Reputex executive director Hugh Grossman said that while the electricity sector had seen record investment in renewable energy, the industrial sector has been “largely missing” from the emissions reduction challenge.
He noted that the federal government’s own emissions projections in December point to emissions in 2030 down 16 per cent from 2005, at 611 million tonnes. That’s 60 million tonnes short of the minimum 26 per cent reduction target, which requires emissions to be down at 452 million tonnes.
But writing in The Australian Financial Review today, federal Minister for Energy and Emissions Reduction Angus Taylor said Australia was on track to “meet and beat” its Paris commitments.
“With emission reductions of nearly 13 per cent since 2005 we strongly outperform comparable commodity-exporting developed countries like New Zealand [up 4 per cent] and Canada [down only 2 per cent] and there is no comparison with China [up 67 per cent] and India [up 77 per cent],” Mr Taylor writes.
“Projections from December have us on track to meet and beat our 2030 targets, driven by the $3.5 billion Climate Solutions Package,” Mr Taylor says, referring to the controversial contribution from “over-delivery” on the country’s Kyoto target.
The minister has previously said Australia would only use so-called Kyoto “carry-over credits” to reach their 2030 targets as a last resort, but writes: “We don’t expect early repayment of a mortgage to be pocketed by banks, nor should we expect over-delivery to be ignored.”
Still, Mr Grossman said the use of Kyoto credits “papers over emissions increases in the industry sector”.
“Carry-over credits may help us to meet an accounting target, but it creates a false reality given the conflict between emission growth and any future net zero target,” he said.
Reputex found that the strong growth in emissions from industry conflicts with Australia’s long-term decarbonisation commitments under the Paris accord, which include a net zero target by 2050.
It describes the industrial emissions growth as “the elephant in the room” for Australian legislators as they consider a new long-term emissions reduction target ahead of November’s UN climate summit in Glasgow.
Mr Grossman said the problem with the emissions mechanism covering industry sectors, known as the Safeguard Mechanism, was that the baseline for emissions could be adjusted in line with reported production. That gives Australia’s largest companies a green light to grow their emissions without limit.
In the LNG sector, that has allowed a huge increase in emissions in line with the several hundred billion dollars invested in new plants across Western Australia, the Northern Territory and Queensland.
LNG producers argue that their product helps reduce emissions in overseas markets by replacing more carbon-intensive fuels such as coal.
Still, Mr Taylor said the deployment of new technologies would help all sectors of the Australian economy reduce emissions.
“The answer is not a new tax or more bureaucracy but practical change driven by science and technology,” he writes.
The Morrison government will release a Technology Investment Roadmap sometime this year.
A sharp drop expected in emissions from Australia’s LNG sector this year is due to the start-up in 2019 of a carbon sequestration project at Chevron’s Gorgon plant off the WA coast, although they are projected to start rising again later this decade as more new capacity comes online.
Separately, the International Energy Agency offered a more optimistic view about emissions from energy, noting that global emissions were flat at 33 billion tonnes last year, even as the world economy expanded by 2.9 per cent.
The plateauing in emissions from 2019’s record level was mostly due to the expansion of renewable energy in advanced economies, fuel switching from coal to gas, and higher nuclear power generation.