Campaigners say $90m should be used instead to help Latrobe Valley transition away from brown coal

This article is more than 2 years old

This article is more than 2 years old

A $90m fund set aside for failed “clean coal” projects in the Latrobe Valley should be spent on helping the region transition away from reliance on coal, Environment Victoria has said.

The Victorian government said this week that the Advanced Lignite Demonstration Program (ALDP) would be shut down after its third and final project to find a low-emissions use for the valley’s enormous brown coal store was declared unsuccessful.

It’s the third such failure since the ALDP was established in 2014. Each of the projects was promised funding on the proviso that it meet certain milestones.

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None did, leaving the fund intact.

Environment Victoria campaigns manager Dr Nicholas Aberle said the funding should be redirected into the Latrobe Valley Authority, which was given a four-year life to help workers and the community transition into other jobs following the closure of Hazelwood power station.

Aberle said the valley needed help to establish new industries and that focusing on low-emission brown coal projects had clearly not worked.

“The purpose of these projects was to bring investment to the Latrobe Valley but these particular projects have failed to bring any investment,” he told Guardian Australia.

“We know Hazelwood is not going to be the last coal-fired power station to close. We are going to need the Latrobe Valley Authority for much longer than four years.”

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In a statement, the Victorian Department of Economic Development, Jobs, Transport and Resources said that the proponent of the final project, Coal Energy Australia (CEA), “has invested in its ALDP project since 2014 but the opportunity has not developed as envisaged”.

CEA was granted $30m in provisional funding to construct a $143 trial plant to produce fertiliser, oil and metallurgical coal.

It was supposed to meet its first funding milestone in April 2015 but was granted three extensions before failing to meet its most recent milestone of April 2018. Its most recent public financial statement showed a net loss of $8.9m in the 2015-2016 financial year.

The closure of the ALDP came a week after the federal and Victorian governments committed a combined $100m toward a $496m world-first trial to refine hydrogen from brown coal.

Announcing the project at the Loy Yang coal mine, prime minister Malcolm Turnbull said the hydrogen energy supply chain project would “ensure there are more jobs for Latrobe Valley workers not just today, but in years and decades to come”.

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The project is supported by the Japanese government and major Japanese manufacturers and would produce hydrogen for export to Japan.

Aberle said that project faced the same hurdle as the failed ALDP projects in reducing or managing pollution once it scaled up from a trial project to a commercial venture.

He said investment in the Latrobe Valley should diversify away from a reliance on brown coal.

“[Brown coal is] seen as this amazing, bountiful resource and that it would be a waste not to use it but we are getting to the point where we need to stop even thinking of this as a resource,” he said. “It’s a thing that is under the ground, but if there’s nothing we can do with it then it’s not a resource.”