The CarbonNet project in Victoria’s Gippsland Basin has successfully injected its first carbon dioxide into deep offshore geological formations, marking an important milestone for carbon capture and storage technology in Australia.

The project captured CO2 from several industrial facilities in the Latrobe Valley, compressed it, and transported it via pipeline to an offshore platform where it was injected into porous rock formations more than 1,500 metres below the seabed. The formations previously contained natural gas and have demonstrated capability to trap CO2 permanently.

Initial injection rates are modest, about 100,000 tonnes of CO2 per year, but the project is designed to scale up to 5 million tonnes annually. That would make it one of Australia’s largest carbon storage operations and provide essential infrastructure for decarbonising regional industry.

Why Carbon Storage Matters

Many industrial processes produce CO2 emissions that are difficult or impossible to eliminate through electrification or other approaches. Cement manufacturing, steelmaking, and chemical production inherently generate CO2 as part of chemical reactions, not just from energy use.

For these industries to achieve net-zero emissions, carbon capture and storage provides one of the few viable pathways. CO2 is captured from industrial exhaust streams, compressed into liquid form, transported to storage sites, and injected into geological formations where it remains trapped permanently.

The technology has been demonstrated at scale internationally, with large projects operating in Norway, Canada, and the United States. But Australian deployment has been limited despite suitable geology. The Gippsland project represents an important step toward establishing domestic carbon storage capability.

Victoria’s Latrobe Valley hosts coal-fired power generation, brown coal mining, and industrial facilities that collectively produce about 50 million tonnes of CO2 annually. As power generation transitions to renewables and industrial facilities face decarbonisation pressures, carbon storage could play a role in the region’s transformation.

Dr James Foster, who directs the CarbonNet project for the Victorian government, said the successful injection validates geological models predicting that Gippsland formations can store CO2 safely and permanently. The project includes extensive monitoring to verify CO2 remains contained and detect any issues immediately.

Technical Implementation

The carbon capture facilities use amine-based chemical absorption, the most mature capture technology. Industrial exhaust gases pass through chemical solutions that selectively absorb CO2. The CO2-rich solution is then heated to release concentrated CO2 gas, which is compressed into liquid form for transport.

Capture efficiency exceeds 90%, meaning more than 90% of CO2 in exhaust streams is captured. The remaining 10% is released, along with emissions from the capture process’s energy requirements. Overall, the system reduces total emissions by about 80% compared to uncontrolled facilities.

The 65-kilometre pipeline transports liquid CO2 from capture facilities to the offshore injection site. The pipeline operates at pressures around 150 bar, keeping CO2 in dense liquid phase. Multiple compressor stations maintain pressure along the pipeline route.

The injection well penetrates to formations identified through decades of oil and gas exploration in the basin. These formations have high porosity and permeability, allowing CO2 to spread through the rock. Overlying impermeable caprock prevents upward migration, trapping CO2 permanently.

Monitoring systems include seafloor sensors detecting any CO2 leakage, pressure and temperature measurements in the injection well, and periodic seismic surveys imaging how CO2 spreads through the formation. This comprehensive monitoring provides confidence that storage is functioning as designed.

Storage Capacity

Geological surveys estimate the Gippsland Basin could store 300-500 million tonnes of CO2, enough to support decades of industrial emissions capture at Victoria’s current industrial emissions rates. Multiple formations at different depths offer storage potential, though not all have been developed yet.

The initial project uses one formation with well-characterised properties from historical gas production. As confidence builds and additional capacity is needed, other formations can be brought into use. This staged approach manages technical and financial risks.

Storage capacity depends on how much CO2 can be dissolved in existing formation water and how much can occupy pore space. Injected CO2 initially exists as a separate phase from formation water, but over decades to centuries it gradually dissolves. Dissolved CO2 is more stable and reduces risk of leakage.

Reservoir simulations model how CO2 will spread through formations over centuries. The models predict that CO2 will remain within the target formations, gradually dissolving and eventually reacting with minerals to form stable carbonate minerals. This mineralization process provides permanent storage over geological timescales.

Economic Considerations

Carbon capture and storage is expensive. Capture costs typically range from $80-150 per tonne of CO2, depending on concentration in exhaust streams and facility scale. Transport and storage add another $20-40 per tonne. Total costs of $100-190 per tonne exceed current carbon prices in most jurisdictions.

