The CEFC seeks to contribute to the delivery of Australia’s Nationally Determined Contribution under the Paris Agreement. Our activities are guided by the CEFC Act, Investment Mandate Directions and Australian Government policy, including the Technology Investment Roadmap and the Low Emissions Technology Statement.
These factors feed into our investment decisions, which are also informed by investor, market and technology trends, all of which continue to rapidly evolve. In investing to reduce emissions across the economy, our investments target four areas or “pathways” of decarbonisation, which have the greatest potential for emissions reduction.
As in previous years, the CEFC is careful not to claim that this abatement occurs independently of other policy measures, such as government grants or procurement settings, or regulatory settings such as the Renewable Energy Target.
Projects we have invested in are forecast to avoid 7.9 Mt CO2 of emissions in the year 2030, up from a forecast 7.1 Mt CO2 last year, factoring new investment commitments made in 2020–21.
To facilitate comparability, we report avoided emissions based on a horizon year of 2030, consistent with Australia’s biennial reporting to the United Nations Framework Convention on Climate Change. The CEFC financed projects, and the emissions they are expected to avoid, will play an important role as Australia seeks to meet and exceed its 2030 emissions reduction target of a 26 per cent to 28 per cent reduction on its 2005 emissions level. Meeting the target will require emissions to fall by some 50 Mt CO2 annually from 499 Mt CO2 in 20201 to between 443 and 455 Mt CO2-e in 20302.
In assessing our impact on emissions reduction, the CEFC considers only those projects where we have a direct abatement impact, such as through our investments in additional renewable energy generation. As demonstrated in the 2020–21 year, the CEFC is increasingly investing in significant decarbonisation projects where abatement is not readily measurable, including transmission, storage and grid balancing projects. These strategic grid-related projects are an essential precursor to enable future renewable generation to access the grid. These investments complement our direct abatement activities and will facilitate future investment in the decarbonisation of the electricity grid as well as the broader economy.
Note: Table excludes increases in existing commitments, refinancing and replacement of existing commitments, follow-on equity investment commitments and Project EnergyConnect (which closed just after year end).
2. https://www.industry.gov.au/sites/default/files/2020 -12/australias-emissions-projections-2020.pdf