Australia will miss its climate targets unless it can attract more than $400 billion in new energy investment, the federal government has been warned.
Clean Energy Investor Group modelling shows scenario planning for the national electricity market won't be consistent with growing global ambitions to limit global warming to 1.5C.
The independent advocacy group is calling for greater investment in big batteries to back up a renewable grid, faster construction of transmission infrastructure and subsidies to get the first offshore wind farms built.
It calculates an additional $421 billion will have to be pumped into proven wind, solar and battery technology if the nation is to align with advanced economies on climate change goals.
With two of the country's biggest coal-fired generators - Liddell and Eraring in NSW - soon to exit the grid, NSW is also being urged to accelerate new clean energy projects.
The Climate Change Authority warned in a separate report that without climate engineering technologies, emissions reduction targets won't be met.
Technically feasible, cost-effective and socially acceptable routes to net zero must combine ambitious emissions reductions with "carbon dioxide removals" at far greater scale, the federal body said on Monday.
Its research concludes that while no single technology will be a 'silver bullet', carbon storage will be essential in line with CSIRO advice to government.
"While reducing emissions at source is critical, the extent of the climate challenge means there must be effort directed to sequestration," CCA head Brad Archer said.
The United Nations Intergovernmental Panel on Climate Change estimates that for a 50 per cent chance of limiting global warming to below 1.5C, about six billion tonnes of emissions must be removed globally per year by 2050.
Australia has significant capacity for carbon to be pumped deep underground and vast marine areas available, according to the CCA.
Climate Change Minister Chris Bowen's office said the 43 per cent emissions reduction target and safeguard mechanism provided industry with the incentive to reduce emissions, either through on-site emissions reduction or sequestration.
"Credible CCS that effectively sequesters carbon can and should play a role in Australia's emissions reduction," a spokesperson said.
"And the Albanese government has focused commonwealth funding support on carbon capture technologies in hard to abate sectors like cement manufacturing, and negative emissions technologies."
So-called negative emissions technology sucks carbon out of the atmosphere and stores it in a geological, biological or mineral mass for long periods of time.
Engineered technologies are expected to account for an increasingly larger share - overtaking nature-based carbon storage - and become a global industry.
The gas industry says the revamped safeguard mechanism for heavy industry also strengthens the case for a greater focus on carbon capture to reduce emissions.
"But government leadership is critical," Australian Petroleum Production and Exploration Association CEO Samantha McCulloch said.
Ahead of next month's federal budget, pressure is growing for industry handouts to support carbon capture utilisation and storage (CCUS).
"Governments around the world are rapidly increasing their support for CCUS, with the Inflation Reduction Act in the United States a game changer, providing significant financial incentives for large-scale deployment of the technology," Ms McCulloch said.
Key trading partners are expected to drive international demand for sequestration, and the climate authority wants Australia to take the lead on new global standards.
With limited storage capacity of their own, Japan and Singapore may need to export carbon to meet international climate pledges.
But rather than backing costly new technologies, the investor group recommended decarbonisation of the electricity sector offered the biggest opportunity, particularly for transport and heavy industry.
Australian Associated Press