For carbon storage to be economically viable, either carbon prices must rise, or governments must subsidise costs. The Australian federal government’s carbon credit mechanism provides some financial support, but not enough to fully cover costs for most projects.

Victoria’s government has invested approximately $150 million in CarbonNet to date, covering exploration, engineering, and initial operations. Additional funding will be needed to scale up to full capacity. The government views this as infrastructure investment enabling industrial decarbonisation, not a commercial project expected to generate returns.

Industrial facilities using the carbon storage infrastructure pay fees covering operating costs, but initial capital was government-funded. This model is common for early carbon storage projects internationally, with governments providing infrastructure that industry can then use.

As carbon prices rise and more facilities require capture to comply with emissions regulations, the economics should improve. But carbon storage will likely require ongoing policy support, at least until global carbon prices reach levels where economics work without subsidy.

Environmental and Social Aspects

Carbon storage projects face public scrutiny regarding safety and effectiveness. The primary concern is whether CO2 will remain permanently stored or could leak, undermining climate benefits and potentially creating safety hazards if large amounts released suddenly.

International experience shows that properly selected and managed storage sites pose minimal leakage risk. Natural CO2 deposits have remained trapped in geological formations for millions of years. Engineered storage replicates these natural systems.

The monitoring systems provide multiple layers of assurance. Seafloor sensors would detect any leakage immediately. Pressure measurements in the well would indicate problems. Seismic surveys track CO2 movement through the formation. This comprehensive monitoring addresses safety and verification concerns.

Community consultation has been important for the project. Fishing industry representatives initially raised concerns about impacts on marine environments and fishing grounds. The project incorporated fishing industry feedback into design, avoiding sensitive areas and establishing protocols to minimise disruption to fishing operations.

Local communities in the Latrobe Valley have mixed views. Some see carbon storage as enabling continued industrial activity and employment. Others prefer faster transition away from fossil fuel-related industries. The project positions itself as supporting transition by reducing emissions from existing industry while alternative technologies develop.

National CCS Context

Several Australian carbon storage projects are in development beyond CarbonNet. The Moomba CCS project in South Australia is injecting CO2 from natural gas processing. Projects in Western Australia’s Browse and Carnarvon basins target LNG industry emissions.

Australia’s CO2 storage capacity is estimated at tens of billions of tonnes across sedimentary basins around the continent. Most capacity is offshore, which presents technical challenges but avoids land use conflicts.

The federal government identified carbon capture and storage as part of its technology investment roadmap for achieving net-zero emissions. Support includes funding for feasibility studies, shared infrastructure, and carbon credit mechanisms.

However, carbon storage remains controversial in Australian climate policy debates. Environmental groups argue that it enables continued fossil fuel use rather than driving transition to zero-emission alternatives. Industry and some policymakers contend it’s essential for decarbonising heavy industry.

International climate frameworks including the IPCC scenarios for limiting warming rely substantially on carbon storage. Most pathways to 1.5 or 2 degrees of warming include significant carbon storage deployment globally. Whether that deployment occurs at projected scales remains to be seen.

Future Outlook

If the CarbonNet project performs as designed through its initial operating phase, plans call for scaling up to full 5 million tonnes annual capacity by 2028. This would require additional capture facilities and pipeline capacity.

Other industries in the region are evaluating whether to connect to the carbon storage infrastructure. Cement manufacturing and chemical production facilities could use the storage capacity, distributing infrastructure costs across multiple users.

There’s also discussion about using the infrastructure for “blue hydrogen” production, where natural gas is converted to hydrogen with CO2 capture and storage. This would produce low-carbon hydrogen for industrial use or export.

Long-term, some propose using the infrastructure for direct air capture, where CO2 is removed directly from the atmosphere rather than from industrial exhaust. This would enable net-negative emissions, removing more CO2 than emitted. But direct air capture costs currently far exceed industrial capture.

For industrial facilities facing decarbonisation requirements, carbon storage represents one option among several including electrification, process changes, and alternative materials. Strategic advisory services can help evaluate which approaches suit specific circumstances and timelines.

The Gippsland injection milestone demonstrates that large-scale carbon storage is technically feasible in Australian conditions. Whether it becomes widespread depends on policy settings, carbon pricing, technology costs, and how urgently industry must decarbonise. The infrastructure now exists for industrial emissions in one region to be captured and stored. Replicating that elsewhere requires sustained investment and political commitment.