SYDNEY (REUTERS) – Australia will set up a A$1 billion (S$990 million) fund to invest in companies to develop low-emissions technology, Prime Minister Scott Morrison said on Wednesday (Nov 10), as the country seeks to cut carbon emissions and hit net-zero targets by 2050.

Under the plan, the federal government will commit A$500 million to the fund, matched by private investors, which will be used to back early stage companies in developing technologies including carbon capture and storage.

“Our plan to reach net zero by 2050 is an Australian one that’s focused on technology not taxes and this fund backs Australian companies to find new solutions,” Mr Morrison said in a statement.

The federal government will introduce legislation to establish the fund, in order to allow the Clean Energy Finance Corp, the government-owned green bank, to fund carbon capture and storage, which is not allowed under its existing terms.

Opposition Labour, which opposes diversion of renewable energy funding to carbon capture and storage (CCS), said it would check the details of the fund before supporting the legislation.

“The government’s spin says this is new money but we will look at the details,” Shadow Energy Minister Chris Bowen told broadcaster ABC on Wednesday.

Industry body Smart Energy Council said the government was trying to “kill (Clean Energy Finance)” by forcing it to fund “unproven, uneconomic carbon capture and storage projects”.

CCS traps emissions and buries them underground. Advocates of the technology see it a key to unlock large-scale economic hydrogen production, while critics say it will extend the life of dirty fossil fuels.

The move came a day after the federal government pledged A$178 million to ramp up the rollout of hydrogen refuelling and charging stations for electric vehicles.

Australia, heavily reliant on exports of coal and gas, has been targeting carbon capture and storage as well as hydrogen development to help cut emissions, while still allowing for the use of gas and coal.

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