A change in marine pollution laws could ignite an Australian boom in storage of greenhouse gas emissions from other countries.
A federal parliamentary committee has recommended the Australian government ratify changes to an international protocol that would green-light the carbon capture and storage trade.
Evidence on the environmental benefits was convincing and any impacts should be addressable through existing and proposed regulations, the committee report said.
Committee chair Tony Zappia said the industry appeared well-placed to respond to scaling up, given domestic carbon was already able to be stored offshore.
The London Protocol was updated more than a decade ago, opening the door for storage of waste in sub-seabed rock.
As a signatory to the protocol it was time for Australia to ratify the amendments, Mr Zappia told parliament on Tuesday.
"With the right safeguards, doing so will enable Australia to participate in the international market for carbon streams and more importantly contribute to global atmospheric carbon reduction strategies," he said.
According to the report, Australia could be at the forefront of carbon storage for the region given its natural geological advantages, industry experience and demand from trading partners.
But the oil and gas industry had concerns about the time it takes to get permits and approval.
Carbon capture can be used to trap emissions from power plants and heavy industry such as cement, steel and hydrogen production.
The carbon is separated from other gases and compressed, which can then be permanently stored underground.
Some Australian oil and gas producers are examining the feasibility of using depleted wells for carbon capture and storage.
During the inquiry, Geoscience Australia confirmed Australia's "significant experience" in the development of commercial-scale carbon capture and storage projects.
Chevron Australia, operator of the country's only offshore carbon capture and storage plant Gorgon, gave evidence of the significant capacity for geological storage of both domestic and international carbon emissions.
Separately, feedback is due by June 30 on new offshore carbon capture and storage acreage made available by Resources Minister Madeleine King in response to industry demand.
Areas have been nominated in the Bonaparte, Browse, Northern Carnarvon, Perth, Otway, Bass and Gippsland basins.
