Australia's Energy Commodity Resources 2024 Carbon capture and storage

Enabling regulatory framework

Over the past two years, there has been considerable activity with respect to the legislative and regulatory frameworks that govern CCS in Australia.

Offshore CCS projects in Commonwealth waters are conducted under the Offshore Petroleum and Greenhouse Gas Storage (OPGGS) Act 2006, the Environment Protection (Sea Dumping) Act 1981 and the Environment Protection and Biodiversity Conservation Act 1999 (the regulatory frameworks and approvals governing offshore CCS projects are described in Australian Government 2023 guidance document). An Australian Government review of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2023, led by the Department of Industry, Science and Resources (DISR), is currently underway to examine and recommend improvements to the offshore environmental management regime.

Under the OPGGS Act, project proponents are able to nominate and bid for greenhouse gas acreage, which enables exploration for suitable geological storage formations and can ultimately lead to the granting of CO₂ injection licences.

Under the 2021 Offshore Greenhouse Gas Storage Acreage Release, five permits were awarded for greenhouse gas storage exploration offshore the Northern Territory (Bonaparte Basin) and Western Australia (Browse and Northern Carnarvon Basins; DISR, 2022; King, 2022; Figure 7.2). Indicative exploration expenditure associated with the work programs for these five areas totals A$399.3 million (NOPTA, 2024a).

In 2023, a further 10 areas were released for bidding to explore for greenhouse gas storage opportunities in the Bonaparte, Browse, Northern Carnarvon, Perth, Otway, Bass and Gippsland basins located offshore Western Australia, Victoria, and Tasmania (Figure 7.2; DISR, 2023). As of June 2024, a decision on these greenhouse gas storage exploration permits is pending.

A Sea Dumping Permit is required for offshore injection and geological storage of CO₂ (Department of Climate Change, Energy, the Environment and Water [DCCEEW], 2024)

Onshore projects are governed under equivalent state or territory legislation. South Australia, Victoria, and Queensland have had enabling legislative frameworks in place for a number of years, while in May 2024, the Western Australian Parliament passed the Petroleum Legislation Amendment Bill 2023 that enables the transport and storage of greenhouse gases as well as exploration for naturally-occurring hydrogen.

In November 2023, the Amendment (Using New Technologies to Fight Climate Change) to the Environment Protection (Sea Dumping) Act 1981 came into force, providing a framework that enables the transboundary movement (international import or export) of CO₂ for the purpose of sub-seabed geological storage. The Act gives effect to Australia’s international obligations under the 2009 amendment to the London Protocol (1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter).

In May 2024 the Australian Government released the Future Gas Strategy, which recognises the need for natural gas beyond 2050 in Australia (DISR, 2024). The strategy also underlines the increasing role for CCS in Australia with respect to decarbonising natural gas operations and the hard-to-abate industrial sector.

CCS Projects

There are currently 16 geological storage projects in various stages of development across Australia, mostly located in the Commonwealth jurisdiction (Table 7.1, Figure 7.2), offshore Northern Territory, Western Australia and Victoria, and onshore in South Australian and Queensland. Both saline aquifers and depleted fields are targeted for storage.

The majority of Australia’s currently announced CO₂ storage projects are associated with the production of natural gas/LNG. Natural gas can contain significant (>10%) concentrations of CO₂. Common practice has been to separate the CO₂ from the natural gas stream and vent it to the atmosphere. However, venting practices are becoming less acceptable, due to concerns about increasing CO₂ emissions to the atmosphere, and as emission reduction requirements under legislation such as the Safeguard Mechanism come into effect (DCCEEW, 2023). Australian CO₂ storage projects in development  also include those linked with hydrogen and ammonia production, industrial emission sources, enhanced oil recovery, and direct air capture.

The Gorgon CCS project on Barrow Island, Western Australia, is Australia’s first, and currently only, operating commercial-scale CCS project. The CO₂ associated with natural gas from the Gorgon and Jansz-Io fields is captured and stored in the Upper Jurassic Dupuy Formation in the Barrow Sub-basin, around 2,000 m beneath Barrow Island. The project has stored in excess of 9 Mt of CO₂ between the commencement of injection in August 2019 and December 2023, and is expected to store more than 100 Mt of CO₂ during its 40-year plus lifetime (Chevron, 2024). Other projects are advancing across the country. Construction at Santos’ Moomba CCS facility in the Cooper Basin, South Australia, is 80% complete (as of February 2024) with injection expected to begin in 2024 (Santos, 2024a, 2024b). A number of other projects are progressing through the relevant regulatory approvals processes.

There is an increasing focus on the development of CCS hubs based on or in addition to CO₂ storage projects associated with LNG production that will enable geological storage of emissions from hydrogen and ammonia production as well as from industrial and hard-to-abate facilities. Examples of these are the Northern Territory Low Emissions Hub, Pilot Energy’s Mid West Clean Development Hub, and the CarbonNet CCS hub in Victoria. DeepC Store are developing Australia’s first multi-user floating CO₂ injection and storage hub, which will be located offshore in northern and western Australia and store between 1.5–7.5 Mt CO₂ per year (DeepC Store, 2023). The passage of the 2023 amendment to the Environment Protection (Sea Dumping) Act (1981) to enable transboundary movement of CO₂ for the purpose of sub-seabed storage is also generating interest from both potentially CO₂-exporting countries and developers of Australian geological storage facilities. For example, Santos have put in place agreements with international energy companies to investigate the feasibility of storing third party CO₂ via the Moomba CCS Project (Santos, 2023a, 2024b).

Direct removal of CO₂ from the atmosphere is of growing interest to abate historical CO₂ emissions and those emissions that cannot be captured or easily abated (e.g. from agricultural use or dispersed transport emissions). AspiraDAC is an example of a demonstration direct air capture and storage project that will use renewable energy to power modular direct air capture units to capture 1 tCO₂ per day for at least one year (AspiraDAC, 2023). The captured CO₂ will be stored at a nearby CCS storage site in the Cooper Basin. This is a first-of-a-kind demonstration of direct air capture with CO₂ storage for Australia.

In addition to CO₂ storage, a number of projects are seeking to capture CO₂ from manufacturing or industrial processes, either for permanent storage or for use in creating new products such as low carbon cement and synthetic fuels.

Australia’s geological storage resources

Australia has an enormous theoretical capacity for geological storage of CO₂ in saline aquifers and depleted fields. The Oil and Gas Climate initiative (2022) applied the technically-based CO₂ Storage Management System (the SRMS; SPE, 2017) to produce a catalogue of global CO₂ storage resources and their maturity (Figure 7.3), which estimates that Australia has approximately 31 Gt of sub-commercial storage capacity and 470 Gt in undiscovered storage resources. Much of this storage resource is found in the sedimentary basins offshore Victoria (Gippsland Basin), Western Australia (Browse, Perth, Northern Carnarvon basins) and Northern Territory (Bonaparte Basin), and onshore in South Australia (Cooper-Eromanga Basin) and Queensland (Surat Basin).