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Carbon emissions reduction a failure in Australia: Peabody

The world's biggest private coal company, Peabody Energy, has labelled as a failure Australia's efforts to reduce carbon emissions through tax and other policies, urging the US government not to mandate carbon capture and storage for new power plants.

The comments, made in response to planned US rules to restrict coal plant emissions, underline the lack of progress on carbon capture and storage projects, which, despite years of research, remain prohibitively expensive and on which the Abbott government is planning to cut funding.

The US Environmental Protection Agency on Friday released a proposal requiring new coal plants to limit emissions to levels that can only be met through carbon capture and storage. The moves are a key part of Barack Obama's climate change plan, announced in June.

“Carbon capture and storage technology is simply not commercially available and not able to satisfy America's need for low-cost electricity,” said Peabody, which has operations in Queensland and NSW as well as the US.

"This type of experiment has been tried -- and failed -- in Australia, the European Union and California, and it has led to soaring power prices, exported jobs and slumping economies."

A St Louis-based Peabody spokeswoman said this morning that the coal giant was referring to the failure of Australian, European and California energy policies and carbon pricing, not specifically coal carbon capture and storage programs.

She said this was viewed as “promising technology for the future”.

Peabody said the US EPA's proposed rule, could “cause consumers' power bills to skyrocket over time and cause more pain at the plug than Americans have experienced at the pump”.

The US plans could put additional pressure on Australian coal exports if they result in more US coal being exported, dragging down prices.

In 2009, the Rudd government allocated $1.7 billion to its Carbon Capture and Storage Flagships program out to 2020 but this funding was reduced by $500 million in the May budget.

Two projects, one in Collie, Western Australia, and one in Victoria's Latrobe Valley, had been selected for the funding.

The Coalition plans to stop funding the program, a spokeswoman for Industry Minister Ian Macfarlane said.

She said the government still favoured carbon capture and storage, which was first championed by John Howard, as a way to reduce emissions and keep jobs in the coal industry, but that it should be funded by industry.

The International Energy Agency and the Australian Coal Association (which recently merged with the Minerals Council of Australian) both this year said the technology was a key option to reduce global carbon emissions.

But the IEA said its pace of development remained uncertain and that even at a carbon price of $US50 a tonne, it would be more expensive than gas, nuclear and wind power.

Source: The Australian