consistently blocked by the opposition Liberal party.