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Upstream Body Proposes Net Zero Zones Across Australia



By Tom Major

May 16, 2023Australia could capture and store more than 90pc of "safeguard mechanism emissions" by having net zero zones at major industrial sites, according to a report backed by the country's oil and gas lobby group.

Australia's safeguard mechanism applies to 215 facilities emitting more than 100,000 t/yr of CO2 equivalent scope 1 emissions. The Commonwealth Scientific and Industrial Research Organisation report, commissioned by oil and gas industry association Australian Petroleum Production and Exploration Association (APPEA), showed that setting up nine net zero zones in the main emitting areas of Australia would cover 92pc of greenhouse gas (GHG) emissions from companies operating under the safeguard mechanism.

"The nine zones – based around existing resources, industrial and manufacturing regions – could be established with shared infrastructure for natural gas, renewables, carbon capture utilisation and storage technology and low-carbon hydrogen production," according to the report released on 15 May.

Areas covered by the concept report include the Sydney-Newcastle coal mining and power generating region of New South Wales, the Pilbara mining and LNG area of Western Australia, and central Queensland's coal and LNG areas.

The report envisages collaboration between government, industry sectors and jurisdictions to improve emissions outcomes and tackle GHG output.

Looking to the UK's Net Zero Teesside plan for inspiration, the report suggests a cluster network of industrial users near carbon capture and storage (CCS) sites as a model for decarbonisation hubs. The UK government is backing eight such zones, but the projects face problems over timing and coordination. Norway is a CCS leader with 5mn t/yr of storage capacity developed, while the US is offering producers tax credits to incorporate CCS as part of its emission-reduction strategy.

But the Australian government remains sceptical of CCS as a concept, slashing the previous conservative administration's funding for the technology. The government is under increasing pressure from pro-environment crossbenchers, including the politically influential Australian Greens party which backs a moratorium on new gas and coal projects, while independent gas company Chevron's Gorgon CCS facility has failed to meet expectations.

APPEA is holding a three-day conference in the South Australian capital of Adelaide from 15-18 May. The conference is expected to focus on CCS and hydrogen use as the gas sector negotiates with the federal government over a new national gas strategy. Gas producers have been hit with several market interventions including domestic price caps, in the wake of the newly elected government's pledge to bring down energy costs for households and business.