A Morrison government plan to change the Australian Renewable Energy Agency (Arena) to allow it to fund a broader range of technologies, including some using fossil fuels, has been blocked after a Liberal-led committee moved a motion against it.
The government did not contest the Senate disallowance motion which was moved by the standing committee for the scrutiny of delegated legislation, chaired by the outgoing Liberal Concetta Fierravanti-Wells.
The committee had earlier written to the energy minister, Angus Taylor, to warn it believed his proposal to change Arena’s remit without legislation went beyond what the parliament envisaged when it passed laws to create the agency. Taylor had attempted to use regulation to allow Arena to fund programs under the government’s technology investment roadmap, including carbon capture and storage as well as “clean” hydrogen made using gas.
It is the second time the government’s proposed changes to Arena had been blocked. It was knocked back by the Senate in June last year after being opposed by Labor, the Greens and crossbench senators Rex Patrick, Stirling Griff and Jacqui Lambie.
The government later reintroduced an altered version of the regulation that more tightly defined the technologies that could benefit and introduced a spending cap.
The government chose not to contest the disallowance motion on Monday, saying it did not want to call a vote in the Senate out of respect for a condolence motion in the chamber for Labor senator Kimberley Kitching, who died suddenly earlier this month.
A spokesperson for Taylor said the government remained committed to the change and would revisit it in the “immediate future”.
It is likely a majority of senators, including from Labor, the Greens and several crossbenchers, would have supported Fierravanti-Wells in blocking the Arena changes if a vote had been called.
Chris Bowen, the climate spokesperson for Labor, said the disallowance was “just the latest addition to the climate and energy bonfire that started with this government’s election nine years ago”. He said that the motion had been moved by a Liberal-led committee vindicated Labor’s fight to stop Arena from becoming a “slush fund”.
The Greens leader, Adam Bandt, said it showed “Greens in parliament deliver for the climate”.
“We helped set up Arena in the 2010 power-sharing parliament, we stopped [former prime minister] Tony Abbott abolishing it and now we’ve stopped the Liberals using the country’s renewable energy agency to funnel public money to coal and gas donors,” he said.
In a letter to Taylor last year, Fierravanti-Wells noted the objective of the laws governing Arena was “to improve the competitiveness and supply of renewable energy in Australia”. The Liberal senator said there was nothing in the bill’s explanatory memorandum “to suggest that it was contemplated that the Arena would have the ability to foster anything other than renewable energy technologies”.
“The committee is concerned that the [change] deals with the significant matter of expanding the jurisdiction of the Arena from investing in renewable energy technologies to programs relating to energy efficiency and low-emissions technology,” Fierravanti-Wells wrote.
She said the committee believed the changes were “more appropriate for parliamentary enactment” – in other words, they should be made through legislation.
On Monday, Fierravanti-Wells said the standing committee for the scrutiny of delegated legislation was a technical committee that assessed regulations against “a set of scrutiny principles”, and the disallowance motion followed a “unanimous and bipartisan recommendation of the committee” last year.
The disallowance went through two days after Fierravanti-Wells was demoted to an unwinnable position on the NSW Coalition senate ticket.
The government last year defended the proposed change, saying it would bring “a portfolio of technologies to commercial parity with higher-emitting alternatives so we can reduce emissions across every sector of the economy, while protecting industries and jobs, and creating new ones”.
On Monday, a spokesperson for Taylor said it had not changed its position. “The government has withheld calling a division out of respect for the condolence motion for senator Kitching,” they said.
“The government remains committed to the regulation and the role it plays in supporting the deployment of low-emissions technology. Expanding Arena’s remit has wide industry support.”
Industry group the Smart Energy Council welcomed the disallowance. It said it had planned to launch legal action against the change if it was not disallowed in the Senate.
“This is absolutely fantastic news that government money won’t be going to fossil fuel projects,” its chief executive, John Grimes, said.
Officials told Senate estimates last year the government had drafted legislation to change Arena, but the minister opted to use regulation instead. Bowen told parliament he believed the government may not have introduced the drafted bill because it was concerned Coalition MPs would attempt to amend it to allow Arena to fund coal projects – as the then backbencher, now deputy prime minister, Barnaby Joyce did with legislation to change the Clean Energy Finance Corporation.
