2. Global context and Australia's superpower opportunity

Overview

2.1Australia’s transition to a green energy superpower is set within the context of global commitments to reduce greenhouse gas emissions and achieve net-zero emissions. These commitments are likely to drive change in global energy demand as countries introduce policies to reduce their emissions. Demand for Australia’s traditional emissions-intensive, fossil fuels-based exports, notably coal and natural gas, is anticipated to decline as major trading partners decarbonise their economies and seek to replace their imports with ‘green’ alternatives.

2.2Australia is well-placed to utilise its strengths and comparative advantages to establish export-oriented green energy industries aligned with the needs of major trading partners. In this context, Australia’s transition to a green energy superpower aims to both manage the risk to Australia’s current export portfolio and take advantage of the considerable trade and economic opportunities presented by the shift in global energy demand. Beyond trade and economic benefits, Australia’s superpower ambition can accelerate domestic and global decarbonisation, contribute to energy security and have broader strategic and regional security benefits.

2.3This chapter outlines the global and domestic context driving Australia’s transition to a green energy superpower. In doing so, this chapter discusses:

• Global emissions reduction and net-zero commitments, including with respect to the impact of these commitments on Australia’s export profile.
• Australia’s green energy superpower opportunity, including the potential benefits to Australia such as decarbonisation, economic and trade benefits, energy security, and strategic and regional security benefits.
• Australia’s green energy superpower potential, including Australia’s natural and developed strengths and comparative advantages that form the basis for its transition to a green energy superpower.

Global emissions reduction and net-zero commitments

2.4The Australian Government has legislated under the Climate Change Act 2022 (Cth) its commitment to reduce greenhouse gas emissions by 43percent from 2005 levels by 2030 and to achieve net-zero by 2050.[1]

2.5Countries signatory to the Paris Agreement,[2] including Australia, have set a goal to limit global temperature increases to below 2 degrees Celsius (°C) and to aim for below 1.5 °C.[3] The Climate Council noted that this commitment requires rapid reductions in greenhouse gas emissions this decade and reaching net-zero emissions as soon as possible.[4] A joint submission to the inquiry from the Department of Foreign Affairs and Trade (DFAT), the Australian Trade and Investment Commission (Austrade) and Export Finance Australia (EFA) stated that 140 countries (as at September 2022) have made or have indicated they are considering net-zero emissions commitments, accounting for 90 per cent of global emissions.[5]

2.6Many submitters to the inquiry observed that net-zero emissions commitments will drive a significant shift in global energy demand, with fossil fuel energy in the form of coal, oil and gas expected to decline significantly, while renewable energy and other zero- or low-emissions technologies are expected to increase.[6] Several submitters pointed to the International Energy Agency’s Net Zero by 2050 report, which outlined that in the context of net-zero commitments global demand for coal could be expected to decline by around 80 per cent and demand for gas by half.[7]

2.7Others noted, to varying degrees, that coal and natural gas, particularly with carbon capture and storage technology, will continue to play a role in the global energy mix at least until greater firmed renewable energy capacity is deployed and new technologies are developed.[8] Some stakeholders also noted the ongoing role for nuclear power in the global energy mix.[9]

Impact of global emissions reduction and net-zero commitments on Australia’s exports

2.8Submitters identified that the global transition towards net-zero emissions will have a significant impact on Australia’s current export market.[10] For example, the Grattan Institute emphasised the transition ‘will profoundly change trade’[11] and the Climate Council stated that it ‘… has fundamentally reshaped Australia’s economic prospects.’[12]

2.9Australia’s export profile currently contains a high proportion of fossil fuels, with coal and gas ranked as the second and third largest export earners (see Table 2.1).[13] DFAT, Austrade and EFA advised that in 2021 fossil fuels accounted for 28 per cent of the total value of Australia’s exports, with coal comprising 11 per cent and natural gas 10 per cent.[14]

2.10The Committee received evidence that the high proportion of coal and gas in Australia’s export profile leaves Australia economically vulnerable in the face of the decarbonisation of its major trading partners.[15] Australia’s major trading partners and largest markets for coal and gas exports––China, Japan, the Republic of Korea (South Korea) and India[16]––have made net-zero emissions commitments.[17] Japan and South Korea have set net-zero emissions target dates of 2050, China by 2060 and India by 2070.[18] In total, countries with net-zero emissions commitments represent 97 per cent of the value of Australia’s exports.[19]

2.11Dr Simon Bradshaw, Research Director, Projects at the Climate Council, explained that Australia’s key export markets in China, India, South Korea and Japan ‘… are all effectively calling time on fossil fuels on slightly different trajectories. We will see some fluctuations in the near term, but the direction of travel and the momentum are very clear.’[20]

2.12DFAT, Austrade and EFA advised that in a global net-zero emissions economy, Australia’s coal exports are forecast to fall by 80 per cent by 2050, with China, Japan and SouthKorea accounting for a majority of the reduction in demand.[21] Mr David Woods, Chief Economist and First Assistant Secretary, International Economics and Green Economy Division, at DFAT told the Committee:

… the issue we have … is that our export profile is emissions intensive. Coal and LNG [liquefied natural gas] are two of our top three export earners. What we're very much alive to is that there will be a transition period, that those fuels will continue to be significant export earners for Australia. But as those 140 countries [who have made or have indicated they are considering net-zero emissions commitments], or a significant proportion of them, follow through on their commitments to net zero there is clearly going to be a risk that the markets for those will be diminished.[22]

2.13Additionally, Boundless Earth submitted that Australia will face an inevitable change in the demand for its current exports as trading partners look to decarbonise their operations:

