Prime Minister Scott Morrison announced on Wednesday that Australia will create a A$1 billion ($740 million) fund to invest in companies developing low-emissions technologies as part of the country’s goal of reaching net zero carbon emissions by 2050.
The idea calls for the federal government to contribute A$500 million to the fund, which would be matched by private investors. The money will be used to help start-up companies develop technology such as carbon capture and storage.
“Our plan to reach net zero by 2050 is an Australian one that’s focused on technology not taxes and this fund backs Australian companies to find new solutions,” Morrison said in a statement.
The plan comes just months before a national election in which climate policies are expected to be a hot topic, with strong public support for lowering emissions despite concerns about economic costs.
The federal government will need to adopt new laws to allow the government-owned green bank, the Clean Energy Finance Corp, to fund carbon capture and storage, which is now prohibited under its rules.
The plan will be considered by the opposition Labor Party, which opposes diverting renewable energy subsidies to carbon capture and storage (CCS).
The government, on the other hand, is attempting to “kill (Clean Energy Finance)” by pushing it to fund “unproven, uneconomic carbon capture and storage projects,” according to the Smart Energy Council.
CCS captures emissions and burys them beneath the ground. While supporters see the technique as a key to unlocking large-scale, cost-effective hydrogen generation, detractors argue that it would just extend the life of polluting fossil fuels.
“To stay in power, the coalition has realised they need a better package of climate policies,” Haydon Manning, a political science professor at Flinders University in South Australia, said.
Morrison announced last month that Australia will achieve net zero emissions by 2050, but that Canberra would not enact legislation forcing emitters to limit their carbon production, assuaging regional fears of job losses.
Australia is strongly reliant on coal and gas exports, and prior attempts by governments to pass legislation to decrease carbon emissions have failed, with two prime ministers being deposed by their own parties.