Samantha McCulloch
Shortly after arriving back in Australia last year, I visited a globally significant place many Australians may never have heard of.
Barrow Island, off Western Australia's North West Shelf, might not be as well-known as other places that have put Australia on the global map.
But it is a glimpse into a new growth industry that is critical to Australia reaching net zero.
The remote island is home to the world's largest CO2 storage site, at Chevron Australia's Gorgon LNG facility, which uses carbon capture, utilisation and storage (CCUS) technology to reduce emissions by permanently trapping CO2 in deep underground rock.
I was perhaps more excited than other visitors to Gorgon given I had just finished seven years at the International Energy Agency leading their work on CCUS technology and policy development.
There has been debate over the Gorgon CO2 injection project. The facts on the ground are that the project has stored over 7.5 million tonnes of CO2 since 2019 - more than one year's worth of the total emissions reductions required from all 215 facilities under the proposed Safeguard Mechanism reforms.
Over its 40+ years' life, Gorgon is expected to store 100 million tonnes of emissions.
CCUS is backed by authorities such as the CSIRO, the IEA and the Intergovernmental Panel on Climate Change (IPCC) as critical to getting to net zero by 2050 - reducing emissions from industrial facilities, kick-starting low carbon hydrogen and removing carbon directly from the atmosphere.
CCUS also has huge potential economic benefits including creating new jobs and securing jobs in existing heavy industries.
A growing number of countries have already realised the enormous potential of CCUS. According to Bloomberg, investment has doubled in the past year, and there are now around 300 commercial projects in development. Thirty projects are up and running.
Australia can ride this new global momentum.
The Australian Petroleum Production & Exploration Association (APPEA) has used its Federal Budget Submission to call for a national CCUS roadmap to provide policy direction, progress priority carbon management hubs and promote Australia as a regional CO2 storage leader.
Countries in the region with limited CO2 storage potential, such as Japan and Korea, are looking for partners to establish hubs to meet net zero commitments.
These countries are willing to invest in Australia - as seen by the recent announcement that the Japanese government will invest over $2 billion in low-carbon hydrogen production using carbon capture in Victoria.
Others like Malaysia and Indonesia are developing their own CO2 storage hubs. To keep pace with our neighbours, Canberra needs to send a clear signal that Australia is "open for business".
Australia has world class geological formations ready for CO2 storage.
Just look at the next chapter in the Australian CCUS story: Santos and Beach Energy joining forces in the South Australian outback where Santos has produced gas for over half a century. Their $220 million Moomba facility is expected to store 1.7 million tonnes of emissions annually.
More CCUS projects are emerging. ExxonMobil's Esso Australia is studying the potential for a South East Australia Carbon Capture Hub to store emissions from multiple industries in the Gippsland Basin.
INPEX has joined with Woodside Energy and TotalEnergies to assess the Bonaparte storage area off Darwin.
Today (SUBS: Mon) gas sector leaders will join Western Australia's Chief Scientist, global policy experts and state and federal government officials at a Future Energy Exports gathering in Perth to advance CCUS discussions.
The gas industry is well-placed to develop CCUS given our expertise in geological storage and large infrastructure projects.
Yet the beneficiaries go beyond gas and include other industries like steel, cement and chemical production where CCUS is one of few options for deep emissions cuts.
Natural gas with CCUS is by far the cheapest and most advanced pathway to low-carbon hydrogen today.
Under the IEA's Net Zero by 2050 scenario, over a quarter of low-carbon hydrogen production in 2050 will come from gas utilising CCUS.
The investment environment will be critical.
Almost two-thirds of planned investments globally are in the United States, Canada and Europe, where governments have fast-tracked CCUS with incentives.
Over the weekend, the UK announced a £20 billion investment in CCUS – a very different message to the $250 million cut in Australia's last Budget.
Australia has one of the most comprehensive national CCUS legal and regulatory frameworks globally, but gaps and inconsistencies between states may slow investment.
For example, WA and the Northern Territory don't have frameworks in place, although WA recently released draft legislation.
Furthermore, Australia still needs to join other nations in ratifying the London Protocol to facilitate the import and export of CO2.
The race is on and Australia must seize its competitive advantage on the path to net zero.
Samantha McCulloch is the Chief Executive of the Australian Petroleum Production & Exploration Association (APPEA)
