Regulation of the Australian carbon capture and storage industry

Abstract

Australia has an emerging carbon capture and storage (CCS) industry, which is developing in support of Australia’s Climate Change Act 2022, Safeguard Mechanism and corporate climate goals. In order for the CCS industry to grow at the rate required to support these requirements, project risks need to be reduced to allow prompt CCS project sanction. However uncertainty exists within the CCS regulatory framework. There are various factors causing this uncertainty, including: Changing regulatory requirements, such as the Safeguard Mechanism; lack of guidelines for some approvals, including Site Closure; and legislation untested on CCS, particularly in key regulatory instruments such as Site Closure, Environment Plans and Safety Cases. The uncertainty these issues create adds to the lack of confidence within industry and investors to progress CCS projects at the rate and scale needed to abate emissions required to meet Australia’s climate goals.