Growing speculation net zero will be reached through incentives, not penalties

A new multimillion-dollar grant program to boost new carbon capture and storage technologies in a sign that incentives rather than taxes and penalties will be the Morrison Government’s path to reach net zero by 2050.

Carbon capture and storage will be “turbocharged” under a $250 million investment in the emissions reducing technology, as speculation grows among some government MPs that sweeteners, not penalties, will be used to get Australia to net zero.

Prime Minister Scott Morrison is wrangling his colleagues to come to a position on net zero before the international COP26 climate summit in Glasgow at the end of October.

There remains resistance in the Coalition, particularly in the National party, over committing to net zero emissions despite an announcement expected before the summit.

Treasurer Josh Frydenberg says reaching net zero should not be seen as a “binary choice” between city and regional electorates. Picture: NCA NewsWire / Andrew Henshaw

Treasurer Josh Frydenberg attempted to ease tensions on Wednesday, saying that the climate debate should not be seen as a “binary choice” between city electorates and regional ones.

Energy and Emissions Reductions Minister Angus Taylor has been speaking to backbench MPs as the government finalises its position and any plan on how to reach net zero ahead of COP26.

Some government MPs have speculated the plan is likely to be focused on incentives for sectors to reduce emissions, rather than penalties with a guarantee there will be no need for taxes.

But it is understood the government is still finalising the details of the plan, but a long-term strategy will be released before the summit.

Meanwhile, Mr Taylor will on Thursday announce a $250m grant program targeted at driving down the cost of carbon capture and storage technology.

Energy and Emissions Reduction Minister Angus Taylor will announce new grants to fast track developing carbon capture and storage technology. Picture: NCA NewsWire / Gary Ramage

The technology is attached to either manufacturing plants or coal and gas power stations to capture their emissions and store them underground.

Projects supported under the grant will have to be “fully operational by 2029”.

“The projects supported by the CCUS Hubs and Technologies Program will boost delivery of long-term emissions reductions while generating new jobs across the country, particularly for regional Australia,” Mr Taylor said.

The program will have two streams with $150 million to the research, development and commercialisation of carbon capture technologies and identify storage sites.

The maximum amount of funding available for a single project under this stream is $30 million.

Another $100 million will go to the design and construction of carbon capture hubs, with shared infrastructure between multiple sources of emissions.

The maximum grant under this stream is $50 million for one project.