Santos Ltd. plans to begin the application process to register its proposed $210 million (Aus.) carbon capture storage (CCS) project at Moomba in northeast South Australia following the government’s release of its Emissions Reduction Fund (ERF), which came into effect Sept. 29.
The ERF will credit abatement of carbon dioxide emissions by awarding large-scale CCS projects with tradeable Australian Carbon Credit Units (ACCU).
Each ACCU earned represents one tonne of carbon emissions avoided. Projects can sell ACCUs to the government at bi-annual auctions or on the private voluntary market.
Minister for Energy and Emissions Reduction, Angus Taylor, said the program will incentivize emissions reductions from energy-intensive sectors including LNG production, which currently accounts for 10% of Australia’s emissions.
To qualify, all relevant infrastructure within a project, including capture facilities, pipelines, and storage sites, must be in Australia.
Most emissions avoidance schemes have a credit period of 7 years, but the new ERF method allows qualified CCS projects a crediting period of 25 years, a move that recognizes the large up-front and ongoing costs of the project as well as the fact that they are unlikely to generate any revenue except ACCUs, Taylor said.
Moomba will have the capacity to capture and store 1.7 million tonnes/year (tpy) of CO2 in phase one of its development program. Later phases will boost capacity to 20 million tpy.
Kevin Gallagher, chief executive officer of Santos, said that when the Moomba project has been registered under the new ERF, the company will be in a position to make a final investment decision.
