The Federal Minister for Resources and Energy, Martin Ferguson AM MP and the Victorian Minister for Energy and Resources, Peter Batchelor, welcome news that detailed monitoring of the Otway Basin Project reveals CO2 has been successfully injected two kilometres underground and is behaving as predicted.

Operated by the Cooperative Research Centre for Greenhouse Gas Technologies and funded in part by the Federal ($25 million) and Victorian ($6 million) governments, the Otway Project in south-western Victoria is the world's largest demonstration of geological storage of CO2.

Minister Ferguson said: "Monitoring equipment located within the storage formation has confirmed the injected CO2 is slowly moving through the formation at the rate and in the direction researchers predicted. It is very encouraging that Otway is showing signs of success and that CO2 is being stored safely and securely.

"The Australian Government has committed to reducing Australia’s CO2 emissions by 60% (on 2000 levels) by 2050 and we will next week deliver our Carbon Pollution Reduction Scheme White Paper. Carbon capture and storage (CCS) may allow Australia to reduce greenhouse gas emissions while protecting our emissions-intensive industry and economic security."

CCS involves capturing carbon emissions before they are released into the atmosphere and injecting and storing them deep underground in geological formations similar to those which have stored oil and gas for millions of years. The Otway project opened in April 2008 and has so far stored more than 30,000 tonnes of CO2.

The Australian Parliament last month passed pioneering legislation to establish the world’s first regulatory framework for CCS and in October Victoria became the first state to pass stand-alone legislation allowing for CCS projects.

Minister Batchelor said: “CCS has the potential to make the deep cuts in greenhouse emissions from power production as the country moves towards a low-carbon future. One of the biggest environmental challenges we currently face is the management of our CO2 emissions.

“By providing the legislative foundation in Australia we are leading the world in CO2 storage and have made significant progress towards demonstrating its potential through large-scale commercial projects.

"The Victorian Government is taking action to meet the climate change challenge and create a clean energy future for Victoria. We are working to ensure Victoria continues using its world-class brown coal and gas resources to generate affordable and reliable energy and that we capitalise on emerging low emissions coal opportunities.”