Australian federal government’s ARENA plan open to serious legal challenge, says expert

ARENA was designed as Australia’s renewable energy funder but critics say the new regulations are pushing it to invest in polluting technologies. Image: ARENA

A leading Australian barrister and former head of the Law Council of Australia has said the federal government’s plans to invest public money into fossil fuel production could be illegal, is open to serious legal challenge and is “at odds” with the purpose of the Australian Renewable Energy Agency (ARENA).

Climate advocates and lawyers have criticised the conservative government’s attempts to restructure Australia’s renewable energy funder, ARENA, by directing it to fund carbon capture, fossil fuel hydrogen and ‘low emission’ technologies.

On top of that, a Liberal Party-led Senate Committee delivered a firm rejection of the new regulations for a third time on Wednesday (29 September), labelling them inappropriate and unlawful.

“Second Regulations bear many similar, and some identical, features to the Australian Renewable Energy Agency Amendment Regulations 2021 […] which were disallowed by the Senate on 22 June 2021,” said the advice published 30 September.

And now two prominent legal counsels have advised that the regulations are open to legal challenge on multiple fronts. 

Legal advice from Senior Counsel Fiona McLeod and Julian Murphy, sought by climate action group Environmental Justice Australia, found the move was “at odds” with the purpose for which ARENA was established and “thus potentially beyond regulation-making power”. 

“The legal risks of this latest attempt to recast ARENA to fund fossil fuel technologies are now abundantly clear. For ARENA, there may well be questions about the certainty of any actions it has taken or will take based on the government’s new regulation,” said Environmental Justice Australia’s senior climate specialist lawyer, Hollie Kerwin.

“Diverting ARENA makes no sense, and it’s likely illegal. ARENA was set up to focus on renewable energy and its success has been a big factor in Australia’s enormous renewable energy gains,” said Australian Conservation Foundation climate change and clean energy programme manager, Gavan McFadzean.  

“ARENA needs to remain Australia’s renewable energy agency, not a diluted agency expected to be the funding vehicle for all the energy minister’s pet programmes.”