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26 September 1996
It gives me great pleasure to be here in Morwell today at the launching of the HRL Coal Gasification Development Facility. I thank the Board of the Herman Research Laboratory Limited for this opportunity to launch this important initiative.
Someone once said that "a diamond is just a piece of coal that made good under pressure". I think that what we see here today is a potential diamond in the making, produced in response to continuing pressures on industry generally and the coal industry in particular.
Actions to address the enhanced greenhouse effect are a relatively recent pressure on the coal industry, which continues to face a range of other economic and environmental challenges.
The coal gasification technology being launched today clearly provides an important step forward in addressing the environment issues associated with coal fired electricity generation. By increasing the efficiency of the combustion process, this technology can significantly reduce carbon dioxide emissions. I also understand there are other benefits, in terms of reduced sulphur dioxide, nitrous oxide and particulate emissions
The benefits for reduction of greenhouse emissions are especially important. Climate change is one of the more urgent challenges facing Australia, both in terms of the environment and the economy.
International Developments in Greenhouse
The global challenge is being addressed through the United Nations Framework Convention on Climate Change.
In mid July, I led the Australian delegation to the Second Conference of Parties to the Framework Convention on Climate Change in Geneva. The meeting marked an important stage in negotiations to achieve agreement for international action in the post-2000 period, particularly for developed countries in light of their leadership role in advancing greenhouse response action.
The meeting produced a key outcome in the form of a Ministerial Declaration, which endorsed the Intergovernmental Panel on Climate Change's Second Assessment Report as the most comprehensive and authoritative assessment on climate change. This consensus report was the first recognition by the world's leading climate experts, that the balance of evidence suggests a discernible human influence on the global climate system.
The meeting urged accelerated negotiations on strengthened, developed country commitments and on the advancement of present commitments applying to all countries.
We registered Australia's recognition of the importance of the findings of this Report and the powerful messages it contains on the need for effective international action. Australia reaffirmed its commitment to the Convention, and the Berlin Mandate process.
At Geneva Australia also proposed that emissions targets should be differentiated to reflect countries' differing national circumstances. Such an approach would enable environmental outcomes to be achieved more effectively and more equitably.
Countries expressed a readiness to engage on the concept of differentiation which is now established as a key negotiating issue. To build on this progress, Australia will bring forward ideas for further development of differentiation for the next negotiating session in December.
We are committed to pursuing an effective environmental outcome on greenhouse but it must be based on each country, including Australia, bearing a fair and equitable share of the burden. Such a foundation offers the best hope for a durable and effective international response to climate change. The achievement of this outcome in international negotiations represents a considerable challenge and a very high priority for this Commonwealth Government.
The Geneva Conference brought home strongly the importance of Australia being able to demonstrate effective domestic action on greenhouse emissions. We need to show that we are delivering practical options for emissions abatement if our credibility in international negotiations is to remain strong.
Australia's Domestic Greenhouse Response
The Government is currently working, as a priority, on the major review of the National Greenhouse Response Strategy, which will be due for completion in mid 1997. This undertaking involves working jointly with State and Territory and local governments, and will involve industry, environment groups and other interested stakeholders.
Greenhouse gas emissions arise in almost every activity we undertake. And our national response recognises that, as a first step, we should address those areas where environmental benefits can be achieved concurrently with economic gains. Such "no-regrets" responses are available in sectors across the economy and society.
Within the Latrobe Valley, there is tremendous potential to play a role in reducing greenhouse gas emissions.
Reducing methane emissions from ruminant animals such as cattle, through improving pastures, and other methods can limit emissions while improving economic returns. Methane emissions, mainly arising from livestock and vegetative waste decomposition and energy resource, are a major source of Australia's greenhouse gas emissions, accounting for just under a quarter of all our emissions.
The Latrobe Valley also offers great scope for plantation forestry, which has the potential to develop a net sink for Australia by removing, rather than creating, greenhouse gases. Plantations offer many other benefits, including sustainable economic activity, land remediation and a use for existing infrastructure such as timber mills.
The Government's National Vegetation Initiative is directed at addressing these issues, with a particular focus on biodiversity protection and the provision of sinks for greenhouse gases. Careful management of land clearing and sink enhancement offer important opportunities to effectively reduce greenhouse gas emissions
The Energy Sector
However, the single biggest sector in terms of emissions is energy, which accounts for around half of net national emissions. Energy will continue as a major focus for our domestic greenhouse response.
In recognition of the importance of energy, both to the environment and to economic activity, the Government will produce a White Paper on Sustainable Energy.
The White Paper will ensure that Australia is well placed to capitalise on economic opportunities and meet environmental challenges domestically and globally over the next 25 years. It will provide a cohesive framework for the pursuit of environmental, economic and social objectives over that time period.
It is already clear that there is great scope to improve the efficiency of energy services. The Government recently signed cooperative agreements with a second group of companies to limit greenhouse gas emissions, under the Greenhouse Challenge Program. The Government sees considerable potential for cooperative partnerships with industry to achieve environmental outcomes.
On entering government, we made a commitment to accelerate activity under the Greenhouse Challenge program. Seventeen companies have now signed agreements, covering 252 major sites. Together, the companies contribute 13 per cent of total greenhouse gas emissions produced in Australia. The agreements illustrate the potential for companies to improve their greenhouse performance in the use of energy.
I strongly encourage all businesses and industries to join with the Government in partnership, and thereby strive to achieve best practice in implementing greenhouse gas emissions reductions.
The agreements are helping to encourage a necessary, and major, cultural change in the way energy is viewed - no longer to be seen as an inexhaustible supply, but rather as a precious resource, which needs to be valued.
An important additional element driving this cultural change will be the creation of more competitive energy markets in gas and electricity.
The Commonwealth Government is committed to economic reforms in national energy markets which will allow market forces to respond dynamically and flexibly to changing circumstances. Prices increasingly will reflect the true costs of energy provision, and there should be no discrimination between any particular energy source or technology. Market reform can help to open the door to the whole spectrum of new and innovative energy technologies.
Competitive energy markets offer the prospect of significant environmental gains. It is important that the micro-economic reform agenda proceeds without delay, so that we can deliver both the economic and environmental benefits.
These developments provide both the opportunity, and the challenge, for energy supply from brown coal.
Improving the efficiency with which we use energy is a prerequisite for limiting greenhouse gas emissions. But new supply technologies will also be needed.
The role of HRL's technology
The HRL management and research team are to be congratulated for addressing the greenhouse emissions problem faced by the brown coal industry, and the development of a potentially practical and effective working solution.
Integrated drying coal gasification technology is an advanced 'cleaner coal' technology. If it can be retrofitted to existing brown coal base load power stations, it will provide a significant opportunity to reduce our current emissions. Such technologies have an important place in reducing environmental impacts, alongside renewable energy technologies.
The massive growth in the demand for electricity across the APEC economies has been estimated to require an investment in infrastructure of 1.6 trillion US dollars by 2010 alone. There is little doubt that coal will play an important part in meeting this demand, and that better technologies will be vital if we are to find an effective global solution to the greenhouse problem.
The development of the coal gasification process could be one of the technologies available in the APEC region to reduce the environmental impacts of energy supply and use. By doing so, it can achieve an environmental benefit while providing another source of Australian expertise and technology with a large and growing export potential.
I would like to conclude, therefore, by congratulating the Board, the staff and the shareholders of HRL, for their efforts in reaching this milestone with the coal gasification development. On behalf of the Federal Government, I wish you well in your future endeavours with the expanded application and marketing of the process, and I take great pleasure in launching the HRL Coal Gasification Development Facility.