THE Morrison government's plan to allow Australia's renewable energy agency to invest in non-renewable technologies has been shot down in the Senate.
The Coalition wanted to expand the remit of an agency known as ARENA to allow it to invest in low-emissions projects such as carbon capture and storage, green steel and hydrogen.
But the Greens, Labor and crossbench senators teamed up to veto the changes, winning a vote on Tuesday night after One Nation leader Pauline Hanson did not appear in the chamber, handing the opposition what Hunter Labor MP Joel Fitzgibbon described yesterday as "an unintended victory".
Greens leader Adam Bandt said the vote was "a really big win for the climate and it's a huge blow to this coal and gas-fired government".
But Mr Fitzgibbon - who continues to criticise Labor's energy policies - said stopping ARENA from investing in carbon capture use and storage (CCUS) technologies was "ideological craziness".
"It will take more than wind turbines and solar panels to create a cleaner economy," Mr Fitzgibbon said.
"We need a broad mix of technologies including carbon capture and storage, and those which reduce vehicle emissions. We should never vote against more money to do more things, regardless of the agency being used to spend the money."
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The Coalition has been viewed as moving closer to the political centre on energy, with Scott Morrison's "preference" for "net zero emissions by 2050" - a position he took to Europe earlier this month as an observer at the G7 forum.
Such a stance, however, caused alarm inside the Liberal Party's Coalition partners, the Nationals, who are expected to harden their opposition to the trend with the return of Barnaby Joyce as Nationals leader and Deputy Prime Minister.
Speaking on radio 2GB yesterday morning, Mr Fitzgibbon said Labor was "now opposing $1.2 billion worth of public investment in carbon reducing innovation simply because we don't like the entities being used to spend the additional money".
Mr Fitzgibbon said the vote showed Labor did not support CCUS.
"And if people are serious about getting global emissions down, you, they should be embracing the idea of taking the carbon out of the fossil fuel process and burying it in the ground," Mr Fitzgibbon told Ray Hadley.
"Just to give one example, some of the $194 million that was going into ARENA, or should have gone into ARENA, if it were not for last night, was going to be used to roll out every electric vehicle charging stations in the regions, obviously, where the population is sparse.
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"It's less economical to roll out these expensive charging stations. And of course, that opportunity is now passed us all because that money won't be available.
"But the idea of putting more money into efficiency so our heavy vehicles give out less emissions and some of our industry give out less emission is a good thing for regional Australia. it creates economic activity.
"I'd understand the argument of others, if we were going to use money already in ARENA to do these things, but the government was proposing to put more money into it.
"We're not displacing windmills and solar panels. We're going to do those too. But we you know, people were hopeful we might do some new things as well."
Mineral Carbonation International (MCi) - an Orica-backed venture operating out of the University of Newcastle's Newcastle Institute for Energy and Resources (NIER) - was announced earlier this month as the recipient of a $14.6 million grant to build a carbon capture and storage demonstration plant on Kooragang Island.
The company said yesterday that its grant came from a special-purpose CCCUS Development Fund and was not affected. Governor-General David Hurley is scheduled to inspect MCi tomorrow.
Meanwhile, the Nationals are planning to pay farmers to cut their greenhouse gas emissions as part of a deal on climate change.
Mr Joyce will take the proposal to the prime minister as part of negotiations on committing to net zero emissions by 2050.
The Nationals argue farmers have carried the cost of previous climate targets and need compensation for stronger action.
"If there is to be any move towards it (net zero) then farmers should be part of the solution," Nationals deputy leader David Littleproud said.
"They shouldn't be penalised like they have been in the past, where they have footed the bill for the country's social conscience, and we just simply say that it's time to square the ledger."
Nationals senator Bridget McKenzie has also spoken out ahead of negotiations between the coalition partners.
"If the world is in fact moving toward a net zero future, Australia needs to ensure the rules and the methodologies that underpin it are fair, enforceable, agreed to by everyone and importantly in our national interest," she said.
"We must be clear to ourselves as to what those objectives are before entering such negotiations.
"Failing to do so risks sleepwalking Australia into an international agreement that favours rich industrialised nations that already have the competitive advantage of established low-emission technologies such as nuclear power."
Senior members of the Morrison government have reportedly considered taking a proposal for nuclear power to the next election.
The Australian reports the political and policy implications of a nuclear industry were weighed up by members of cabinet. Lifting the moratorium on nuclear energy in a bid to cut greenhouse gas emissions and ease reliance on fossil fuels was central to their discussions.
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