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Exclusive: Green Day Energy has had its bank account frozen after going into administration amid a legal dispute between its owners

A fledgling “green coal” company owned by two Queensland Liberal National party figures has had its bank account frozen and become mired in legal action, 18 months after being awarded a $5.5m commonwealth grant in the dying days of the Morrison government.

Guardian Australia can reveal the federal government is “considering its position” in relation to the grant to Green Day Energy, after the company was placed in voluntary administration by director David Hutchinson, the former LNP president. Hutchinson is being sued by Green Day’s largest shareholder, Brad Carswell, a former party official and candidate.

The company was registered with the Australian Securities and Investments Commission three days before Christmas in 2021 – the same day that the federal government released the grant guidelines for its “securing raw minerals program”.

In April, a week before the Morrison government went into caretaker mode, Green Day Energy was awarded $5.5m from that program – the equal largest individual grant to any company – to build a biomass plant in the north-west Queensland town of Richmond.

The project would involve converting prickly acacia, an invasive outback weed, into woodchip pellets with properties similar to coal. It had backing from the local council and Central Queensland University.

The grant was approved by the then minister for regionalisation, Bridget McKenzie, after being assessed by the government business grants hub and reviewed by a committee.

McKenzie made several election announcements in the following weeks about regional businesses awarded money from the $29m securing raw minerals program. The grant to Green Day Energy, however, does not appear to have been announced publicly until after the election.

A spokesperson for McKenzie said the office of the former deputy prime minister, Barnaby Joyce, had taken carriage of an announcement because McKenzie was not visiting the region.

“To the best of our recollection the former minister did not meet or speak with Green Day Energy prior to the grant being awarded,” the spokesperson said. “Senator McKenzie was the responsible minister for the program, which was a competitive grants program.”

Take no ‘further step’ in administration

On 5 September this year, Hutchinson called in administrators after NAB froze the company’s bank account, which holds grant money paid by the federal government.

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Response to today's legal decision on the Living Wonders case. Greens Senator Sarah Hanson-Young is spokesperson for the Environment and currently has a Climate Trigger Bill before the Senate.

“Our environment laws are broken so long as they fail to tackle climate change.

“It shouldn’t fall on a small community group to take on the might of the fossil fuel industry and their accomplices in the Federal Government in court.

“The Environment Minister should be on the side of the environment to protect our climate, our rivers, our reef and public safety instead of teaming up with coal and gas companies.

“If Minister Plibersek wants to protect nature and tackle climate change she should work with the Greens and back our Climate Trigger Bill in the Senate as part of the environment law reform she has promised. My door is open for that conversation in good faith.

“Australians voted for climate action at the last election, but every time the Government fights to approve a coal or gas project they are putting Australia at risk of more frequent and extreme bushfires this summer.”

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A repeat of Australia’s worst disasters such as Cyclone Tracy and Sydney’s giant hailstorm in 1999 would hit the economy much harder now, given increased population and the rising costs of rebuilding, the Insurance Council of Australia has said.

The assessment, contained in this year’s insurance catastrophe resilience report, found that Tracy – which killed 71 people and caused $200m in insured losses when it struck Darwin in 1974 – would cause $7.4bn in losses if repeated today. If adjusted only for inflation, the cost would have been $1.78bn.

Sydney’s hailstorm, which cost $1.7bn in insured losses in April 1999, would land a damage bill of $8.85bn if an equivalent event struck now. Had inflation changes only been taken into account, the bill would have been $3.28bn.

Both tallies exceed the $6bn paid out by insurers for the 2022 floods in south-eastern Queensland and northern New South Wales, currently Australia’s costliest disaster. The revised data, modelled by Risk Frontiers, adjusted costs for inflation, changes in property numbers and values and tougher building codes.

ICA’s chief executive, Andrew Hall, said soaring costs associated with extreme events – even before global heating was factored in – should be considered in debates about population growth, especially in the eastern states.

“We’ve got to think about housing that population in safe, durable and insurable homes,” he said. “Otherwise, we’re just setting ourselves up for large costs moving forward, particularly in a changed climate, and it impacts everybody in the insurance market.”

Insurers paid out $1.6bn in claims for the year to June, or just 22% of the record tally for the previous 12 months of $7.28bn.

Hall, though, said insurers were still trying to recapitalise balance sheets after taking a battering over three La Niña years and consumers shouldn’t anticipate lower premiums.

Reinsurance costs have this year risen to 20-year highs, pushing up Australian insurers’ costs by 20-30%. “Australia has been traditionally thought about as a good diversified risk for reinsurance globally,” he said. “Over the last decade, what we’ve seen is reinsurers have reassessed the risk factors in the Australian market and the prices have changed accordingly.

“The cost of rebuilding has gone up enormously,” Hall said, adding insurers were also having to hire and retain more staff to cater for large surges in claims.

Australia already had a notably variable climate – particularly for rainfall – even before climate shifts take effect in a warming world. Rising premiums after disasters are also increasingly putting insurance out of the reach of many Australians.

The Albanese government announced in its first budget last October a five-year, $1bn disaster-ready fund for mitigation infrastructure that was matched by the states and territories. Those funds were inadequate to meet the “enormous” requirements to make at-risk communities more resilient, Hall said.

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The climate change and energy minister, Chris Bowen, has accused the Coalition of using “the rightwing playbook of 2023 – populism, polarisation and post-truth politics” in making false claims about the potential for nuclear power in Australia.

Speaking on Tuesday, Bowen said the opposition’s suggestion the country could embrace the banned energy source to meet climate targets was the “latest attempt at deflection and distraction now that outright denial is less fashionable” and an attempt to “continue the culture climate wars in Australia”.

