The Albanese Government was elected to power in May 2022 under the pledge of numerous promises. One of these was a pledge to legislate ‘hard’ GHG emission reductions for 2030 and beyond.
The Albanese Government delivered on this promise with the passing of the Climate Change Bill (2022) by the Australian Parliament in August 2022. The Bill stipulates a 43% reduction in GHG Emissions by 2030 (relative to the 2005 level) and the delivery of Net Zero emissions by 2050, where ‘Net Zero’ emission means the reduction of emissions to the minimum possible level and the application of emission offsets to neutralise the remainder.
Soon after the passing of the Bill, the Australian Climate Change Authority (CCA) released its first annual Progress Report on how Australia is tracking towards it’s the achievement of these new GHG emission reduction targets. Understandably, this first CCA report largely focussed on the challenge ahead given the limited time that had elapsed since the passing of the Climate Change Bill (2022) and the release of the report.
The report stated that:
“Australia needs a big shift in the momentum of emissions reductions. To meet its ambitious new targets, Australia will need to decarbonise at an average annual rate of 17 Mt CO2-e per year, more than 40 per cent faster than it has since 2009”.
In the face of national calls by business and industry for the rapid development of a National Net Zero 2050 Transition Plan detailing how Australia will achieve these ambitions, the CCA Report went on to state:
“The Government can ‘light the way’ to net zero with a long-term strategy for emissions reductions—a strategy that sets expectations for when, how, and by how much, emissions should be reduced across different sectors of the economy”.
Twelve months on, as the CCA prepares to launch its second Annual Progress Report, the Federal Minister for Climate Change and Energy, The Hon. Chris Bowen MP, provided an address at the Australian Chamber of Commerce and Industry’s (ACCI’s) National Leaders Forum in Canberra this week.
The Forum, attended by around 160 business and industry leaders, including ACAPMA CEO Mark McKenzie, noted a distinct change in the Minister’s language compared with just 12 months ago.
“While the Minister was quite bullish about Australia’s chances of delivering the 2030 emission reduction targets, he surprisingly likened Australia’s ‘hard’ legislated targets to ‘soft’ business aspirations”, said ACAPMA CEO Mark McKenzie.
But perhaps the most telling aspect of the Minister’s address was that despite the 2022 CCA Report suggesting the Government could “light the way to net zero by 2050 with a long-term strategy for emissions reductions” there was no mention of any such strategy.
Instead, the Minister spent much of his address describing the long list of challenges to the achievement of the 2030 Targets – everything from national skills shortages to global supply chain challenges, and rising construction costs.
A cynic might reasonably suggest that the Minister was preparing the way for a future explanation of why Australia did not achieve its 2030 Emission reduction targets – rather than ‘lighting the way’ towards the achievement of same.
“What we urgently need from the Australian Government (and their State/Territory counterparts) is a meaningful Net Zero 2050 Transition Plan – one that sets out a plan for the actions that will be pursued to deliver both Net Zero 2050 and the interim 2030 emission reduction targets”, said Mark.
The only thing that has even come close to such a plan is a multi-disciplinary piece of work published by a coalition of university research teams in July of this year. Under the banner of the Net Zero Australia Project, three universities (University of Melbourne, University of Queensland and Princeton University in the USA) combined with national consultancy practice Nous Group, to quantify the Net Zero 2050 challenge. The key findings of this work provided an alarming summary of the massive economic and engineering task that lies ahead.
The Net Zero Mobilisation report: How to make net zero happen , forecast that that Australia will need to invest $1.5 Trillion dollars in the next 7 years to meet its 2030 emission targets – and more than $7 Trillion between 2030 and 2050. This national economic cost, the report suggests, will largely be borne by Australian businesses and households with estimates that the transition will cost every Australian Household an additional $80,000 in today’s terms – more than double the current average annual household savings balance of $36,000.
But the sheer scale of what’s required is not just staggering in economic terms – it is also massive when considered in terms of the nature of the physical construction task. The Net Zero Australia Project suggests that the skilled workforce required to install and run the necessary clean energy infrastructure will need to double to at least 200,000 people by 2030 and climb to as much as 850,000 by 2060 (or 4% of the forecast total workforce).
All this begs the obvious question… Are Australia’s GHG emission reduction targets economically and technically achievable?
Ambition is one thing, but the targets that have been legislated appear patently unrealistic given current economic, technological, and labour force settings. Their achievement relies on yet to be realised technological breakthroughs and a level of investment that is on par with the reconstruction of Europe after the destruction of World War 2.
“There will be those reading this who will suggest that, as the peak body representing the end stream of Australia’s fuel industry, we have a vested interest in Australia’s Net Zero effort failing”, said Mark.
“But such an observation ignores the fact that our larger businesses are already investing in low carbon mobility and, as a result, over 200 of Australia’s service stations will have EV Fast Charging infrastructure in place by the end of 2023”, said Mark.
“In addition, two Hydrogen refuelling stations have been commissioned in the past year – one in Brisbane and one in Port Kembla – and more low carbon energy projects for the Australian transport sector are on their way”, added Mark.
Put simply, the Australian fuel industry is already investing in the transition.
But this investment is being made largely in preparation of anticipated demand. It must be supported by the development and implementation of a comprehensive Net Zero 2050 Transition Plan for Australia – one that details how the government will support future investment in low carbon mobility technologies in Australia.
This transition plan should not pick winners. Like Europe, Australia must seek to develop a transition plan that pursues a portfolio of low carbon technologies to deliver the legislated emissions targets on time and at the lowest possible cost to the economy.
In terms of road transport emissions, that means considering all options – not just EVs and Hydrogen vehicles. It means also including solutions such as renewable and synthetics liquid fuels that can be used in traditional internal combustion vehicle technologies, using existing distribution and refuelling infrastructure, to deliver near zero emissions from the national vehicle fleet.
“It is time we got serious and backed up our legislated targets with a transition plan that incentivises and accelerates investment in ‘clean energy’ – one that is affordable and workable given current economic, technological, infrastructure and workforce constraints”, said Mark.
Business and industry – including the Australian fuel industry – are already investing the clean energy transition. But this investment will be put at risk if the government fails to advance a National Transition Plan that puts the policies and programmes in place needed to protect and grow this investment in the future.
With just over 6 years left to achieve Australia’s 2030 emission reduction targets, time is running out.