There is … the risk that Australia's biggest exports - which are currently dominated by fossil fuels and high embodied carbon products - are regulated, taxed or even blocked by our trading partners (through mechanisms such as the European Union’s Carbon Border Adjustment Mechanism). The Sunshot report [a 2021 commissioned by the WWF-Australia, the Business Council of Australia, the Australian Council of Trade Unions and the Australian Conservation Foundation] estimates that over 50% of Australia’s existing export value is exposed to risks from the energy transition. Thus, whether or not we proactively seek to transform our economy now, Australia will be forced to restructure the composition of its exports to respond to the decrease in global fossil fuel demand and the increase in emissions reduction ambition.[23]

Australia’s green energy superpower opportunity

2.14Many submitters suggested that while the net-zero emissions commitments and decarbonisation plans of major trading partners present significant risks to Australia’s current export profile, they also present immense opportunities.[24] For example, DFAT, Austrade and EFA emphasised that ‘Australia stands to gain significant economic benefits from the world’s transition to net-zero.’[25] Similarly, the Climate Council declared that ‘Australia is well-placed to thrive in a world shifting toward net-zero emissions.’[26]

2.15It was widely observed that as major trading partners reduce their demand for Australia’s coal and gas, they will seek alternatives to meet their energy needs.[27] Importantly for Australia, many countries with strong decarbonisation goals lack sufficient renewable energy resources to meet domestic needs.[28] The Department of Climate Change, Energy, the Environment and Water (DCCEEW) explained that:

While renewable energy will play a major role in global efforts to reach net-zero emissions, renewable resources are not evenly distributed around the world, and many of Australia’s major trading partners have more limited or expensive renewable energy opportunities.[29]

2.16Consequently, the Grattan Institute observed that countries with lower renewable energy resources ‘… will look to import energy, or energy-intensive commodities, from renewable-rich countries such as Australia.’[30] DFAT, Austrade and EFA explained that: ‘The rapidly growing demand among Australia’s partners for clean energy to help drive their respective decarbonisation agendas presents significant opportunities for Australia as a net energy exporter.’[31]

2.17Ms Rachael de Hosson, Branch Head, Net Zero Innovations and Partnerships Branch at DCCEEW, told the Committee that as countries across the globe, including Australia’s major trading partners, transition to net-zero emissions ‘… there will be many opportunities for Australia to leverage our domestic renewable energy strengths to produce and export energy and energy-intensive products.’[32]

2.18In their analysis submitted to the Committee, Professor Llewelyn Hughes and DrThomas Longden advised that understanding major trading partners’ decarbonisation pathways is vital for managing the risk and taking advantage of the opportunities for Australia in the transition:

There are large uncertainties in the technology pathways selected by Australia’s key trading partners as they decarbonise … Understanding the timing of decreased demand for thermal coal and gas is important in preparing for alternative futures … Information gathering and analysis on regional trading partners’ decarbonisation pathways are crucial for Australia’s existing energy trade, and the new market opportunities emerging as the region decarbonises.[33]

2.19DCCEEW summarised the potential benefits of Australia’s green energy opportunity, stating that it would ‘… contribute to domestic and global decarbonisation efforts, increase energy security for Australia and our international partners, and create new domestic economic opportunities, particularly for our regions.[34]

Decarbonisation

2.20Multiple submitters observed that beyond reducing domestic emissions, Australia’s green energy transition could make a significant contribution to global decarbonisation.[35] Mr David Woods, Chief Economist and First Assistant Secretary at DFAT, told the Committee that ‘… transitioning and diversifying our export base toward green energy exports… will represent a material contribution to global climate action and to the decarbonisation of our trading partners.’[36]

2.21Similarly, the Clean Energy Council suggested that ‘… Australia can play an outsized role in both decarbonising its own economy, and assisting other countries to decarbonise…’[37]

2.22To demonstrate the scale of the potential contribution to global decarbonisation, the Climate Council outlined estimates that an Australian green steel industry exporting to China could reduce global emissions by around two per cent, almost twice as much as Australia eliminating its own emissions.[38] Further, an established green metals industry exporting to Asia could help to cut global emissions by eight percent.[39] Green metals are discussed in more detail in Chapter 4.

Economic and trade benefits

2.23The Committee received considerable evidence that identified the potential for significant economic benefits and job creation from Australia’s green energy opportunities.[40] Many submitters pointed to estimates in the 2021 Sunshot report that green energy export industries could add $89 billion in value to the Australian economy and create 395,000 jobs by 2040.[41] It was also noted that there is potential for substantial economic benefits and opportunities in regional communities and for First Nations people.[42]

2.24In terms of Australia’s exports, Mr Woods suggested that the development of export-oriented green energy industries would have the dual benefit of taking advantage of growth opportunities in the green economy and managing the downside risk of the carbon intensity of Australia’s current export profile.[43]

2.25The Committee received evidence that export-oriented green energy industries could contribute to building Australia’s economic complexity, measured by the number of products a country exports and the number of other countries that export those products.[44] For example, the Australia China Business Council explained to the Committee:

… Australia’s economy lacks both diversification and sophistication. When compared to other nations in our region, such as Singapore, Japan and [South] Korea, Australia’s economic complexity has been declining year on year for 25years. We’ve relied far too much on simply exporting raw commodities and agricultural products… we need to move up the value chain. The good news is the green economy presents enormous opportunity to increase sophistication and complexity of our economy across all sectors. It will enable us to build new industries, achieve higher levels of productivity and be even more internationally competitive.[45]

Self-sufficiency and energy security

2.26Submitters highlighted that the green energy transition and the development of green energy industries could increase Australia’s self-sufficiency and energy security.[46] For example, it was suggested that building domestic manufacturing capacity to make products such as solar panels and batteries would decrease Australia’s reliance on imported products for renewable energy generation and reduce exposure to supply chain risks.[47] The Next Economy stated that green energy manufacturing and processing opportunities ‘… offers Australia the potential to strengthen national sovereignty and self-sufficiency at a time when global supply chains are under pressure.’[48]

