GLOBAL CCS INSTITUTE LOOKS TOWARD RESTRUCTURING

Trade Group Wants to Transition Away from Government Seed Money in Coming Years 

Tamar Hallerman
GHG Monitor
10/26/12

The Global CCS Institute is restructuring with an eye toward transitioning away from its beginnings as an entity primarily funded by the Australian government to a financially independent organization, according to Institute officials. Government seed money for the Canberra, Australia-based Institute, among the world’s most influential carbon capture and storage trade groups, is expected to expire in 2017. In an interview with GHG Monitor, General Manager for Policy and Membership at the Institute Barry Jones said the group is in the middle of a review process with its members about the direction of the organization’s future. At the Institute’s most recent members meeting earlier this month in Calgary, Alberta, stakeholders discussed a draft strategic plan that defines future priorities and, more broadly, a business model for the organization moving forward, he said. “What we’ve said in that draft plan is that we want to remain a member-based organization, but that probably means that we’ll need to introduce some sort of membership fee in the future,” Jones said. He added that the Institute’s leadership has been examining the organizational structures of similar trade groups as potential models moving forward.

Jones said that it is currently unclear whether any changes will need to be made in terms of the Institute’s scope or size. “It’s a bit early to tell exactly what changes we might have to make in the future, but what is obvious is that in general the members are quite happy with the strategic direction and broad span of objectives for the Institute we sketched out in the draft plan,” he said. “So we’re not envisioning huge changes in terms of the kinds of things we do. It’s more in the matter of working out the details of exactly what activities we might undertake in the future.” He added that the group is planning on finalizing its new strategic plan by the end of the year and will start implementing the blueprint early next year. “We still have a few years to go on the current funding arrangement with the Australian government, but we’re starting the work now to build for the future when that funding does run out and to have a continuing dialogue with members about what the future holds,” he said.

Gov’t Provided $315M to Last Through 2017

The Institute was established by former Labor Party Prime Minister Kevin Rudd in 2008 to help put Australia on the map as a world leader in CCS. The government later allotted $410 million in seed money for the organization, which would be doled out through summer 2013. However, that initial funding was later pared back and reallocated, and the government revised that grant to $315 million, which would be further stretched through June 2017. The original intention was for other governments and organizations to help fund the Institute as well, but that money never came. The U.S. earmarked only $1 million for the Institute, and European Union funding was not seen until recently. None of the Institute’s now 354 members—which span government, industry and research organizations—currently pay for membership, unlike many other trade organizations.

The trade group has been the subject of ongoing criticism from the Australian media regarding its organizational effectiveness and spending practices over the last several years. Prominent news outlets there, including the Sydney Morning Herald and the government-owned news service ABC News, have published stories quoting unidentified ex-staff members who allege that the group has an unclear focus and has “squandered” taxpayer money for “negligible” results to date. In particular, multiple stories highlighted spending on projects outside of the country, such as TransAlta’s now abandoned Project Pioneer in Alberta and Tenaska Energy’s Trailblazer project in west Texas. They also criticized the Institute for what they say are high levels of spending on operational expenses and travel, as well as high pay for its former CEO.

Institute Has Defended its Scope

The Institute, for its part, has long defended its investments as worthwhile toward moving the ball forward on CCS on an international basis. “In a relatively short period of time the Institute has developed extensive expertise in many areas of CCS,” the group said in a statement on its website in June following a round of particularly sharp criticism in the Sun-Herald. It has highlighted its annual “Global Status of CCS” report, as well as memorandums of understanding with entities like the European Union and China’s National Development and Reform Commission, as key successes. “The Institute will therefore be judged on its success in attracting funding from companies and organizations around the world which value its established expertise and services. Indications from recent CEO level discussions with a core group of members in Europe and North America are very positive,” the Institute’s website says. 

Jones said the Institute is addressing the concerns from the Australian public “all the time.” “We have to be mindful of what people want us to spend our money on, and that’s part of the consultation process, determining what is it that people value about the Institute and what is it that we need to do that has some value looking into the future,” he said. “We’re always interested in the views from our funders and from our membership about what it is that we should be doing and spending our money on.”

Australia Sees Broad Environmental Policy Changes

The increased public attention comes as Australia’s majority government continues to push through major environmental policy changes that have shaken up the country’s traditional coal-dominated energy landscape. In July, the government implemented a $23 per ton carbon tax on CO2 emissions from the country’s largest polluters, an amount which will gradually increase through 2015, when it will be transitioned into a cap-and-trade scheme that will eventually link with the European Union’s Emissions Trading Scheme. The Australian government has also put in place a goal to reduce greenhouse gas emissions 80 percent below 2000 levels by mid-century.