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The Australian Federal Government will be establishing a $1 billion investment fund to develop low emissions technology including carbon capture as part of its effort to reach Net Zero by 2050.

“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,” Prime Minister Scott Morrison said in a statement.

The fund is set to combine $500 million of new capital for the Clean Energy Finance Corporation (CEFC) with $500 million from private sector investors.

It will provide venture capital investments instead of grants or loans to Australian start-ups and businesses with early-stage technologies that can be used to achieve emissions goals.

This can include renewable energy-powered direct air capture and storage of carbon dioxide, soil carbon measurement technologies, improvements to solar panels, and livestock feed innovations.

“Our investment will leverage 3-5x that amount in co-investment from the private sector and other levels of government, or between $84 billion and $126 billion in total investment by 2030,” said Minister for Industry, Energy and Emissions Reduction Angus Taylor.

Meanwhile, the Victorian Chamber of Commerce (VACC) has expressed its support of the Fund.

This fund will help bolster the automotive industry as we transition to a lower emissions future, in particular, by supporting new, innovative automotive businesses,” said VACC chief executive Geoff Gwilym.

However, new legislation will have to be passed for the additional funding since the CEFC, a government-owned green bank, is not allowed to fund carbon capture and storage under its existing rules.