South Korea Adds to Fears Australia Green Rules Put Gas at Risk

2023-07-28 16:19

South Korea became the latest country to express concern Australia’s new emissions reduction policies could pose a risk

South Korea became the latest country to express concern Australia’s new emissions reduction policies could pose a risk to gas projects.

The Ministry of Trade, Industry and Energy said it has asked Australia to exclude already planned gas investments from rules that will make new projects subject to stricter climate targets. It said Trade Minister Lee Chang-yang raised the issue during a meeting with Australian Climate Change and Energy Minister Chris Bowen in Seoul earlier this week.

Bowen’s office didn’t immediately respond to a request for comment.

Read More: LNG Buyers Worry Australia Policy to Hurt Exports, Woodside Says

Earlier this year, Australia passed legislation that will require the nation’s largest polluters to make additional cuts to their emissions over time. In contrast, new gas fields must fully offset emissions as soon as they begin production, which threatens to boost costs for those operations.

Australia’s fossil fuel buyers argue that the government’s efforts to safeguard domestic resources and cut pollution could disrupt projects and threaten energy security in Asia.

Japan’s government has repeatedly expressed concerns, including to Australian officials, in recent months. Jera Co., Japan’s top gas importer, has a stake in the Barossa natural gas project that’s already in development off northern Australia.

SK E&S Co., a South Korean company, has a 37.5% stake in Barossa, which is also 50% controlled by Adelaide-based Santos Ltd. The field has higher CO2 content than other projects across the country, and the new Australian regulations could increase the price of the gas.

The project is developing measures to capture emissions that will limit the impact of the Australian policy, SK said in response to a Bloomberg query.

Prime Minister Anthony Albanese won office in elections last year on a platform that promised to end the nation’s reputation as an international climate laggard, and quickly passed more ambitious targets to cut emissions 43% by 2030 from 2005 levels.

--With assistance from Ben Westcott.