2.27The Australian Electric Vehicles Association emphasised that electrification of transport would improve Australia’s energy security by reducing reliance on imported crude oil and refined petroleum.[49] Similarly, Mr James Bowen observed that: ‘An accelerated domestic energy transition could improve Australia’s own energy security… in the context of our inability to maintain sufficient domestic production, refining, or storage capacity for oil.’[50]

Strategic and security benefits

2.28The Committee received evidence that suggested Australia’s transition to a green energy superpower provides broader strategic and regional security benefits.[51]

2.29DCCEEW explained that ‘… energy security is now firmly linked to the energy transition, with major economies taking significant steps to shore up their energy security and resilience, and reduce emissions at the same time.’[52]

2.30DFAT, Austrade and EFA submitted that ‘Australia can become a key partner in Southeast Asia’s energy transition as a supplier of choice for green energy goods and services.’[53] DFAT, Austrade and EFA further explained that where Australia can build export industries consistent with trading partners’ decarbonisation plans, Australia will be directly contributing to both their decarbonisation and their energy security.[54] In this context, Australia’s green energy superpower transition ‘… will provide strategic dividends by supporting partners in the region to decarbonise.’[55]

2.31Mr James Bowen emphasised that for Australia the transition ‘… should be considered as much a foreign as domestic priority, and as much a strategic as economic opportunity.’[56]

Australia’s green energy superpower potential

2.32Australia’s potential to become a green energy superpower is based on vast strengths and comparative advantages. While many strengths are credited to Australia’s natural resources and geography, Australia’s potential is also found on strong resources industry experience and a reputation as a reliable trading partner.

2.33This section summarises Australia’s natural and developed strengths that underpin its potential to take advantage of the global green energy transition and become a green energy superpower.

2.34The Committee received evidence about a wide range of potential green energy export opportunities, built on Australia’s strengths and advantages. Some of these include raw and processed materials (e.g. lithium, nickel), direct energy export (e.g.renewable electricity and hydrogen) and export of manufactured goods (e.g.batteries, green metals). Current and emerging green energy industries and technologies are outlined in Chapter 4.

Australia’s natural strengths

2.35Submitters highlighted Australia’s considerable natural strengths that underpin the opportunity to become a green energy superpower. These include abundant renewable energy resources (solar and wind), a large land mass with low population density, extensive marine jurisdiction, significant critical minerals reserves and geographical proximity to key export markets.[57]

2.36Dr Saul Griffith, Co-founder and Chief Scientist at Rewiring Australia, surmised that Australia’s natural strengths make reaching zero emissions readily achievable, perhaps more so than any other nation in the world, and ‘… in fact, to go beyond that to be able to produce so much renewable energy that we can actually export it in some form.’[58]

Solar

2.37Australia has the highest solar radiation per square metre of any continent in the world.[59] On average, Australia receives 58 million petajoules of solar radiation per year, which equates to more than 10000 times Australia’s total energy consumption.[60] Figure 2.1 shows Australia’s annual average daily solar exposure, with highest exposure occurring across Australia’s northern half.

2.38Solar radiation can be used to produce solar energy, which can then be converted into solar power to create electricity.[61]

Source: Bureau of Meteorology, Average daily solar exposure, www.bom.gov.au/jsp/ncc/climate_averages/solar-exposure/index.jsp, viewed 20 June 2023.

Wind

2.39Australia’s landscape also provides an abundance of wind. A submission from Geoscience Australia provided a map of Australia’s onshore and offshore wind capacity. Figure 2.2 shows Australia’s wind renewable energy capacity factor, with most wind farms located in southern Australia and along the coastline.[62]

Source: Geoscience Australia, Submission 64, p. 8.

2.40Australia’s marine jurisdiction is approximately double the size of Australia’s land mass, and accounts for four per cent of the world’s oceans.[63] Geoscience Australia’s marine data assists with informing offshore wind developments.[64] During the inquiry, the Committee heard from Star of the South Wind Farm Pty Ltd (Star of the South) regarding the development of its offshore wind farm off the coast of Gippsland.[65] This project has potential to supply 20percent of Victoria’s energy needs.[66] The Star of the South project is discussed in more detail in Chapter 4.

2.41Australia’s land mass (7692024km2) makes it is the sixth largest country in the world after Russia, Canada, China, the United States and Brazil.[67] Australia is also endowed with vast geological reserves and mineral resources, including critical minerals. According to Geoscience Australia:

Australia is one of the world's leading producers of bauxite (aluminium ore), iron ore, lithium, gold, lead, diamond, rare earth elements, uranium, and zinc. Australia also has large mineral sand deposits of ilmenite, zircon and rutile. In addition, Australia produces large quantities of black coal, manganese, antimony, nickel, silver, cobalt, copper and tin.[68]

Raw materials and critical minerals

2.42Australia also has an abundance of raw materials that are essential inputs to the production of low emissions technologies that are vital for the world to achieve decarbonisation goals.[69] Geoscience Australia explained that:

Raw materials, including lithium, copper, nickel, silicon, manganese, graphite, rare earth elements and cobalt are the building blocks of clean energy technologies, such as batteries, electric vehicles (EVs), wind turbines and solar panels.[70]

2.43Some of these raw materials are defined as ‘critical minerals’ on the basis that they are both essential for modern technologies, economies or national security and that there is a risk of supply chain disruption or limited availability.[71]

2.44The Australian Government considers 26 resource commodities to be critical minerals.[72] Australia’s list of critical minerals is available in Appendix C of this report. Figure 2.3 shows the location of Australia’s critical mineral deposits and operating mines.

Source: Geoscience Australia, Critical minerals at Geoscience Australia, www.ga.gov.au/scientific-topics/minerals/critical-minerals, viewed 20 June 2023.

