Failed coal project funding needs to be reallocated to Hazelwood closure transition

Three proposed coal projects in the Latrobe Valley that received government funding have failed to materialise, with a second project now cancelled and the third missing key milestones.

Environment Victoria today calls on state and federal industry Ministers Wade Noonan and Greg Hunt to use the money promised to these projects to instead create sustainable industries for the Latrobe Valley.

“With news of Hazelwood’s imminent closure, both the state and federal governments need to urgently invest in the long-term future of the Latrobe Valley, not in brown coal pipe dreams,” said Environment Victoria Campaigns Manager Dr Nicholas Aberle.

The Advanced Lignite Demonstration Program received joint funding from federal and Victorian governments in 2012, with three projects selected in 2014:

• Shanghai Electric, $25m – failed November 2015
• Ignite Energy Resources, $20m – failed October 2016
• Coal Energy Australia, $30m – missed key milestones but given second extension in July

Environment Victoria Campaigns Manager Nicholas Aberle said today:

“These coal projects were picked as the best out of dozens of applications for funding but they’re still not delivering anything. Both federal and state governments should pull the plug on these go-nowhere coal projects, and put the money towards a Hazelwood closure transition fund.

“With another $20 million recovered from the failed Ignite Energy Resources project in September, Ministers Noonan and Hunt must immediately pledge this money to driving the Latrobe Valley’s transition to a clean and sustainable future.

“The Andrews government has already committed $40 million to supporting economic transitions in the Latrobe Valley, though more will be needed as coal-burning power stations are retired.

“We call on the Turnbull government to match and exceed the contribution of the Andrews government to help create sustainable and innovative industries in the Latrobe Valley. The federal government is yet to provide a cent to any transition fund. Energy Minister Josh Frydenberg, Industry Minister Greg Hunt and Gippsland MP Darren Chester urgently need to announce how they will support the Valley through this challenging transition.

“We are surprised that a decision was made to extend the $30 million contract of Coal Energy Australia, given that the project appears to be making little progress. If it went ahead, the project would create two million tonnes of carbon pollution every year, so it’s hard to see how this fits with the Andrews government’s commitment to getting emissions to zero.

“Pie-in-the-sky coal projects have never delivered any benefit to the Latrobe Valley. We should start valuing the Latrobe Valley for its people and its skills, not for what’s under the ground,” said Dr Aberle.