SYDNEY/CANBERRA, May 24 (Reuters) - A Glencore ( GLCNF )

carbon capture and storage project in eastern Australia cannot

go ahead because it could irreversibly harm groundwater used by

farmers, a state government said on Friday, adding that it would

also block similar projects.

Global commodities giant Glencore ( GLCNF ) said the decision by

Queensland was the result of misinformation and political

opportunism and had effectively outlawed carbon capture and

storage projects in the state.

The company's pilot project aimed to pump 330,000 metric

tons of liquefied carbon dioxide from a coal-fired power plant

in southern Queensland into an aquifer 2.3 km (1.4 miles)

underground.

The project "is not suitable to proceed due to potential

impacts on groundwater resources," the state's environment

department said in a statement.

Farm groups had protested that it risked poisoning part of

the Great Artesian Basin, a network of groundwater deposits

spanning much of eastern Australia, supporting agriculture and

communities.

The proposed site was not a contained aquifer and the carbon

dioxide "could migrate, likely causing irreversible or long-term

change to groundwater quality and environmental values," the

environment department said.

Such changes could include greater concentrations of

contaminants such as chloride, sulphate, lead and arsenic, it

said, adding that its decision made clear that other carbon

storage projects in the Great Artesian Basin would not be

viable.

DISAPPOINTING

Governments including Australia's say carbon capture and

storage (CCS) is needed to achieve the world's net-zero goals

and contain global warming. Its rollout has been slow but is

speeding up.

Glencore ( GLCNF ) said its proposal was scientifically robust,

targeted an area with unused, low-quality groundwater and the

carbon dioxide was extremely unlikely to spread significantly.

"The decision is disappointing and comes after a damaging

misinformation campaign and political opportunism," the company

said in a statement.

"The Queensland government has now effectively banned carbon

capture and storage projects in Queensland," it said. "It's now

up to the Queensland government to explain how it's going to

meet its ambitious emissions reductions targets."

Glencore ( GLCNF ) did not say whether it would appeal the decision.

The project would have captured 2% of the emissions of the

Millmerran plant power plant but could eventually have stored

90%, the company said.

Queensland farm group AgForce praised the decision but said

more protection was needed for the basin and it would push for

more federal scrutiny for projects like Glencore's ( GLCNF ).

Australia has one active CCS project, Chevron's ( CVX )

Gorgon, on an island off the northwest coast. Two more are under

construction and 14 are in development, according to the Global

CCS Institute. Most target offshore storage.

Glencore's ( GLCNF ) project is managed by a subsidiary called Carbon

Transport and Storage Corporation (CTSCo). Japan's Marubeni Corp ( MARUF )

and J-POWER each committed A$10 million to it

in 2022.