2.45Australia’s potential to leverage its critical mineral resources is supported by emerging opportunities to develop Australian processing and value-added manufacturing capabilities. A submission from the Australian Conservation Foundation highlighted that many critical minerals, such as lithium, cobalt and rare earths are needed for specific technologies such as battery storage.[73] Australia’s raw materials and critical mineral resources, notably lithium, are discussed further in Chapter 4.

Geographical proximity to key export markets

2.46Australia’s position within the Indo-Pacific places it in close proximity to key prospective export markets. Australia’s major export markets are listed in Table 2.2.

2.47Some submissions discussed Australia’s geographical advantages. For example, the joint submission from DFAT, Austrade and EFA advised that: ‘Our proximity to North Asian energy import markets including Japan, [South] Korea, Singapore, and Taiwan makes us an attractive location for a future hydrogen industry.’[74]

2.48Fortescue Future Industries (FFI) noted with regard to the hydrogen industry that Australia’s geographical proximity to Asia reduces shipping costs, assisting with viability of an export industry.[75] Dr Andrew Hutchinson, Chief Executive Officer at FFI, explained in relation to potential green hydrogen export markets that:

The distance, obviously, makes a big difference because you have shipping charges in moving that [green hydrogen]. If we’re competing in Australia with Canada or Brazil or Namibia, for example, who are all going to be playing in this space, we have shipping costs to take into consideration as well. Now there are markets which are closer to home which we believe will be big markets for Australia. Singapore, [South] Korea and Japan will be huge markets for us… They need the product to decarbonise their economies… The issue they have is they don’t have any capacity to make it themselves, so they’re going to have to import from places like Australia.[76]

2.49The Australian Hydrogen Council (AHC) noted the costs of renewable energy relative to shipping costs are a factor in the potential expansion of domestic production of a range of energy-intensive commodities such as aluminium.[77]

Australia’s developed strengths

2.50In addition to natural strengths, Australia has several well-developed comparative advantages that further enhance the opportunity to become a green energy superpower. These include Australia’s mining and resource sector experience, a highly educated and skilled workforce, a world-class research and development sector and a stable political environment with strong institutions as well as a strong reputation as a trusted and reliable trading partner, and as an attractive investment destination.[78]

Reputation as a trusted and reliable trading partner

2.51Australia has strong trade relationships with many countries in the Asia-Pacific (seeTable 2.2) and an extensive trade architecture that can be leveraged to meet export opportunities in the global energy transition. The AHC noted that ‘Australia enjoys a reputation as a trusted and respected trading partner.’[79] Further, a submission from the Australian National University’s Zero-Carbon Energy for the Asia-Pacific Initiative (ZCEAPI) highlighted that ‘Australia has already played a leading role in meeting the Asia-Pacific region’s energy and resource needs.’[80]

2.52Australia’s trade and investment architecture is discussed further in Chapter 3.

Source: Department of Foreign Affairs and Trade, Australia's trade in goods and services (a)(b) by top 15 partners, www.dfat.gov.au/sites/default/files/australias-goods-services-by-top-15-partners-2021-22.pdf, viewed 20 June 2023.

2.53Australia has also earned itself a reputation as a trusted and reliable trading partner built on environmental, social and governance standards matching the highest global benchmarks.[81] For example, Ms Simone Spencer, Deputy Director General, Strategy and International Engagement at the Department of Jobs, Tourism, Science and Innovation, Western Australia, highlighted Australia is:

… a very safe and stable place to do business, and those markets that are looking to engage with us are looking for a very long term relationship. I think that us being able to really emphasise that in [the] market is something we have that a lot of our other counterparts don’t.’[82]

Strong mining and resources industry

2.54A number of submitters referred to Australia’s strong mining and resources sector experience forming the basis for the development of green energy opportunities.[83] For example, Geoscience Australia stated that Australia’s ‘… world-class mining equipment, technology and services sector and existing infrastructure mean we are well placed to support the growth in demand for critical minerals and development of green energy technologies.’[84]

2.55Others noted that Australia’s mining and resources sectors are supported by highly trained workers, with many skills being transferable to green energy industries.[85] In relation to the hydrogen industry, several submitters identified the potential benefits of utilising existing ports and pipeline infrastructure as well as expertise from the liquified natural gas sector.[86]

2.56Some submitters encouraged Australia to leverage existing mining and resource strengths to transition to a green energy superpower. For example, MrRowan Moorey, Senior Researcher at Beyond Zero Emissions (BZE), said:

We need to play to our strengths with the resources we've already got. We've had nation-building exercises with iron ore. We export most of the world's iron ore in Australia. There's no reason why we can't make that green ore, but there needs to be a coordinated national approach to doing that.[87]

Research and development

2.57Australian industry is supported by a world-class research and development sector.[88] The Commonwealth Scientific and Industrial Research Organisation (CSIRO) noted that Australia is a world leader in solar photovoltaics technology and minerals science.[89] Similarly, ZCEAPI underscored that ‘Australia is a world-leader in mining technology and Australian developed solar panels dominate global markets.’[90]

2.58Further, Ms Nicola Ison, Head of Direct Advocacy at Boundless Earth, told the Committee ‘Australia has a good reputation… given its critical role since the eighties in developing solar technologies. We have trained so many of the solar engineers globally.’[91]

Capitalising on the opportunity

2.59Submitters highlighted that while Australia is well-positioned to benefit from the green energy economy, it will need to move swiftly to capitalise on the opportunity or it will miss out to countries with similar potential and ambition.[92] For example, BZE summarised Australia’s opportunity and emphasised the need to act:

Global decarbonisation is driving a rapid shift away from fossil fuel dependent industries and exports… Australia has the opportunity to benefit from the transition to a net-zero world by firmly embedding itself within the supply chain of an international zero-emissions economy, supplying critical materials, energy and green commodities to trading partners. Our unique mix of abundant renewable resources, and strong energy and minerals export history give us the perfect platform to drive economic growth at home and decarbonisation around the world, but we must act now.[93]

