Yahoo News Labor says it wants to stop Coalition turning green bank into fossil fuel 'slush fund'
Labor says it will vote against a proposal from the Morrison government to explicitly open up the taxpayer-owned green bank to fossil fuel investments if its planned amendments fail.
As part of its much-vaunted gas-led recovery from the Covid-19 pandemic, and its initiative to establish a fund to invest in grid reliability, the government wants to redefine gas-fired power as low-emissions technology. The aim is to enable the Clean Energy Finance Corporation to make investments in grid infrastructure.
The Labor caucus on Tuesday signed off on three amendments to that proposal, with the first rejecting the proposed definition of gas. The second amendment would remove a non-disallowable ministerial power permitting the energy minister to advise the CEFC to look at investing in particular technologies.
The third amendment would remove a proposal from the government that investments made through the grid reliability fund do not have to generate a rate of return. Currently CEFC investments do have to generate a rate of return.
If the government rejects the amendments, Labor will oppose the bill, and the Senate crossbench will determine its fate.
The shadow climate change and energy minister, Mark Butler, told Guardian Australia Labor supported the expansion of the CEFC to help deliver a modern electricity grid, “but not for gas generation investments that are neither a new technology, nor meet the existing CEFC definition of low-emissions technology”.
“This is the clean energy financing body – not for new gas generation,” he said.
Butler said it was important to safeguard the “financial integrity of the CEFC, to ensure it retains strict safeguards which ensure it only invests in economically viable projects”.
He said Labor would also attempt to prevent the energy minister, Angus Taylor, from turning the CEFC into a “slush fund” for fossil fuel projects.
Related: 'Orwellian': Coalition accused of planning to open green bank to fossil fuel investments
The CEFC was created in 2012 under a deal between Labor, the Greens and independents with a mandate to invest in renewable energy, low-emissions technology and energy-efficiency projects that would deliver a return.
Introducing the legislation to create it in 2012, the then climate change minister, Greg Combet, said gas may “technically be eligible for funding as a low-emissions technology” but was not expected to win backing as it had a track record in getting financed.
Taylor said Butler was wrong to claimed that gas generation investments did not meet the existing definition of a low-emissions technology, and that the CEFC would be required to deliver a return from the grid reliability fund. Under the proposed changes, the fund would have to deliver a return but each individual project would not.
The president of the Business Council of Australia, Tim Reed, called on the government to abandon its plan to underwrite new electricity developments through a program that would be administered by the new reliability fund.
The long-promised underwriting program for new electricity generation was announced before last year’s federal election, when the government released a shortlist of 12 projects being considered – six renewable energy, five gas and one coal.
Speaking at an Australia Israel Chamber of Commerce event on accelerating a clean economy, Reed said the government should avoid distorting the energy markets by underwriting some players as it would deter other companies. “That really makes it difficult for the large players in the market to commit to investment,” he said.
Reed said a draft low-emissions technology roadmap and a government-commissioned review of climate policies led by his business council predecessor, Grant King, were both steps forward, but urged the Coalition to commit to a national target of net zero emissions by 2050.
He said bipartisan support for that goal, which already has Labor’s support, would unlock “very, very large investment decisions”.
“If people know where you’re headed then it’s amazing the innovation and the creativity and the momentum you can build towards getting there,” he said. “It [the target] is daunting, but that’s how as a race, as a species, we’ve done amazing things. The government needs to commit to net zero 2050.”
The business council was one of 10 groups spanning industry, unions, the welfare sector and the environment to last week issue a joint statement urging federal and state governments to do far more to cut emissions, including setting a mid-century net-zero target, and prepare for worsening climate change impacts.
Reed, a tech industry veteran, said the CEFC and the Australian Renewable Energy Agency both had an important tole to play, and should have their remit expanded and long-term funding in place.
He repeated the business council’s call for the government not to use controversial “carryover credits” from the Kyoto protocol to help meet its 2030 target of a 26-28% cut below 2005 levels.
“If we paid bonuses to CEOs in 2030 based on results in 2016 I can’t imagine many investors would be happy,” he said. “We should be hitting those 2030 targets by the work that we’re doing now.”
