Australia’s industrial sector faces transformative change to meet global and domestic emission reduction targets. Our current policies are not up to the task. A 21st Century industry policy to deal with a 21st Century problem can underpin Australia’s successful transformation to a world-leading energy superpower. This report presents the case for, and describes, such a policy.
Australian industries that extract resources and add value through manufacturing currently contribute more than $76 billion to GDP and employ 1.1 million people. But they also contribute about 30 per cent of our domestic greenhouse gas emissions. And the emissions from our exported coal and gas – double Australia’s total national emissions in 2020 – add to the climate responsibilities of other nations. A serious global commitment to net-zero emissions has profound economic, social, and environmental implications for Australia.
The scale and pace of change represents an industrial revolution in three parts. First, there are activities such as coal mining that will be essentially incompatible with a net-zero economy. Then, there are activities such as steel-making that may be able to transform through economic, low-emission technologies. And, there are activities such as low-emission extraction and processing of critical energy minerals which are insignificant today but where Australia could capitalise on globally significant comparative advantages.
Many industry sub-sectors share two common challenges. They currently lack commercially viable abatement pathways. And they face re-investment decisions within the next 30 years that, taken wrongly, could lock in emissions for an extended period.
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