2.60Ms Kylie Walker, Chief Executive Officer at the Australian Academy of Technological Sciences and Engineering, told the Committee that if Australia misses the opportunity to maintain its role as a ‘… world energy superpower, the global economy will move on and Australia will be left behind. By acting now we can leverage our natural advantages to become a global leader in green energy exports.’[94]

2.61Similarly, the Climate Council noted the cost of not embracing the green energy transition and declared that Australia could miss out on the opportunity:

Australia will need to move fast to seize the economic opportunities of the global transition to net-zero emissions. While we have commercially significant advantages in renewable energy, the rest of the world is not waiting for Australia to develop new clean energy industries… If we don’t lean in, we could miss out on a once-in-a-generation opportunity to develop new vibrant export industries.[95]

Committee comment

2.62The Committee notes the importance of the Australian Government’s legislated commitment to reduce emissions by 43percent from 2005 levels by 2030 and to achieve net-zero emissions by 2050. These commitments provide certainty and a framework to reduce domestic emissions and enhance Australia’s engagement in a decarbonising global economy.

2.63The Committee recognises that global emissions reduction efforts and net-zero commitments are likely to result in a global shift in energy demand, and that the decarbonisation of Australia’s major trading partners will have an impact on Australia’s emissions-intensive export profile.

2.64The Committee notes with some concern that while the direction of Australia’s major trading partners toward decarbonisation is clear, the timing and pathways remain uncertain. As Australia’s export profile is strongly linked to the decarbonisation pathways of its major trading partners, the Committee believes that Australia must ensure it has the expertise and analytical capabilities to understand the risks and opportunities for Australian exports in the global energy transition.

2.65The Committee considers it prudent for Australia to pursue growth in green energy exports, aligned with the decarbonisation pathways of major trading partners, to both manage risk and to take advantage of the opportunities presented by the global green energy transition. Further, the potential benefits of Australia’s green energy transition are significant, both for decarbonisation and to underpin economic growth, as well as to support Australia’s strategic agenda in the Pacific by being a trusted, reliable trading partner committed to responding to climate change.

2.66The Committee recognises that Australia has the potential to become a green energy superpower based on its vast natural and developed strengths. However, while these strengths place Australia in a position of considerable advantage, they are not sufficient on their own to ensure Australia benefits in a decarbonising global economy and Australia must actively pursue its ambition to become a green energy superpower.

2.67While Australia’s emissions intensive exports are expected to decline over time, the Committee acknowledges the enormous contribution of the resources sector to the Australian economy and society over many decades, and the positive contribution it will continue to make as Australia undergoes its green energy transition.

Recommendations

2.68The Committee recommends that the Australian Government expand expertise and analytical capabilities to better understand the risks and opportunities for Australia’s export profile presented by the decarbonisation pathways of its major trading partners.

Footnotes

[1]Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 2.

[2]The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196countries at the United Nations Climate Change Conference (COP21) in Paris, France, on 12December2015. It entered into force on 4 November 2016. See: United Nations Climate Change, TheParis Agreement, https://unfccc.int/process-and-meetings/the-paris-agreement, viewed on 5 June 2023.

[3]See: Climate Council, Submission 36.1, p. 6. See also Law Council of Australia, Submission 92.1, p. 1, citation omitted.

[4]Climate Council, Submission 36.1, p. 6, citations omitted.

[5]Department of Foreign Affairs and Trade (DFAT), Australian Trade and Investment Commission (Austrade) and Export Finance Australia (EFA), Submission 31, p. 2, citations omitted.

[6]See, for example: DFAT, Austrade and EFA, Submission 31, p. 2; Climate Council, Submission36, p. 3; Grattan Institute, Submission 37, pp. 4–5; Australian Conservation Foundation, Submission 50, p. 3; TheNext Economy, Submission 51, p. 5; Fortescue Future Industries, Submission 93, p. 3.

[7]The University of Queensland, Submission 26, p. 2; Climate Council, Submission32, p. 2; Grattan Institute, Submission 37, p. 5; Australian Conservation Foundation, Submission50, p. 3; Coalition for Conservation, Submission 75, p. 3; Fortescue Future Industries, Submission 93, p. 3; Macquarie University Centre for Energy and Natural Resources Innovation and Transformation, Submission 125, p. 4.

[8]The University of Queensland, Submission 26, p. 2; Woodside Energy, Submission 47, p.3; Geoscience Australia, Submission 64, p. 6; Dr Andrew Feitz, Director, Low Carbon Geoscience and Advice, Geoscience Australia, Committee Hansard, Canberra, 10 February 2023, p. 37; MrMark McCallum, Chief Executive Officer, Low Emission Technology Australia, Committee Hansard, Brisbane, 16May 2023, p.14.

[9]The University of Queensland, Submission 26, p. 2; Professor Llewelyn Hughes and Dr Thomas Longden, Submission70, pp. 3–5; Dr Saul Griffith, Co-founder and Chief Scientist, Rewiring Australia, Committee Hansard, Macquarie Park, 6 April 2023, pp. 14, 19.

[10]See, for example: DFAT, Austrade and EFA, Submission 31, p. 3; Climate Council, Submission 36, pp. 2–3; Grattan Institute, Submission 37, p. 4; Australian Conservation Foundation, Submission 50, pp. 3–4; Coalition for Conservation, Submission 75, pp. 2–3; Boundless Earth, Submission 76, p. 1.

[11]Grattan Institute, Submission 37, p. 4.

[12]Climate Council, Submission 36, p. 2.

[13]Mr David Woods, Chief Economist and First Assistant Secretary, International Economics and Green Economy Division, Department of Foreign Affairs and Trade, Committee Hansard, Canberra, 23 November 2022, p. 4.

[14]DFAT, Austrade and EFA, Submission 31, p. 3, citation omitted.

