Australia Green Fund Asked to Back Coal in Latest Climate Riddle

A group of Australian legislators is pushing for a A$10 billion ($7.8 billion) national clean energy fund to be allowed to invest in coal or nuclear power, opening a fresh front in the country’s fractious emissions debate.

Members of the National Party, the junior partner in Australia’s governing coalition, are pressing to relax rules governing the state-owned Clean Energy Finance Corp. to enable it to potentially aid development of new coal-fired power stations, nuclear technology and carbon ­capture and storage projects.

It’s a proposal that underscores tensions in Australia about the continued role of fossil fuels and the pace of efforts to curb greenhouse-gas emissions. Prime Minister Scott Morrison has backed natural gas to spur the country’s recovery from a pandemic-induced recession, and been reluctant to commit to achieving emissions neutrality by 2050, setting the nation at odds with major trading partners including China, Japan and South Korea.

Morrison’s government had already proposed giving the CEFC greater ability to invest in natural gas-fired power generation under an initiative to improve grid reliability. National Party senators are seeking to extend that move to other sectors, and to reopen a debate over the role of nuclear power.

“Undue restrictions can only increase the cost of reducing emissions,” National Party senator Matt Canavan, a former national resources minister, said in a statement. “If climate change is such a threat, we should be looking at all options, including clean coal, carbon capture and nuclear.”

Both the Nationals and their Liberal partners see coal and natural gas as vital in securing rural electorates that have kept them in power since 2013. Nuclear power generation was banned in Australia in 1998 amid strong public sentiment against the power source, and in more recent discussions the prospect has been opposed on safety and cost grounds.

The CEFC declined to comment on the proposals to change its investment policies.

Read more: Australia Unveils ‘Gas-Fired’ Plan to Fuel Economic Revival

The CEFC, which has a mandate to help Australia curb emissions, is restricted from backing nuclear and carbon capture and is also constrained by policies that require it to support only low-emissions technology. It has previously invested in some gas-related projects.

Its current roster of projects includes solar farms to lithium mines and electric vehicle charging, while the fund in November committed A$125 million on work to improve grid infrastructure to support the Snowy 2.0 pumped hydro development.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.