SABRA LANE: The Energy and Emissions Reduction Minister is Angus Taylor. Minister, good morning and welcome to AM.

ANGUS TAYLOR: Thanks for having me, Sabra.

SABRA LANE: First, the report talks about the need for net zero emissions by 2050 - to be clear, is that now explicitly the Government's policy?

ANGUS TAYLOR: No. The Paris Agreement, of course, agrees that all countries who are party to the agreement should collectively reach net zero in the second half of the century. That, of course, is the Government's policy. But more importantly, Sabra, our approach to this is to not have a target without a plan. Our focus is on using technology not taxes to get to outcomes, and obviously as technologies improve, we expect significant emissions reductions and we'd love to be able to achieve net zero by 2050, but ultimately that will depend on the pathways of technologies to deliver that without damaging the economy.

SABRA LANE: Okay. The review recommends the broadening of the eligibility of the Climate Solutions Fund to include carbon capture and storage, a system that captures emissions and stores them underground. How will you convince Parliament to pass that as the Senate, probably, is not going to support it?

ANGUS TAYLOR: Well, this is a change in the methodology, it is not a change in the underlying legislation necessarily, Sabra, but the important point here is that we have to use every possible means we can, every possible technology to reduce emissions. Now, when you look at carbon capture and storage, it's now widely accepted by the IPCC, the IEA, the UK now sees it as central to their plans and their technology set that they're using, and right across the world, the US is using it very broadly now, so we expect it to be a very important part of the global effort and it's certainly relevant in Australia.

SABRA LANE: There is deep scepticism about its ability to work. But to be clear, you don't need Parliament's approval - is that what you're now saying?

ANGUS TAYLOR: Well, I mean, it depends how we do it, but what this is proposed to do is change the methodology. That's very different from many of the debates that have happened in the past. So, we're proposing on having a methodology which allows carbon capture and storage to be included in the Climate Solutions Fund - that work is already underway - and as I say, this is not new. I mean, the oil industry has been using this for various means for many, many years. It is well understood, it is now widely accepted. The IEA itself has accepted it as an important part of the technology toolkit. We store carbon now in vegetation, in soil and we can store it in geological areas as well.

SABRA LANE: Now, I'm going to put this in a very simple way because it's very complex, the report recommends using the safeguard mechanism that sets the limit for emissions and allow a so-called below baseline crediting mechanism, rewarding companies that cut emissions below that level, giving them credit for that, which then can be traded. Is that not a form of voluntary carbon trading?

ANGUS TAYLOR: No. I mean, this is simply saying - look, if you take a step back and keep it simple as you rightly say, we need to as we work our way through these things - this is just about making sure that Australian manufacturing has the right incentives in place to reduce emissions. So, there is a safeguard mechanism, it penalises manufacturers if they raise their emissions in a way that's out of line with that mechanism, and that's already in existence. But there's no incentive, there's no carrot, if you like, for them to go further than that. This simply provides a carrot for them to be able to reduce their emissions beyond that baseline. And what that does, it's so important, is it gives them an incentive to deploy new technologies and that's what we want to see.

SABRA LANE: That's right, but it gives companies a reward if they cut emissions below that certain threshold, and it's suggested that they be allowed to trade that. That is a form carbon trading is it not?

ANGUS TAYLOR: You can trade ACCU’s now, there's nothing new with that, that's a pre-existing system that we have through the Emissions Reduction Fund. What is new here is that we're saying, if you are a manufacturer and you can deploy the very best technology available to get your emissions per unit of output, whatever it is you're producing, to a very low level, you should receive some reward for that, some credit for that under the Climate Solutions Fund.

SABRA LANE: [Talks over] But then can be sold for money?

ANGUS TAYLOR: I beg your pardon?

SABRA LANE: That then can be traded for money?

ANGUS TAYLOR: Well, they can use it for many different purposes - they can use it for another part of their business, they can trade it, they can trade it now. I mean, look, if a farmer reduces emissions or absorbs emissions in their vegetation or their soil, they can trade now. That's exactly what happens. So, there's absolutely nothing new in that, the certificates are well understood, they're called ACCU's and they're tradable. So there's, that is not the new thing here, the new thing is encouraging manufacturers to deploy best practice technology, and coming out of COVID-19, encouraging our manufacturing sector to invest, to deploy the very best technologies available - that's something we all want to achieve.

SABRA LANE: This decision pre-empts a review into the Emissions Reduction Fund by the Climate Change Authority. Submissions to that review close tomorrow. Why aren't you waiting to hear what the authority has to say before redesigning this policy?

ANGUS TAYLOR: We'll be interested in what they've got to say, but I mean, we're getting on with it. I commissioned this back in October last year. We committed to the Climate Solutions Fund $2 billion at the beginning of last year, and we want to get moving because the faster we get moving, the faster we get these new technologies into place. We broadened the Emissions Reduction Fund into the Climate Solutions Fund which will include a strong focus on manufacturing, on agriculture, on transport, on these sectors that haven't been a focus in the past. There's no time to wait. This is important work that we must get on with. I welcome any further input and there'll be lots of consultation on the implementation of these recommendations over the coming months, including with the Climate Change Authority.

SABRA LANE: Minister, thanks for joining AM this morning.

ANGUS TAYLOR: Thanks for having me, Sabra.



ENDS