[15]See, for example: Climate Council, Submission 36, pp. 2–3; Australian Conservation Foundation, Submission 50, p.4; Professor Llewelyn Hughes and Dr Thomas Longden, Submission 70, p. 5; Coalition for Conservation, Submission 75, p. 3; Australia China Business Council, Submission 102, p.7.

[16]Professor Llewelyn Hughes and Dr Thomas Longden, Submission 70, pp. 1–2; Department of Industry, Science and Resources, Resources and Energy Quarterly March 2023, March 2023, p. 162.

[17]Climate Council, Submission 36, p. 3.

[18]Climate Council, Submission 36, p. 3; Professor Frank Jotzo, Director, Australian National University Zero-Carbon Energy for the Asia-Pacific Initiative, Committee Hansard, Canberra, 31 March 2023, p. 45.

[19]DFAT, Austrade and EFA, Submission 31, p. 2.

[20]Dr Simon Bradshaw, Research Director, Projects, Climate Council, Committee Hansard, Macquarie Park, 6April 2023, p. 10.

[21]DFAT, Austrade and EFA, Submission 31, p. 3, citation omitted. See also: Australian Conservation Foundation, Submission 50, p. 4.

[22]Mr David Woods, Chief Economist and First Assistant Secretary, International Economics and Green Economy Division, Department of Foreign Affairs and Trade, Committee Hansard, Canberra, 23November 2022, p. 4.

[23]Boundless Earth, Submission 76, p. 1. The Sunshot Report was provided as an attachment to a submission to the inquiry from WWF-Australia, the Business Council of Australia, the Australian Council of Trade Unions and the Australian Conservation Foundation. See: WWF-Australia, the Business Council of Australia, the Australian Council of Trade Unions and the Australian Conservation Foundation, Submission 67, Attachment1.

[24]See, for example: Smart Energy Council, Submission 23, pp. 1–2; DFAT, Austrade and EFA, Submission 31, p. 23; Climate Council, Submission 36, p. 5; Grattan Institute, Submission 37, pp. 7–8.

[25]DFAT, Austrade and EFA, Submission 31, p. 3.

[26]Climate Council, Submission 36, p. 1.

[27]See, for example: Australian Hydrogen Council, Submission 39, p. 2; Mr Andrew Morris, Manager, Trade and Investment, Australian Trade and Investment Commission, Committee Hansard, Canberra, 30 November 2022, p. 3.

[28]Beyond Zero Emissions, Submission 32, p. 7; Grattan Institute, Submission 37, p. 7; Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 4; Sun Cable, Submission 71, p. 6.

[29]Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 4.

[30]Grattan Institute, Submission 37, p. 7.

[31]DFAT, Austrade and EFA, Submission 31, p. 2.

[32]Ms Rachael de Hosson, Branch Head, Net Zero Innovations and Partnerships Branch, Department of Climate Change, Energy, the Environment and Water, Committee Hansard, Canberra, 10 February 2023, p.1.

[33]Professor Llewelyn Hughes and Dr Thomas Longden, Submission 70, p. 5.

[34]Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 2.

[35]See, for example: DFAT, Austrade and EFA, Submission 31, p. 3; Climate Council, Submission 36, pp. 7–8; Clean Energy Council, Submission 38, p. 1; Queensland Conservation Council, Submission 41, p. 1; Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 5: Professor Paul Burke, Project Convenor, Australian University Zero-Carbon Energy for the Asia-Pacific Initiative, Committee Hansard, Canberra, 31 March 2023, p. 49;Dr Simon Bradshaw, Research Director, Projects, Climate Council, Committee Hansard, Macquarie Park, 6 April 2023, p. 12.

[36]Mr David Woods, Chief Economist and First Assistant Secretary, International Economics and Green Economy Division, Department of Foreign Affairs and Trade, Committee Hansard, Canberra, 23 November 2022, p. 1.

[37]Clean Energy Council, Submission 38, p.1.

[38]Climate Council, Submission 36, p. 7, citation omitted.

[39]Climate Council, Submission 36, p. 8, citation omitted.

[40]Electric Vehicle Council, Submission 14, p. 5; Smart Energy Council, Submission 23, p. 1; Beyond Zero Emissions, Submission 32, pp. 3, 6-7; Climate Council, Submission 36, p. 8; Grattan Institute, Submission37, p. 2; Australian Hydrogen Council, Submission 39, p. 2; Australia Conservation Foundation, Submission 50, pp. 4–5; Department of Climate Change, Energy, the Environment and Water, Submission62, pp. 3–4; Fortescue Future Industries, Submission 93, pp. 8–9.

[41]DFAT, Austrade and EFA, Submission 31, p. 3, citation omitted; Beyond Zero Emissions Submission 32, p.6; Climate Council, Submission 36, p. 8; Queensland Conservation Council, Submission 41, p. 1; Australian Conservation Foundation, Submission 50, pp. 1–2; The Next Economy, Submission 51, p. 2; Department of Climate Change, Energy, the Environment and Water, Submission 62, pp. 3–4; WWF-Australia, the Business Council of Australia, the Australian Council of Trade Unions and the Australian Conservation Foundation, Submission 67, p. 1.

[42]Farmers for Climate Action, Submission 16, pp.1–2; RE-Alliance, Submission 43, p. 4; Australian Conservation Foundation, Submission 50, p. 5; Fortescue Future Industries, Submission 93, pp. 10–11.

[43]Mr David Woods, Chief Economist and First Assistant Secretary, International Economics and Green Economy Division, Department of Foreign Affairs and Trade, Committee Hansard, Canberra, 23 November 2022, p. 1.

