SABRA LANE:

Just two days after the Prime Minister put clean coal-fired power stations back on the political agenda: and already the Government is signalling it's taking applications for new projects. The $5 billion Northern Australia Infrastructure Facility (NAIF) opened its doors last July. The fund is aimed at supporting new infrastructure programs in northern Australia through government concessional loans. Later today the Resources Minister, Matt Canavan, will announce the facility is now taking applications for clean coal electricity projects and that he's already had one interested party register their interest. I spoke to the Minister earlier as he boarded a plane out of Canberra.

SABRA LANE:

Minister, thanks for talking to AM. The Prime Minister is keen to advance clean coal and today you're announcing the $5 billion North Australia Infrastructure Fund is open for applications. Are you expecting many?

MATT CANAVAN:

Look, I've received some interest over the past week associated with our commitment to build base-load power stations, including to support clean coal options. It's also the case that a GHD report a couple of years ago indicated that clean coal-fired power stations could be commercially viable in north Queensland. Some might not realise that in north Queensland there is no base-load power station north of Rockhampton. And industrial consumers in north Queensland pay often up to double the prices in southern Queensland because of the cost of transporting the electricity to the north.

SABRA LANE:

Already a number of companies have said that they're not particularly interested in this kind of technology. AGL said it won't build or finance a new facility. Energy Australia says it's legacy technology. And another told the “Financial Review” it's got zero prospects of this stuff happening unless the Government puts its hand into its pocket. Why should taxpayers subsidise something like this, that the corporations don't want to fund themselves?

MATT CANAVAN:

Well, look, with all respect to those very eminent companies, we wouldn't take advice from Coles or Woolworths on whether we should allow Costco, for example, to come into the Australian market. I'm not surprised that existing generators don't want another large-scale base-load power station to come into the market, particularly in an area like north Queensland, where they're clearly making good money selling electricity now at very high prices. Good luck to them and good luck to them in the market. But what I'm about is the national interest and what I'm about is making sure that households and businesses can have access to cheap and affordable power. And we need that if we want to maintain a manufacturing industry in this country. We need base-load power. We've got refineries in Townsville, we've got a smelter in Gladstone, all of whom are struggling under those high prices in north Queensland. And they need reliable supply. They need base-load supply. No reason why we shouldn't have a very vibrant metals manufacturing industry with good, high-paying jobs for people. We've got the minerals. We've got the cheap coal. The clean coal technologies are proven. We should be smart enough to do it, like other countries are.

SABRA LANE:

You've already said that someone's registered interest. Are you prepared to say who that is?

MATT CANAVAN:

Well, no, because they haven't indicated that publicly. What I'll be saying today is that the NAIF is certainly open for applications. We've established this $5 billion fund to build infrastructure in the north. Energy infrastructure is a key part of what we need to build northern Australia, and…

SABRA LANE:

So possibly it could be placed at Rockhampton, even Townsville?

MATT CANAVAN:

Well, certainly there's people very keen to explore opportunities around the emergence of, say, the Galilee basin in the future, and the resource that will be there. That's in the area west of Mackay.

SABRA LANE:

You're a fan of that particular project - the Adani Carmichael coal mine. Is it perhaps the interested party here?

MATT CANAVAN:

Well, look, as I say, I'm not going to confirm any speculation. There's been a number of people that have approached me. But the issue there is that this – the project in the Galilee – there’s a lot of blaze and fury about one particular company, Adani. But it's not about Adani. It's about opening up the first coal basin in this country for 40 years, and when we did that with the Bowen basin in central Queensland, that did help kick-start a smelter in Gladstone and other projects and refineries in Townsville, because we had the cheap power and we had the mining operations to support it. And there's no doubt that we should be looking for that potential from the opening up of the Galilee. It shouldn't just be about a mine. We should be smart enough to be using this resource for our own purposes. It's a value-add to create even higher paying jobs. Our mining sector's great and I'm a big supporter of it but, you know, why should we just ship the resource to Japan so they can produce steel and refined products? There's no reason why we can't in this country. They have high wages, just like us, and these products are pretty capital-intensive, not labour-intensive. But we need cheap power. And if we don't have cheap power, we'll have cheap wages. And that's not an outcome I want.

SABRA LANE:

Well, some groups are saying that there needs to be a moratorium on coal, pointing out that they believe this is the only way Australia will meet its Paris obligations to cut carbon emissions.

MATT CANAVAN:

Well, that's not the case for Japan. So Japan's one of 19 countries in the world that has lodged commitments under its Paris agreement targets that indicate they're seeking to invest in clean coal to meet those targets. Japan has a very similar target to our own. And we know from the technologies that exist and are proven that they can cut coal-fired power emissions by up to 30 per cent and possibly higher if other technologies emerge commercially...

SABRA LANE:

But that's Japan, not Australia?

MATT CANAVAN:

Well, as I say, they're making a very similar - they've got a very similar target to our own. So they are meeting their Paris targets by investing in these technologies. I have no reason to doubt that we could do the same. Now, we're doing a climate change review this year to look at how we'll meet that target. Obviously, a range of options will be considered and we will continue to invest in technologies like renewables. There will continue to be advancements in storage and batteries. Those things will be very important and crucial. But as the Prime Minister said, we should have an "all of the above" solution. Julia Gillard used to be of that mind. So when the carbon tax came in, the Labor Party had modelling showing coal would continue to play a role in our network. But the Labor Party have changed now. Their next carbon tax, which they're still committed to if they get back in power, will be worse. The sequel will be worse, because not only do they want a carbon tax: they want to shut down all our coal-fired power stations as well. And that will massively force up prices and effectively be the death knell to our manufacturing sector.

SABRA LANE:

Minister, thanks for your time this morning.

MATT CANAVAN:

Thanks so much, Sabra.