- Introduction and initial Committee reflections
Overview
1.1Global efforts to reduce greenhouse gas emissions and commitments to achieving net-zero emissions are transforming world trade. As a result, demand for Australia’s traditionally emissions-intensive export industries is changing as many countries, including Australia’s major trading partners, seek to replace their imports with ‘green’ alternatives to assist them to reach their decarbonisation goals.
1.2To remain competitive in the future global green economy, Australia must realise its potential to transition to a green energy superpower. Australia is well-placed to utilise its strengths and comparative advantages to establish export-oriented green energy industries that can meet the needs of its major trading partners. In doing so, Australia would play a role in global decarbonisation well beyond the size of its emissions and economy, and it would leverage its position to be a trusted, reliable and influential trading partner.
1.3Activities are already underway to accelerate the transition, support existing industries to decarbonise, and to develop new emerging green industries. Australia is utilising its existing trade and investment architecture as well as its strong relationships with trading partners to leverage opportunities in the global green economy. Several global trade and investment trends in supply chain diversification, green energy competition, and carbon border tariffs also present both risks and opportunities for Australia.
1.4Australia has many opportunities, based on its strengths and competitive advantages, to decarbonise the domestic economy and develop export-oriented green industries. These include further expanding solar and wind energy generation, extraction and processing of raw minerals, value-added manufacturing in the critical minerals value chain, direct energy imports, green metals and carbon capture and negative emissions technologies. While the Committee acknowledges some of these activities in this report, it recognises the much broader scope of work that will be vital to Australia’s green energy future.
1.5While some activities are underway, many of Australia’s most prospective green energy opportunities are in the early stages of development. The Australian Government can encourage investment to assist and accelerate emerging green technologies and industries through taking actions to reduce risk, provide greater certainty, and improve awareness of opportunities. Public funding and investment initiatives, enacting targets, strategies and improved coordination, and certification, promotion and awareness building can all contribute to ensuring Australia maximises its green energy opportunities.
1.6However, the transition will not be without challenges. Broader issues regarding the decarbonisation of Australia’s electricity grid, regulatory and approval processes for green energy projects, environment and land use, social licence and community engagement, workforce skills and capability, and supply chain constraints need to be considered to ensure the transition benefits all Australians.
About this inquiry
Objectives and scope
1.7On 11 October 2022, the Joint Standing Committee on Trade and Investment Growth (the Committee), adopted the inquiry following a referral from Senator the Hon DonFarrell, Minister for Trade and Tourism.
1.8The Committee primarily focused on how trade and investment can support Australia’s transition to a green energy superpower with regards to Australia’s strengths. Noting the broader context of global greenhouse gas emissions reduction and Australia’s commitment to achieving net-zero emissions by 2050, the Committee also considered:
- Trade and investment activities that are already having a positive impact
- Emerging and possible future trends, such as new opportunities presented by Australia’s critical minerals; green hydrogen, and green metals
- The role for the Australian Government and key departments and agencies in identifying new trade and inward investment opportunities, and assisting Australian companies to access these opportunities
- Areas of growth, and how these can be accelerated or assisted, such as through the use of Commonwealth Special Investment Vehicles
- How Australia can capitalise on existing and future trade agreements and economic frameworks.
- Much of the evidence received throughout the inquiry addressed Australia’s transition to a green energy superpower with respect to the terms of reference. However, the Committee also received and considered a significant amount of evidence that queried the need to transition to green energy and the feasibility to achieve this. Although these matters were not articulated in the terms of reference and therefore not a focus of the inquiry, the Committee acknowledges that the transition to green energy, based on renewable electricity, presents important issues and challenges.
- The transition towards green energy is dynamic. While the inquiry was taking place, there were regular announcements of relevant new initiatives, policies, agreements, research and reports. Where possible, the Committee has attempted to reflect new or updated Australian Government policies. However, readers of this report should consult websites of relevant Australian Government departments and agencies to find out more information about the status of particular policies.