[44]Australian Conservation Foundation, Submission 50, p. 3–4; Australia China Business Council, Submission102, p. 4; Mr Shannon O’Rourke, Chief Executive Officer, Future Battery Industries Cooperative Research Centre, Committee Hansard, Perth, 17 March 2023, p. 17; Professor Ian Chubb, Secretary for Science Policy, Australian Academy of Science, Committee Hansard, Canberra, 31 March 2023, p. 9.

[45]Mr David Olsson, National President and Chair, Australia China Business Council, Committee Hansard, Macquarie Park, 6 April 2023, p. 29.

[46]See, for example: The Next Economy, Submission 51, p. 6; Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 2; Fortescue Future Industries, Submission 93, p. 4; JamesBowen, Submission 115, p. 1.

[47]Sun Cable, Submission 71, p. 8; Entura, Submission 79, p. 4; Australia China Business Council, Submission102, p. 7.

[48]The Next Economy, Submission 51, p. 6.

[49]Australian Electric Vehicle Association, Submission 19, p. 3.

[50]James Bowen, Submission 115, p. 1.

[51]See, for example: Star of the South Wind Farm Pty Ltd, Submission 25, p. 4; James Bowen, Submission115, pp. 1–2.

[52]Department of Climate Change, Energy, the Environment and Water, Submission 62, p. 5.

[53]DFAT, Austrade and EFA, Submission 31, p. 3.

[54]DFAT, Austrade and EFA, Submission 31, p. 4.

[55]DFAT, Austrade and EFA, Submission 31, p. 3.

[56]James Bowen, Submission 115, p. 1.

[57]See: Electric Vehicle Council, Submission 14, p. 7; Smart Energy Council, Submission 23, p.2; Tesla, Submission 24, p. 9; The University of Queensland, Submission 26, p. 6; DFAT, Austrade and EFA, Submission31, p.2; Beyond Zero Emissions, Submission 32, p. 3; Ammonia Energy Association, Submission 35, p. 1; Grattan Institute, Submission 37, p. 6; Woodside Energy, Submission 47, p. 2; Australian Conservation Foundation, Submission 50, pp. 2, 7; Department of Climate Change, Energy, the Environment and Water, Submission62, p. 2; Geoscience Australia, Submission 64, p. 15; Australian Academy of Technological Science and Engineering and the Australian Academy of Science, Submission 74, p. 2; Boundless Earth, Submission 76, p. 1; Fortescue Future Industries, Submission 93, p. 2; Rewiring Australia, Submission 118, p. 1; Macquarie University Centre for Energy and Natural Resources Innovation and Transformation, Submission 125, p. 3; MsRachaeldeHosson, Branch Head, Net Zero Innovations and Partnerships Branch, Department of Climate Change, Energy, the Environment and Water, Committee Hansard, 10 February 2023, p. 2; MsRebecca Brown, Director General, Department of Jobs, Tourism, Science and Innovation, Western Australia, Committee Hansard, Perth, 17 March 2023, p. 1; Dr Mark Hutchinson, Chief Executive Officer, Fortescue Future Industries, Committee Hansard, Perth, 17 March 2023, p. 9; Professor Paul Burke, Project Convenor, Zero-Carbon Initiative for Asia Pacific, Australian National University, Committee Hansard, Canberra, 31 March 2023, p. 52; MsKylie Walker, Chief Executive Officer, Australian Academy of Technological Sciences and Engineering, Committee Hansard, Canberra, 31 March 2023, p.6; Mr Simon Corbell, Chief Executive Officer, Clean Energy Investor Group, Committee Hansard, Canberra, 31 March 2023, p.21; MrBradley Riley, private capacity, Committee Hansard, Canberra, 31 March 2023, p.35; Ms Jude Burger, Vice-President, Australia Electric Vehicle Association, Committee Hansard, Canberra, 31 March 2023, p.37; Professor Frank Jotzo, Director, Zero-Carbon Energy for the Asia-Pacific, Australian National University, Committee Hansard, Canberra, 31 March 2023, p.44; MrEytanLenko, Chief Executive Officer, Boundless Earth, Committee Hansard, Melbourne, 5 April 2023, p.16; MsNicola Ison, Head of Direct Advocacy, Boundless Earth, Committee Hansard, Melbourne, 5 April 2023, p.17; Ms Sanaya Khisty, Chief Strategy Officer, Beyond Zero Emissions, Committee Hansard, Melbourne, 5April 2023, p.24; Ms Natalie Thompson, Senior Policy Officer, Electric Vehicle Council, Committee Hansard, Macquarie Park, 6April 2023, p.21; Mr Rimas Kairaitis, Managing Director, Alpha HPA, Committee Hansard, Gladstone, 17 May 2023, p.3.

[58]Dr Saul Griffith, Co-founder and Chief Scientist, Rewiring Australia, Committee Hansard, Macquarie Park, 6April 2023, p. 14.

[59]Geoscience Australia, Solar energy, www.ga.gov.au/scientific-topics/energy/resources/other-renewable-energy-resources/solar-energy, viewed 20 June 2023. See also: Australian Electric Vehicle Association, Submission 19, p. 2.

[60]Geoscience Australia, Solar energy, www.ga.gov.au/scientific-topics/energy/resources/other-renewable-energy-resources/solar-energy, viewed 20 June 2023.

[61]Australian Renewable Energy Agency, Solar energy, https://arena.gov.au/renewable-energy/solar/, viewed 21 June 2023.

[62]Geoscience Australia, Submission 64, p. 8.

[63]Geoscience Australia, Submission 64, p. 8.

[64]Geoscience Australia, Submission 64, p. 8.

[65]See: Star of the South Wind Farm Pty Ltd, Submission 54.

[66]Geoscience Australia, Submission 64, p. 8.

[67]Geoscience Australia, Australia’s size compared, www.ga.gov.au/scientific-topics/national-location-information/dimensions/australias-size-compared, viewed 20 June 2023.

