In July 2024, the Senate of the Parliament of Australia referred the provisions of the Future Made in Australia Bill 2024 and the Future Made in Australia (Omnibus Amendments No. 1) Bill 2024 to the Senate Economics Legislation Committee for inquiry and report.
Australia’s energy transition represents a moment of great opportunity.
Without coordinated action and prioritisation of decisions with a whole-of-economy lens, emissions reduction will not happen at the pace and scale needed, and Australia risks making the net zero transition too slowly, or not at all.
Climateworks has extensively analysed and written about the many opportunities for Australia in the global net zero transition and the advantages of building an economy powered by clean energy and Australia’s abundant mineral resources.
Climateworks welcomes the intent of the Future Made in Australia (FMA) framework to provide structure to the decision-making which will guide the public investment that can bring forward the private investment required for Australia’s economic and emissions reduction goals.
FMA is precisely the kind of coordination that can help Australia to make the most of its once-in-a-lifetime green economy transformation.
Climateworks Centre decarbonisation scenarios 2023 presents two modelled scenarios for Australia’s economy to reduce its emissions for the lowest cost.
The Paris-aligned whole-of-economy scenarios show Australia rapidly decarbonising its electricity system and more than doubling renewable electricity generation by 2035.
Renewable electricity will power buildings, transport and industry while Australia improves its homes, invests in green hydrogen, plants trees and protects ecosystems, and commits to faster emissions reductions over the next decade and beyond.
For three years, Climateworks and Climate-KIC Australia convened the Australian Industry Energy Transitions Initiative (Australian Industry ETI) to explore and address the challenges associated with decarbonising emissions-intensive heavy industry.
The Australian Industry ETI brought together companies representing around a fifth of Australia’s industrial emissions and a third of the ASX100 market value.
Using scenario analysis from Climateworks and CSIRO, the group found that strong, effective and coordinated action from government, industry and finance is crucial for the net zero transition.
The modelling, analysis and industry consultation undertaken through the Australian Industry ETI shows a pathway to transition heavy industry in line with limiting global warming to 1.5°C.
With strong ambition, coordinated action and government support, industry emissions could be reduced by up to 92 per cent by 2050 from 2020 levels.
A key finding from the Australian Industry ETI was the importance of setting a strong, clear, enduring framework with a net zero goal that aligns industry, finance and government efforts to transition Australia’s industry.
FMA is an important element in such a framework.
The Australian Industry ETI work culminated in a collective statement from the initiative’s industry participants, committing to work together to achieve net zero.
The statement highlighted the importance of deploying low-carbon solutions across the economy, reducing barriers to, and investing in, the transition to compete in a decarbonising global economy.
Through FMA the Australian Government can play a key role in facilitating the private investment required to harness this opportunity.
This submission explores ways to strengthen the delivery of FMA to maximise the economic and industrial benefits of the net zero transformation and the changing global economy.
Climateworks recommends the committee support the intent of the Bills and explore amendments to strengthen the Bills in the following categories:
- FMA investments can contribute both to Australia’s Paris Agreement responsibilities – including domestic emissions reduction targets – and Australia’s renewable energy superpower potential.
- FMA investments drive impact at a regional and economic level.
- FMA investments are an effective use of government funding.