Environment and climate features in 2023 Federal Budget

The 2023 Federal Budget has promised increased funding and programs supporting climate and environmental initiatives.

Snapshot
This is the first Federal Budget since the Government committed Australia to a 43% emissions reduction target by 2030 and net zero by 2050 and the release of the State of the Environment Report.  The Budget contains key funding initiatives aimed at decarbonisation, resourcing to support legislative reform and implementation of changes to Federal environmental laws.

Key takeaways – climate and energy 

• The Climate Change Authority will receive funding recognising its increased role under the Climate Change Act 2022;
• $20 billion will be invested in providing low-cost finance to upgrade and modernise the electricity grid through the Powering Australia Plan;
• The Powering the Regions Fund will be established with a $1.9 billion allocation;
• The National Energy Transformation Partnership will receive funding to prioritise reforms crucial to accelerating the energy transformation in Australia;
• The AER will receive funding to oversee gas pipeline regulatory reforms that will limit the market power of pipeline service providers; and
• $141 million will be invested in carbon capture technologies and over $20 million will be invested to support carbon farming.

Key takeaways - environment

• $117 million will be invested to “support making timely environmental decisions” and the budget of the Department of Climate Change, Energy, the Environment and Water (DCCEEW) will be increased;
• $7.8 million for the response to the Samuel Review and the establishment of the Federal Environmental Protection Authority;
• $224.5 million for the Saving Native Species program with investments to be guided by the Threatened Species Action Plan: Towards Zero Extinctions; and
• Nearly $100 million will be used to deliver projects that accelerate reef protection and restoration of the Great Barrier Reef.

Climate Change
The Budget has allocated the following to address climate change:

• $275.4 million over 6 years to establish the Driving the Nation Fund to invest in cleaner transport;
• $47.1 for the Climate Change Authority;
• $45.8 million over 6 years to increase international engagement on climate change and energy transformation;
• $20.3 million to support carbon farming;
• $15.9 million for engaging First Nations Peoples on Climate Change; and
• $9.3 million to set up the Commonwealth Climate Risk and Opportunity Management Program.

Climate Change Authority
The Budget allocated $42.6 million to the Climate Change Authority, and to introduce an Annual Climate Change Statement to Parliament to increase transparency around climate-related spending in the budget.

Reducing Emissions in the Transport Sector
The Budgets allocation to the Driving the Nation Fund doubles the federal investment in electric vehicle charging, hydrogen refuelling infrastructure and fleets to support the energy transition. $500 million will be invested in reducing transport emissions by building electric vehicle charging infrastructure at 117 highway sites and hydrogen highways for key freight routes. $146.1 million over 5 years will also be available for the Australian Renewable Energy Agency (AREA) to co-invest in projects to reduce emissions from the road transport sector.

Carbon Farming & Carbon Capture Technologies
The Budget has allocated $20.3 million to establish the Carbon Farming Outreach Program to help Australian farmers, land managers and First Nations peoples to participate in carbon markets and integrate low emission technologies and practices.

The Government will provide $8.1 million over 3 years to support commercialisation of seaweed as a low emissions feed for livestock and support other such projects that will lower barriers to market entry.

$141.1 million over 10 years will be provided as part of a ‘realignment of investment’ in carbon capture technologies. Investment will prioritise technology development for difficult to abate industrial sectors and accelerated carbon dioxide removal and negative emissions technologies.

Energy
The Budget has allocated the following to help deliver cleaner energy:

• $20 billion for the Rewiring the Nation plan to modernise Australia’s electricity grid;
• $1.9 billion to establish the Powering the Regions Fund;
• $224.3 million to fund 400 community batteries;
• $157.9 million over 6 years to implement the National Energy Transformation Partnership;
• $102.2 million for community-scale solar and rooftop solar;
• $71.9 million over 7 years to speed up the development of the green hydrogen industry;
• $63.9 million to support energy storage and electricity grid capacity;
• $49.5 million over 4 years to increase the security of the domestic diesel exhaust fluid;
• $22.8 million for the Australian Energy Regulator (AER) to simplify regulation for use of and investment in gas infrastructure;
• $2.2 million to create a Guarantee of Origin scheme; and
• $0.5 million in 2022-23 to support the establishment of offshore wind and other renewables.

Environment & Water
The Budget has allocated the following to help reverse the decline of the environment:

• $1.2 billion to protect and restore the Great Barrier Reef;
• $1.1 billion towards water infrastructure projects;
• $224.5 million towards protecting native species;
• $91 million to improve local waterways through the Urban Rivers and Catchment Program;
• $66.5 million to support 10 new Indigenous Protected Areas;
• $14.7 million for the protection of cultural and First Nations heritage sites;
• $10.8 million to improve ocean and marine park management;
• $117 million to ‘support timely environmental decisions’ by DCCEEW; and
• $7.8 million to deliver a full response to the Samuel Review and establish an Environment Protection Agency.

The Government will invest $117 million to support making timely environmental decisions by ensuring that DCCEEW can sufficiently address proposals and undertake compliance activities. The money is earmarked to sustain assessment and compliance functions under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) and the related Sea Dumping Act. The Budget allocates $275.7 million over 4 years and $60.5 million per year ongoing to DCCEEW.

The Government will also provide $7.8 million in 2022-23 to deliver a full response to the Samuel Review by the end of 2022 and to design an independent Commonwealth Environment Protection Agency.

Murray-Darling Basin Water Reform
The Government will provide initial (undisclosed) funding towards meeting environmental water targets under the Murray-Darling Basin plan and funding to respond to the ACCC’s water markets inquiry.

The Government will also provide $51.9 million over 5 years to strengthen the Murray-Darling Basin Plan by updating the science to account for the impacts of climate change.

Water Infrastructure Investment
An initial investment of $91.1 million over 6 years will clean up and restore urban waterways.

The Government will invest $1.2 billion in water infrastructure through its National Water Grid Fund. New projects commencing in Far North Queensland and throughout Tasmania are planned to increase irrigatable land by more than 114,855 ha. The Budget provides $278.1 million over 5 years to expand investment in nationally significant water infrastructure projects such as:

• Cairns Water Security Project ($107.5 million)
• Tasmania Pipeline to prosperity ($100 million);
• Mount Morgan Water Supply Project ($3.5 million); and
• Plans for water infrastructure options in Central Queensland and the Burdekin ($32 million).

The Budget has also delayed or deferred a number of water infrastructure projects. The $5.4 billion Hells Gates Dam project in Queensland will not proceed, and the $899.5 million funding for the Dungowan Dam and Pipeline, Emu Swamp Dam and Pipeline, Hughenden Irrigation Scheme and Wyangala Dam Wall Raising projects will be deferred until the projects can be reconsidered once business cases are completed and assessed.

Great Barrier Reef
The Budget will provide $96.9 million over 4 years for implementation of the Reef 2050 Long-term Sustainability Plan, and $91.8 million over 5 years to deliver projects that accelerate reef protection and restoration activities.

Prepared by Kathryn Pacey, Peter Briggs, Melanie Debenham, Heidi Asten, Naomi Hutchings and Grace Hicks