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The Australian Government is setting up a A$100 million ($120 million) global clean-coal institute to encourage companies such as BHP Billiton to establish low-emissions power projects that will help tackle global warming.
Prime Minister Kevin Rudd, who ratified the Kyoto Protocol on his first day in office and
wants to cut emissions 60 per cent by 2050, announced the plan in Canberra yesterday.
"Our intention with these projects is to reduce greenhouse gas emissions," said Rudd. "This is an important area to achieve real results."
The Government wants to promote projects that use new technology to help reduce emissions of carbon dioxide and other gases blamed for global warming.
The institute will promote the development of clean-coal ventures and help them raise funds, Rudd said.
Resources and Energy Minister Martin Ferguson said BHP and the Rio Tinto Group back the initiative.
"BHP Billiton is very committed to the reduction of C02 in the atmosphere," chief executive Marius Kloppers said yesterday. "We believe the science is real, we believe it's highly necessary to stabilise C02."
Australia's upper-house Senate is expected to approve legislation allowing the country to set up storage sites off its coast to hold carbon captured during power production, Ferguson said.
The House of Representatives passed the legislation on Thursday.
Governments may take part in carbon-capture projects, said Rudd, who will brief the United Nations General Assembly on the institute in New York next week.
The aim is to have the institute operating by January, Rudd said. It will be based in Australia, but the location is still to be decided.
CARBON-CAPTURE POWER PLANT SCRAPPED
Santos and General Electric's energy unit has scrapped plans for a A$445 million ($534 million) low-emissions power generation project in Queensland after failing to agree on financing.
The venture, backed by BHP Billiton, was dropped after the Government said in early July that a A$75 million grant had been withdrawn because the partners had not been able to sort out financing, Christian Bennett, a spokesman for Adelaide-based Santos, Australia's third-biggest oil and gas producer, said yesterday.
Australia, the world's biggest coal exporter, is seeking to take a global lead in research and development into so-called clean-coal projects, involving the capture and storage of carbon emissions.
The Fairview project was to use coal seam methane to run a 100MW power plant, with the carbon dioxide emissions extracted and buried underground.
"It was just that difficulty around bringing the economics into line," Bennett said.
"We just haven't been able to move forward, and we have other storage options on our agenda including Moomba carbon storage, so we continue to focus on that."
Santos has proposed a $700 million carbon storage plant at Moomba in central Australia.
- BLOOMBERG