Australian venture capitalists and technology developers are heavily backing carbon capture and storage (CCS) technologies, according to new research from multinational law firm Pinsent Masons.
According to Inside the Energy transition, a global study by Pinsent Masons and Censuswide, 84 per cent of Australian respondents have already invested in or developed CCS technology, with 82 per cent planning to back it again over the coming year.
This local appetite outpaces the already strong global average of 78 per cent.
Despite the current dominance of CCS, the research indicates the local market is maturing rapidly as players adopt a broader portfolio approach. Only 2 per cent of Australian respondents are currently engaged in geothermal energy, but 18 per cent plan to enter the space this year.
Similarly, low-carbon hydrogen is experiencing a significant rebound, with investor interest jumping from 5 per cent to 15 per cent, while e-fuels have doubled in popularity to 11 per cent.
“Technologies like geothermal, e‑fuels and low‑carbon hydrogen are moving up the developer agenda and developing into credible near-term opportunities for VC investors,” said Pinsent Masons energy partner Tim Dorgan.
“That broadening of focus signals a more mature market, one that recognises that no single technology can deliver the scale of emissions reduction required, and that a portfolio approach is essential.”
The report also highlights the success of Australia’s regulatory environment. 70 per cent of local respondents have utilised domestic government incentives, outperforming peer nations like France with just 21 per cent and the UK at 12 per cent.
Furthermore, 12 per cent of global clean-tech players have tapped into Australian programs, spurred on by the federal government’s AU$7 billion climate finance package introduced last year.
For local developers, capital cost rebates were the most utilised incentive at 39 per cent, followed by green bonds at 30 per cent.
This financial support has made Australia an attractive destination, with 16 per cent of the global investor pool planning to expand their operations down under.
While 77 per cent of local firms plan to expand within Australia due to its stable political landscape, significant hurdles remain.
More than half, 51 per cent, of Australian investors cited unstable regulatory frameworks abroad as a deterrent to international expansion, while 46 per cent of developers noted that workforce skill shortages and demand constraints continue to limit their growth.