[68]Geoscience Australia, Australian mineral facts, www.ga.gov.au/education/classroom-resources/minerals-energy/australian-mineral-facts, viewed 20 June 2023. See also: Grattan Institute, Submission 37, p. 6; Australian Conservation Foundation, Submission 50, p. 4.

[69]Australian Conservation Foundation, Submission 50, p. 4; Geoscience Australia, Submission 64, p. 15.

[70]Geoscience Australia, Submission 37, p. 15.

[71]Geoscience Australia, Critical minerals at Geoscience Australia, www.ga.gov.au/scientific-topics/minerals/critical-minerals, viewed 8 June 2023.

[72]Geoscience Australia, Submission 64, p. 15.

[73]Australian Conservation Foundation, Submission 50, p. 4.

[74]DFAT, Austrade and EFA, Submission 31, p. 3.

[75]Fortescue Future Industries, Submission 93, p. 2.

[76]Dr Andrew Hutchinson, Chief Executive Officer, Fortescue Future Industries, Committee Hansard, Perth, 17 March 2023, p. 11.

[77]Australian Hydrogen Council, Submission 39, pp. 4–5.

[78]See, for example: Electric Vehicle Council, Submission 14, pp. 3, 7; Tesla, Submission 24, p. 9; TheUniversity of Queensland, Submission 26, pp.2, 6; DFAT, Austrade and EFA, Submission 31, pp.2, 4–5; Beyond Zero Emissions, Submission 32, p. 3; Ammonia Energy Agency, Submission 35, p. 1; Woodside Energy, Submission 47, p. 2; Australian Hydrogen Foundation, Submission 39, p. 2; Australian Conservation Foundation, Submission 50, p. 2; Department of Climate Change, Energy, the Environment and Water, Submission 62, pp. 2–3; Geoscience Australia, Submission 64, p. 15; WA Government, Submission 65, pp.1, 6; Fortescue Future Industries, Submission 93, pp. 3, 11, 13; Australian Pipeline Limited, Submission94, p. 6; Macquarie University Centre for Energy and Natural Resources Transformation and Innovation, Submission 125, p. 3; Ms Kylie Walker, Chief Executive Officer, Australian Academy of Technological Sciences and Engineering, Committee Hansard, Canberra, 31March 2023, p.6; MsSanaya Khisty, Chief Strategy Officer, Beyond Zero Emissions, CommitteeHansard, Melbourne, 5 April 2023, p.24.

[79]Australian Hydrogen Council, Submission 39, p. 2.

[80]Australian National University’s Zero-Carbon Energy for the Asia-Pacific Initiative, Submission 98, p. 4.

[81]DFAT, Austrade and EFA, Submission 31, p. 2.

[82]Ms Simone Spencer, Deputy Director General, Strategy and International Engagement, Department of Jobs, Tourism, Science and Innovation, Western Australia, Committee Hansard, Perth, 17 March 2023, p. 7.

[83]Ms Kylie Walker, Chief Executive Officer, Australian Academy of Technological Sciences and Engineering, Committee Hansard, Canberra, 31 March 2023, p. 6.

[84]Geoscience Australia, Submission 64, p. 15.

[85]See, for example: Dr Karin Soldenhoff, Manager, Process Development Research, Minerals Business Unit, Australian Nuclear Science and Technology Organisation, Committee Hansard, Canberra, 10 February 2023, p. 10; Mr Tony Wood, Program Director, Grattan Institute, Committee Hansard, Melbourne, 5 April 2023, pp.1–2.

[86]Australian Pipeline and Gas Association, Submission 42, p. 4; Australian Conservation Foundation, Submission 50, p. 6; Australian Pipeline Limited (APA Group), Submission 94, pp. 8–9.

[87]Mr Rowan Moorey, Senior Researcher, Beyond Zero Emissions, Committee Hansard, Melbourne, 5 April 2023, p.26.

[88]See, for example: The University of Queensland, Submission 26, p. 1; Mr William Tan, Acting General Manager, National Reconstruction Fund Priorities Branch, Manufacturing and National Reconstruction Fund Division, Department of Industry, Science and Resources, Committee Hansard, Canberra, 10 February 2023, p. 11; Mr Wayne Smith, External Affairs Manager, Smart Energy Council, Committee Hansard, Canberra, 31March 2023, p. 28; Mr Wayne Smith, External Affairs Manager, Smart Energy Council, Committee Hansard, 31March 2023, p. 28; Ms Kylie Walker, Chief Executive Officer, Australian Academy of Technological Sciences and Engineering, Committee Hansard, Canberra, 31 March 2023, p. 6.

[89]Dr Peter Mayfield, Executive Director, and Dr Dietmar Tourbier, Director, Commonwealth Scientific and Industrial Resource Organisation, Committee Hansard, Canberra, 10 February 2023, pp. 23–24.

[90]Australian National University Zero-Carbon Energy for the Asia-Pacific Initiative, Submission 98, p. 6.

[91]Ms Nicola Ison, Head of Direct Advocacy, Boundless Earth, Committee Hansard, Melbourne, 5 April 2023, p.16.

[92]See, for example: Electric Vehicle Council, Submission 14, p. 9; Beyond Zero Emissions, Submission 32, p.3; Climate Council, Submission 36, pp. 10–11; Australian Hydrogen Council, Submission 36, p. 3; The Next Economy, Submission 51.1, p. 1; Boundless Earth, Submission 76, p. 2; Fortescue Future Industries, Submission 93, pp. 5–6; WWF-Australia, the Business Council of Australia, the Australian Council of Trade Unions and the Australian Conservation Foundation, Submission67.1, p. 23.

[93]Beyond Zero Emissions, Submission 32, p. 3.

[94]Ms Kylie Walker, Chief Executive Officer, Australian Academy of Technological Sciences and Engineering, Committee Hansard, Canberra, 31 March 2023, p. 6.

[95]Climate Council, Submission 36, pp. 10–11.