Expanding ARENA’s Mandate
There has been a second attempt by the Government to expand the mandate of ARENA to include technologies powered by fossil-fuels on 3 August. The first attempt failed in June after it was disallowed in the Senate by Labor, Greens and other crossbenchers.
The energy and emissions reduction minister, Angus Taylor, wants to expand ARENA’s mandate to fund five priority areas: carbon capture and storage (CCS), energy storage, hydrogen, soil carbon and low-emissions steel and aluminum. Additionally, ARENA would be able to issue grants for projects announced in the May budget, including heavy transport and industrial energy efficiency.1
Gaining Approval in the Senate
Dissent for the broadened remit of ARENA focused on one key argument: that a renewable energy agency should not fund CCS or fossil fuels, but rather focus on renewable energies. However, Labor has now critically stated that they will only partially oppose the second attempt.
Taylor has rewritten the plan, closely linking the changes to the Government’s low-emissions technology investment roadmap. Labor will attempt to only strike out Section 7, relating to funding for CCS and hydrogen generated by fossil-fields. The Greens share a similar position.2
If the changes pass through the Senate, as it is looking increasingly likely, there may be additional legal challenges. Following Taylor’s first attempt, a committee found that the changes may have been illegal as they went beyond the scope parliament intended when it created ARENA. Additionally, industry leaders such as the Smart Energy Council have previously noted that they would initiate court proceedings if the changes were allowed.3
As noted in our previous article, additional funding is required if ARENA’s mandate is to be broadened. At its current levels, funding is already inadequate for ARENA’s present remit. The changes are welcome, but they are not feasible. If ARENA is to support technologies that can reduce emissions in all sectors of the economy, it requires both increased and directed funding. Without this, even with ARENA’s broadened mandate, Australia cannot ensure new low emissions technologies are brought to economic parity.
Veno Panicker is the lead Construction and Infrastructure partner within Hamilton Locke’s Energy Infrastructure and Resources team and has a strong track record in EPC contracting and the delivery of EPC projects across Australasia, including adjudication, litigation and arbitration.
Tina Sharma is a paralegal specialising in Construction and Infrastructure within Hamilton Locke’s Energy Infrastructure and Resources team.