Damon Mcknight
On April 11, 2024, Australian Prime Minister Anthony Albanese announced a new industrial policy for the country, the Future Made in Australia Act, with a A$22.7 billion push to redefine policy, achieve carbon neutrality, and harness resources. The policy aims to help Australia transition to a more carbon-neutral economy, take advantage of its natural resources, and contribute to a more resilient supply chain in critical minerals and goods associated with green energy. The plan includes targeted finance and investments in sectors such as battery manufacturing, renewable hydrogen, and critical minerals processing. The Climate Council has praised the move, noting that Australia has the potential to play a significant role in cutting climate pollution and seizing the opportunities presented by the global clean energy transition.
| Characteristics | Values |
|---|---|
| Name of the Act | Future Made in Australia Act |
| Announced By | Prime Minister Anthony Albanese |
| Announced On | April 11, 2024 |
| Investment | A$22.7 billion |
| Aim | To redefine policy, achieve carbon neutrality, and harness resources |
| Specific Areas of Investment | Battery manufacturing, renewable hydrogen tax incentives, tax incentives for critical minerals processing |
| Investment Source | Private sector |
| Government Funding Use | Research and development, training, boosting pre-competitive geoscience data |
| Bill Introduced On | July 3, 2024 |
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What You'll Learn
'Future Made in Australia' Act
On 3 July 2024, the Australian Government introduced the Future Made in Australia Bill 2024, signalling a shift in industrial policy for the nation. The Bill, yet to become law, is a part of the National Interest Framework that supports government consideration and decision-making on significant public investments. The Future Made in Australia Act aims to help Australia transition to a carbon-neutral economy, leveraging its natural resources to integrate into the global green economy supply chain and enhance its resilience and security.
The Act includes a A$22.7 billion package of commitments to maximise the economic and industrial benefits of the global shift to net zero. This involves investments in sectors where Australia has natural resource advantages, providing a competitive edge in green tech-related industries. Specific areas of investment include:
- A$549 million over 8 years for battery manufacturing
- A$8 billion in renewable hydrogen tax incentives over 10 years
- A$7.1 billion over 11 years in tax incentives for critical minerals processing
- $1 billion for solar manufacturing
- $500 million to make batteries
The Act will give the federal government the power to identify and invest in projects in Australia's 'national interest'. This includes investments in green hydrogen, critical minerals, and other clean manufacturing industries. The Australian government recognises the need to adapt to the changing global economic landscape and secure its place in the transition to net zero.
The Future Made in Australia Act is a response to similar policies in other nations, such as the US Inflation Reduction Act and CHIPS and Science Act, and China's subsidisation of green tech and electric vehicles. By adopting a new industrial policy, Australia aims to create quality jobs, assure a market for locally produced raw materials, and secure a more prominent role in global supply chains.
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Clean energy
Australia has been dubbed a future clean energy "superpower", with its vast resources of wind and sun, as well as rich mineral deposits like iron ore, aluminium, and lithium. However, research suggests that other nations will outperform Australia in the realm of renewable energy production. The shift towards clean energy in Australia is well underway, driven by governments, communities, and households working together to meet climate pollution reduction targets.
The country's energy mix is undergoing a significant transformation, with fossil fuels contributing 63% of Australia's electricity in 2023, while renewables contributed 37%. This balance is expected to shift drastically by 2035, with coal and gas generation exiting the power system and being replaced by a mix of renewables and flexible technologies. Australia has set ambitious targets for renewable energy, with Labor aiming for 82% renewables by 2030, although this goal is facing challenges and is considered behind schedule.
To achieve net-zero emissions, Australia needs to invest in and scale up several key technologies, including renewable power, electric vehicles, battery energy storage, nuclear energy, carbon capture, hydrogen, sustainable aviation fuels, heat pumps, and power networks. Nuclear energy, in particular, has been a topic of discussion, with some advocating for its adoption due to its zero-emissions nature, safety record, and proven technology, while others argue that renewables are the endgame.
The development of hydrogen-intensive export sectors is another area of focus for Australia's clean energy future. By producing a surplus of electricity from renewable sources and exporting it as hydrogen, Australia could lower electricity costs and benefit the broader economy. Additionally, there is talk of exporting renewable energy directly via undersea electricity transmission cables, further contributing to Australia's clean energy prospects.
While Australia has the potential to become a clean energy leader, it faces competition from other nations that can produce renewable energy at lower costs. To stay competitive, Australia needs to focus on making its installation sector more efficient, identifying necessary workforce skills, and ensuring a sufficient labour force to keep pace with the global transition to clean energy.
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Carbon neutrality
On April 11, 2024, Australian Prime Minister Anthony Albanese announced the "
The Australian government has committed to a A$22.7 billion package to support this transition. This includes investments in battery manufacturing, renewable hydrogen tax incentives, and tax incentives for critical minerals processing. The government aims to maximise the economic benefits of the move to net zero and secure Australia's position in the changing global landscape.
