GOVERNMENT moves to sell exploration rights on the seabed for underground storage of carbon emissions have been slowed by the complexity of framing regulations to govern the new system.

Nearly a year ago, Resources Minister Martin Ferguson told The Australian he planned to auction exploration licences as early as last December after creating world-first legislation governing carbon capture and storage.

Despite releasing 10 areas for expressions of interest in March, no permits had been issued as of yesterday.

Mr Ferguson said he could not issue any permits until regulations were finalised.

“This is progressing well and involves further consultation with interested parties such as the petroleum industry and state governments,” Mr Ferguson said.

The Government sees carbon capture and storage as the key to allowing a transition to a low-carbon-emissions economy without shutting down the coal industry at a cost of tens of thousands of jobs and massive export revenue.

The emerging technology, which is being tested in several Australian locations, involves capturing carbon emissions from power station smokestacks and pumping them into undersea structures similar to those that store oil and gas.

While the Government and the coal industry see the successful commercialisation of the technology as crucial, the environmental movement and the Greens favour phasing out coal-fired power generation in favour of cleaner energy sources.

The Government, which has attempted to provide leadership on clean coal technology by convening an international research partnership, needs to make progress on the issue to bolster its credibility in tackling climate change, particularly after announcing on Monday it would delay plans to start a carbon emissions trading scheme next year. Instead, the scheme will begin in 2011.

Government sources insisted yesterday that Mr Ferguson’s failure to secure early finalisation for regulations surrounding undersea carbon storage was not an indication that successful commercialisation of the technology was unlikely.

They said the delay was similar to that normally experienced when governments released the seabed for petroleum prospecting. “It takes around 12 months from initial announcement through to assessment of bids and awarding of leases,” said one source. “Companies have to undertake detailed geological and commercial assessments of the sites in question.”

Areas included in the 10 released for assessment in March were off Victoria, South Australia, Western Australia and the Northern Territory.