- State and territory governments play a vital role in Australia’s transition to a green energy superpower. In this report, the Committee has not attempted reflect the policies and programs of states and territories. However, the Committee would like to acknowledge the considerable work of all governments across the country to accelerate the green energy transition and encourage the development of emerging industries and technologies.
Terminology
1.12Throughout the inquiry, submitters and witnesses used a range of terminology including ‘green energy’, ‘clean energy’, ‘renewable energy’, ‘zero-emissions’, ‘low-emissions’ and ‘zero carbon’. The Committee notes that the terms ‘green energy’ and ‘renewable energy’ are often used interchangeably and are closely linked, while the other terms may have different meanings depending on how they are used. For example, ‘clean energy’ is often used interchangeably with ‘green energy’ while also being used to refer to lower-emissions versions of high-emissions technologies, including when used in conjunction with carbon capture and storage technology.
1.13This report predominantly uses the term ‘green energy’ for consistency with the inquiry’s terms of reference. For the purposes of this report, the Committee considers the term ‘green energy’ to refer to energy resources and technologies utilising renewable sources, such a wind, solar and hydro power, as well as derivative products such as green hydrogen.
1.14The Committee has attempted to retain original terms used by submitters and witnesses in quotes. While these terms may have different meanings, the Committee has endeavoured to use terms in the context in which they were intended. The Committee uses the term ‘green energy’ in summarising evidence, where appropriate.
Conduct of the inquiry
1.15On 18 October 2022 the Committee issued a media release to announce the inquiry and call for submissions. The Committee invited submissions from a range of people and organisations with an interest in trade, investment, energy, mining, critical minerals, technology, research and development by 30 November 2022. This included federal and state government departments and agencies, industry groups and peak bodies, think tanks, academics, unions and the general public. The Committee extended the due date for submissions to 23 December 2022.
1.16The Committee received 126 submissions and an additional 11 supplementary submissions. The full list of submissions and other additional information presented to the inquiry are available in Appendix A.
1.17The Committee held ten days of public hearings:
- 23 November 2022 in Canberra, ACT
- 30 November 2022 in Canberra, ACT
- 10 February 2023 in Canberra, ACT
- 17 March 2023 in Perth, WA
- 31 March 2023 in Canberra, ACT
- 5 April 2023 in Melbourne, Vic
- 6 April 2023 in Macquarie Park, NSW
- 16 May 2023 in Brisbane, Qld
- 17 May 2023 in Gladstone, Qld
- 23 June 2023 in Canberra, ACT.
- A list of witnesses who attended these public hearings is available in Appendix B. Transcripts for all public hearings can be found on the Committee’s website.
- The Committee also attended site visits at Fortescue Future Industries (FFI) in Perth on 16March 2023, and Alpha HPA in Gladstone on 17 May 2023.
Acknowledgements
1.20The Committee would like to thank everyone who provided written submissions and gave evidence at public hearings.
1.21The Committee would also like to express its thanks to FFI and Alpha HPA for facilitating site visits and sharing their experiences with developing new green technologies. These site visits provided the Committee with valuable firsthand insights into the innovative work being undertaken to support Australia’s transition towards green energy.
Report structure
1.22This report is structured in six chapters, including this introduction:
- Chapter 2 outlines the global and domestic context driving Australia’s transition to a green energy superpower with reference to global emissions reduction and net-zero commitments and Australia’s green energy superpower opportunity and potential.
- Chapter 3 explores trade and investment activities that are already having a positive impact supporting Australia’s transition to a green energy superpower and outlines programs and policies delivered by Australian Government departments and agencies.
- Chapter 4 outlines a wide range of current and emerging opportunities that can capitalise on Australia’s strengths to establish export-oriented green energy industries to underpin the transition to a green energy superpower.
- Chapter 5 summarises how the Australian Government’s role in assisting and accelerating emerging technologies could be improved through public funding and investment, enacting targets, strategies and coordination, and certification, promotion and awareness building.
- Chapter 6 summarises key challenges to Australia’s transition to a green energy superpower broadly relating to the decarbonisation of Australia’s electricity grid, regulatory and approval processes for green energy projects, environment and land use, social licence and community engagement, workforce skills and capability, and supply chain constraints.