The objective of the audit was to assess the effectiveness of the Department of Industry, Innovation and Science's implementation and evaluation of the Low Emission Technologies for Fossil Fuels (LETFF) program. To form a conclusion against the audit objective, the ANAO adopted the following high level criteria:
- has program funding been allocated effectively;
- has the department responded effectively to the changing policy and funding environment; and
- have LETFF program outcomes been monitored, evaluated and reported on.
The National Low Emissions Coal Initiative (NLECI) program and the Carbon Capture and Storage (CCS) Flagships program have been operating for almost a decade, during which time the department's approach to governance has improved. However, key performance measures for the programs provide limited insight into the extent to which the programs are achieving the LETFF strategic objective of accelerating the deployment of technologies to reduce greenhouse gas emissions.
Funding under the NLECI program was originally directed towards five election commitments, three of which were unable to be fulfilled due to technical and/or financial reasons. The selection of replacement projects was not supported by a clear strategy, and therefore their alignment to the original election commitments is unclear.
Key program governance documents, such as program guidelines and risk management plans, were not developed at the commencement of the NLECI program, however improved governance arrangements were put in place later on in the program.
The process designed to assess and select projects under the CCS Flagships program was sound, and was supported by clear eligibility and selection criteria; technical and commercial advice; and risk management and probity arrangements. Process transparency would have been improved with earlier communication to applicants on the selection criteria weightings.
The CCS Flagships projects are yet to reach the stage of deployable technology as originally envisaged in the program design. It is unclear whether the program is capable of delivering on its strategic policy objective as the program is due to close in 2020, and all program funding is currently committed.
There have been ongoing reductions in the available funding for each of the NLECI and CCS Flagships programs which have not been supported by a strategic approach to applying remaining funding across the projects. Additionally, although both programs were designed on the premise of receiving funding contributions from participating states and territories as well as private sector entities, this was not achieved to the level originally envisaged.
The department reports at a project level on progress and the funds expended. However, this reporting does not provide visibility and oversight of program achievements against its strategic objectives. In addition, the department has not applied its evaluation strategy to the LETFF programs. Consequently, reporting and evaluation does not provide insights into the programs' contribution to advancing/accelerating the demonstration of low emission technologies; nor does it inform decisions on the future of the programs.