Net zero achievable in Australia by 2050: report

Heavy industry in Australia could decarbonise, help limit warming to 1.5°C and create up to 1.35 million jobs, according to a new report released today.

The new report has, for the first time in Australia, outlined decarbonisation pathways that show it is possible for five of Australia’s most significant heavy industry supply chains to transition to net zero, consistent with global efforts to limit warming to 1.5°C.

The third and final report of the Australian Industry Energy Transitions Initiative (Australian Industry ETI) has been done in collaboration with companies representing around a fifth of Australia’s industrial emissions and a third of the ASX100 market value. The report finds that strong, effective and coordinated action from government, industry and finance is crucial for the net zero transition.

Launched today in Sydney, at an event with Minister for Climate Change and Energy Chris Bowen and Lord Adair Turner (who has been an adviser to the project through the UK-based Energy Transitions Commission), the report identifies five objectives to enable heavy industry to transition to net zero emissions consistent with global efforts to limit warming to 1.5°C. They are for Australia to:

• set a strong, clear, enduring framework with a net zero emissions goal to align industry, finance and government;
• transition to the large-scale, cost-competitive, renewable energy system of the future;
• accelerate development and demonstration of the emerging technologies needed;
• drive deployment of low-carbon solutions, reduce barriers and support investment towards the transition; and
• develop integrated net zero emissions industrial regions, supply chains and energy network solutions.
   

“Commitment from industry to the long-term transition is a positive step towards developing the capabilities needed, avoiding the risk of stranded assets and higher long-term energy costs, and for ensuring a future in which Australian energy-intensive industries are competitive in a decarbonised world,” said Australian Industry ETI Chair Simon McKeon AO, Chancellor of Monash University.

“With strong ambition, coordinated action and government support, industry emissions could be reduced by up to 92% by 2050, based on 2020 levels. This, with high-quality and verifiable offsets for the remaining 8%, would transition industry to net zero emissions in support of the ambition to limit warming to 1.5°C.

“This is a moment of opportunity to align and focus efforts to create a globally competitive, equitable, net zero emissions industrial economy in Australia. Action is needed now to lay the foundations, capitalise on the opportunities and avoid more costly emissions reduction measures in the future.”

The report outlines how over 1.3 million jobs could be created between 2025 and 2050 in the ambitious 1.5°C scenario. Investment by government, industry and investors could support up to 64,000 construction jobs per year from 2025 to 2050, plus an additional 129,000 roles in operations and maintenance between 2025 and 2050.

The Pathways to Industrial Decarbonisation report is the result of a three-year collaboration between some of Australia’s largest companies, as part of the Australian Industry ETI convened by not-for-profits Climateworks Centre and Climate-KIC. The report was prepared for the Australian Industry ETI by Climateworks and CSIRO, in consultation with industry and research partners.

“This three-year program has shown that transitioning heavy industries in a carbon-intensive economy, like Australia’s, is a challenge that will require a transformational shift in the energy system,” said Anna Skarbek, CEO of Climateworks Centre, which is based at Monash University. “This includes accelerated action on technology and investment, especially in targeted place-based approaches focused on common net zero goals.

“The transition is an investment in modernising Australia’s industrial regions and energy system that, over a 30-year period, equates to roughly $20.8 billion per year if Australia is to remain on track to limit warming to 1.5°C. Around two-thirds of this investment is in the energy system and one-third in industry technologies, electrification and energy efficiency.

“To put this into context, it represents a tenth of the export value of the five supply chains in focus for the Australian Industry ETI — approximately $236 billion each year — and is comparable to investments made through other major efforts.”

The report finds that renewable energy is a critical enabler of industrial decarbonisation to be scaled up rapidly, and that industry’s early uptake and effective integration of renewable electricity, electrification and use of green hydrogen to substitute for other fuel sources can help Australia achieve competitive costs for reliable decarbonised energy.

“Achieving these pathways needs at least a doubling of total current electricity generation by 2050, but this is possible through multi-gigawatt renewable generation developments, some of which are already in advanced stages of planning,” said Paul Graham, CSIRO’s Chief Energy Economist.

Image credit: iStock.com/Thurtell