He said the opposition leader, Peter Dutton, and Coalition energy and climate spokesperson, Ted O’Brien, had made false claims about the role of nuclear energy in Canada, and been dishonest about the comparative costs of nuclear power and renewable energy in Australia.

“In doing so they are using the rightwing playbook of 2023 – populism, polarisation and post-truth politics. These are climate charlatans and it’s time for these games to end,” Bowen told a climate and energy summit hosted by the Australian Financial Review.

“If they are serious about proposing a nuclear solution for Australia, the simplistic bumper stickers and populist echo chamber has to come to an end. Show the Australian people your verified nuclear costings and your detailed plans about where the nuclear power plants will go.

“Dealing with the challenges and opportunities of decarbonising Australian energy, creating jobs and investments and managing this transition is a serious task … requiring serious people and serious plans. The government is providing those plans, the alternative government is not.”

O’Brien told the summit on Monday that Australia needed to consider nuclear energy, which was banned by the Howard government in 1998. He said the Albanese government had “wrongly defined the challenge of net zero by making it all about pouring more renewables on to the grid”.

“To put it candidly: no nuclear, no net zero,” he said.

The Coalition supports a slower exit from coal power, the most polluting source of electricity, and has argued small modular nuclear reactors (SMRs) could be built on the site of coal generators to complement renewable energy and other technology.

SMRs do not currently exist, commercially. The CSIRO said they were in use at two sites, in Russia (on a barge) and China, and both had suffered delays and cost blowouts.

The International Atomic Energy Agency this year reported there were more than 80 SMR designs in development, but only some would be used for electricity generation, and their economic competitiveness was “still to be proven in practice”. The CSIRO found nuclear was the most expensive source of power generation available, and renewable energy the cheapest.

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Most of Australia’s major energy and resource companies have scored no more than a passing grade on their climate policy engagement even though almost all support the Paris climate pact.

A report from the Australasian Centre for Corporate Responsibility (ACCR) examined 50 ASX companies as well as resource giants BHP. Origin, Rio Tinto, Santos and Woodside.

It found the energy corporations had done well when making commitments to climate policy and even had some of the highest lobbying activity of any companies in Australia.

However, they did not follow through on their promises at the same rate nor did they disclose the specific payments they made in their lobbying efforts.

The report said it reflected the fact that commitments were “easier or less costly to make” compared to action.

Origin was the one exception, which scored notably higher than the others because it actioned its climate change commitments.

ACCR company strategy lead Naomi Hogan said the findings showed Australian companies were lagging far behind their US counterparts in disclosing their lobbying .

“While Australia’s major energy and resources companies are big political spenders with large influence on government climate policy, the governance and disclosure of these activities are not up to scratch,” she said.

When it came to disclosing lobbying spend, Australian companies scored in the bottom 20 per cent and none scored as high as even the average score of US companies.

Part of the reason Australia performs so poorly is that disclosure requirements around political spending are less stringent than those in the United States and the United Kingdom.

Insufficient governance causes large gaps between company policies on climate change and the action they eventually take, and can also lead to “greenwashing”.

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Scientists say they have discovered large flows of pollution are reaching the Great Barrier Reef after soaking into underground water, a finding that could have implications for policymakers focused on cutting pollution from river catchments.

The new research claims almost a third of dissolved inorganic nitrogen and two-thirds of dissolved inorganic phosphorus in the reef’s waters are coming from underground sources – an amount previously undocumented.

Controlling pollution running on to the reef from farms has been a major focus for governments and agenciess, with scientists saying improving water quality will give corals a better chance of recovering from bleaching events caused by global heating.

UN science experts have repeatedly raised concerns that progress in improving water quality has been too slow and a failure to tackle the issue alongside the climate crisis could risk the reef being placed on a list of world heritage sites in danger.

Scientists at Southern Cross University, the Australian Institute of Marine Science and CSIRO collaborated on the research, which has been a decade in the making and is published in the journal Environmental Science & Technology.

Researchers took water samples and analysed them for radium isotopes that act as a marker for pollution. The study did not identify the source of the pollution but rather the route it took to the reef.

Dr Douglas Tait, an expert on the chemistry of coastal waters at Southern Cross University and lead author of the research, said the pollutants could take decades to move from farms to underground aquifers before emerging from springs at the coastline and from underwater springs – known as wonky holes – in the reef lagoon itself.

He said it was possible “this could just be the start of the front [of pollution] that is coming through” or it could be the tail-end.

“We could have a significant problem realised in the coming decades,” he said.

Prof Damien Maher, a co-author of the research also from Southern Cross University, said: “Groundwater discharge accounted for approximately one-third of new nitrogen and two-thirds of phosphorus inputs, indicating that nearly twice the amount of nitrogen enters the reef from groundwater compared to river waters.”

Tait said an excess of nutrients could cause algal blooms, promote outbreaks of coral-eating starfish and promote fish disease.

He said the study “underscores the need for a strategic shift in management approaches” to reduce the harm from pollutants.

Tait said there were a range of likely pathways that the pollution could take through groundwater, from moving through cracks and fissures in rocks below the top soil to dripping through porous rocks.

“We’re going to need to have a discussion about how these nutrients are managed. We need a much better understanding of this process so that we can manage it in the future,” he said.

State and federal governments have pledged hundreds of millions of dollars to improve water quality in the Great Barrier Reef.

Dr Stephen Lewis, a reef water quality expert at James Cook University’s TropWATER research group who was not involved in the research, said the study’s claims were surprising and he welcomed the chance to examine the results more closely.