**Check against delivery
Minister Ferguson has addressed the International Energy Agency ministerial meeting in Paris on global developments in carbon capture and storage technology
Good morning ladies and gentlemen.
For Australia, responding to climate change and maintaining energy security are two sides of the same coin.
It is our view that any response to climate change which does not recognise the energy aspirations of emerging economies is destined to fail.
Demand for coal worldwide has been growing faster than any other energy source.
Carbon capture and storage has a critically important role to play in the energy mix to help reduce greenhouse gas emissions from the energy sector.
This is important for IEA members as well as developing countries - particularly China, with its volume of coal production now exceeding that of all IEA member countries combined.
CCS will only make sense in countries like India and China if it works on an industrial scale, adding to economic growth not subtracting from it.
We know CCS can work. Now we need to make it commercially viable on an industrial scale.
An integrated industrial-scale model for CCS is yet to be demonstrated in any sector other than oil and gas production.
As the IEA Scorecard 2009 identifies, 42% of electricity globally was produced using coal in 2007, up from 37% in 1974. This highlights the importance and challenge of deploying CCS in our coal-fired power fleet.
With an electricity generation sector heavily reliant on coal and as the world's largest exporter of coal and a significant producer of LNG, Australia has much to gain from CCS.
Like many of you here today, the Australian Government prides itself on being a leader in CCS:
- We have the most comprehensive CCS regulatory framework in the world
- We have released the world's first CO2 storage acreage for competitive exploration bids
- We are working with developing countries on a range of practical project work
- We are supporting ground-breaking CCS projects in Australia with billions of dollars in funding; and
- We have funded the Global CCS Institute to act as an independent broker to accelerate uptake of CCS.
By themselves, these efforts - which are matched in other countries - are not enough to accelerate commercial deployment at the rate we need.
As Nick Otter from the Global CCS Institute presented in London earlier this week, the Institute has undertaken a comprehensive audit to assess the status of CCS projects around the world.
This work has identified 275 CCS projects globally, of which 34 have been completed and a further 213 remain active or planned.
There are 101 commercial scale projects identified, with 62 of these considered to be integrated projects, involving capture, transport and storage. Seven of these are in operation.
There are 55 planned integrated projects at a commercial scale with nominated start dates between 2009 and 2020.
The GCCSI work also identified the challenges and difficulty in progressing these projects to the operational phase.
The task ahead for CCS is not easy. Just like the task ahead with regards to deployment of renewables is also challenging.
Last month Australia launched the first commercial scale project since the G8's call for 20 large-scale CCS demonstration projects by 2020.
The Gorgon LNG project will inject 120 million tonnes of CO2 over the life of the project. Australian Governments have agreed to accept any long term liability arising from the long term storage of C02.
Above all, governments can help industry manage risk:
- Financial risks, where governments can reduce the exposure for investors or increase returns
- Technical risks, where governments can recognise the risk of deploying untested technology
- Exploration risks, where governments can help the CCS industry get the same offset benefits as others
- Community risks, where governments can make a strong case for local acceptance of CCS projects
- And regulatory risks, where, among other things, governments can take the lead on liability for sequestered carbon.
Conclusion
Carbon capture and storage will be a critical component in the global response to reduce greenhouse gas emissions from the energy sector.
Given the size of the task, there is a need for Governments and industry to collaborate and work towards the rapid commercial deployment of CCS to ensure the prosperity of generations to come.
Working together, I'm confident we will succeed.
Thank you