To achieve carbon neutrality, businesses and organisations play a crucial role. The Climate Active initiative offers certification to entities that meet the requirements of the Climate Active Carbon Neutral Standard. This involves measuring and reducing emissions, offsetting remaining emissions through carbon credits, and publicly reporting on their achievements.
The Net Zero Plan provides a detailed policy framework to guide investment in the transition to net zero. Australia, as a signatory to the Paris Agreement, has committed to holding the increase in global average temperatures to below 2 °C and pursuing efforts to limit it to 1.5 °C. The government's ambition is to make Australia a renewable energy superpower, creating new jobs and industries while addressing the challenges posed by climate change.
The Future Gas Strategy, Carbon Leakage Review, and the New Vehicle Efficiency Standard are additional initiatives contributing to Australia's path towards carbon neutrality and a more sustainable future.
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Green tech
In 2022, the Albanese government announced a $500 million AUD investment in the Powering Australia Technology Fund, leveraging capital from private investors. The government also established a $740 million investment fund for developing green and low-emissions technology, with the private sector matching public contributions. Additionally, the Future Made in Australia Innovation Fund includes $500 million for clean energy technology manufacturing and $250 million for low-carbon liquid fuels.
Australia's GreenTech sector is attracting significant attention and investment, particularly in AgriTech, Clean Energy, Energy Storage, EV, and Smartgrid. The country's agricultural industry, which utilises 55% of its land, presents ample opportunities for optimisation through AgriTech. Australia's high solar radiation levels have driven the popularity of solar energy, with 24% of the country's electricity coming from renewable energy sources in 2022.
Australian start-ups are at the forefront of GreenTech innovation. Goterra, for example, combines AgriTech and BioTech to address food waste with insects and robotics, reducing the need for other waste management solutions. AgriDigital, another start-up, offers grain management software to secure and streamline agriculture supply chains. Hysata, backed by prominent investors, is focused on green hydrogen production, while Relectrify is revolutionising battery energy storage with its CellSwitch™ technology, enhancing energy efficiency and battery life.
Australia's commitment to a greener future is evident through its policies and investments. The country is poised to become a GreenTech hub, fostering innovation and sustainability across various sectors, including energy, food, and agriculture.
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Climate pollution
Climate change is a pressing issue in Australia, with the country facing significant environmental challenges such as unprecedented wildfires, heatwaves, floods, droughts, and the spread of climate-sensitive infectious diseases. Despite these issues, Australia's response to the climate crisis has been inadequate, influenced by political changes, public sentiment, and global developments. As the third-largest fossil fuel exporter, Australia's total GHG footprint contributes about 4.5% of global fossil fuel CO2 emissions. The country's support for the fossil fuel industry and reliance on coal and gas exports remain barriers to transitioning to cleaner energy sources.
Recognizing the need for change, the Australian government has introduced the "Future Made in Australia" act, a A$22.7 billion initiative that aims to transition to a carbon-neutral economy and harness its natural resources to integrate into the global green economy supply chain. This includes investments in battery manufacturing, renewable hydrogen tax incentives, and critical minerals processing tax incentives. The plan focuses on maximizing the economic and industrial benefits of the move to net zero and securing Australia's position in a changing global landscape.
However, Australia still has work to do to address its climate policies and meet its renewables targets. The Albanese government must strengthen its climate action to withstand global scrutiny as it campaigns to host COP31 in 2026. Australia's current long-term emissions reduction plan sets a net-zero emissions target for 2050, but it relies heavily on global technology trends, carbon offsets, and unknown future technologies. There are no plans to phase out coal or curb fossil fuel exports, and the country's flagship industrial emissions policy allows for increased fossil fuel emissions.
To effectively address climate pollution, Australia needs to implement concrete actions and comprehensive adaptation strategies. A collaborative approach involving all levels of government is crucial to preventing, mitigating, and adapting to the health impacts of climate change, ensuring that Indigenous Australians are not left out of these efforts. By focusing on renewable energy sources and reducing reliance on fossil fuels, Australia can contribute to global efforts to limit warming and transition to a more sustainable and resilient future.
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Frequently asked questions
The "Future Made in Australia" Act is a $22.7 billion push by Prime Minister Anthony Albanese to redefine policy, achieve carbon neutrality, and harness resources. The Act is designed to maximise the economic and industrial benefits of the international move to net zero and secure Australia’s place in a changing global economic and strategic landscape.
The "Future Made in Australia" Act is a key part of how Australia is responding to the massive changes taking place globally. The Act will help Australia cut climate pollution, generate clean jobs, and ensure a brighter future for future generations.
The rationale behind the "Future Made in Australia" Act is to help Australia transition to a more carbon-neutral economy and take advantage of its natural resources to better integrate into the global green economy supply chain.
