In this Bloomberg article, journalist Swati Pandey describes how Australia is finally getting serious about emissions and green-energy companies from around the world are seeing an opportunity.
‘Mega-Polluter Australia Is Finally Becoming a Green Superpower’
Australia is finally getting serious about global warming and everyone from oil majors to billionaire mining magnates are looking for a way to capitalize on the transformation.
Signs of change are everywhere on the continent. A new government has been elected, pledging to cut greenhouse-gas emissions faster; the nation’s biggest power grid has a multibillion-dollar plan to dump coal; and some of the country’s richest people who made their fortunes in mining and technology are lining up huge green-energy projects designed to pivot the nation from fossil-fuel king to a global supplier of green energy and the metals needed to build electric vehicles.
“We’re at a turning point,” said Will Symons, Melbourne-based Asia-Pacific climate and sustainability leader for Deloitte. “The challenge for us is to move at pace and move at scale, and that’s going to require new collaborations. Speed is everything.”
For companies including Elon Musk’s Tesla Inc., oil giant BP Plc and a host of Japanese conglomerates, Australia provides more than an opportunity to make a dent in global emissions. As well as a potential source of green energy, it offers a unique platform to develop, test and build technologies thanks to the nation’s climate, minerals and ready-made infrastructure. That combination of resources is especially attractive for companies looking to produce green hydrogen, with funding and export deals pouring in from Germany, Singapore, South Korea, Japan and the UK.
Still, the scale of the task is daunting. Australia’s economy has relied on digging out and selling its minerals — especially coal — for over a century. Last year, it mined about 400 million tons of the most-polluting fossil fuel. Yet in a symbol of how the nation is changing, the country’s largest power market this month reached a point where solar briefly overtook coal as the biggest source of electricity.
A big part of the shift is political. The May national election not only put Labor in power, it saw gains for the Green party and several independent lawmakers who campaigned on environmental platforms. New Prime Minister Anthony Albanese followed up his election promises by introducing a Climate Change Bill on July 27 aimed at cutting emissions 43% by 2030 from 2005 levels. “Australia’s open for business for renewable energy, for transmission, for storage, to create hundreds of thousands of jobs,” Climate Change and Energy Minister Chris Bowen told Sky News Australia.
In the media, a handful of the nation’s richest people have been grabbing headlines. Mike Cannon-Brookes and mining magnate Andrew Forrest are putting together A$30 billion ($20 billion) in funding to build a 4,200-kilometer (2,600-mile) undersea cable to send solar power to Singapore that could begin construction in 2024.
Forrest, founder of Fortescue Metals Group Ltd, the country’s No. 3 iron-ore exporter, plans to make his entire fleet of trucks and trains in the Pilbara mining region carbon-free by 2040, according to regulatory filings. One of the billionaire’s biggest coups this year was to lure Guy Debelle, who had been tipped to become the next governor of Australia’s central bank.
“We haven’t got all the time in the world, we need to be doing something now,” said Debelle, now chief financial officer of Forrest’s clean-energy venture, Fortescue Future Industries, which also plans to start producing 15 million tons a year of green hydrogen by 2030.
The billionaires aren’t the only ones in the country turning green. Oil major BP linked up with green hydrogen firm InterContinental Energy and solar supplier CWP Global to lead what could become one of the world’s biggest clean energy projects — a 26-gigawatt solar and wind farm on a chunk of Western Australia larger than Delaware. The project would pump out 1.6 million tons of hydrogen, or 9 million tons of ammonia a year. Meanwhile Japan received its first shipment this year of Australian carbon-neutral hydrogen made from brown coal on the Suiso Frontier, a purpose-built hydrogen tanker made by Kawasaki Heavy Industries.
“We can be the equivalent of Saudi Arabia in clean energy,” said Murray Shearer, chair and professor of hydrogen and alternative energy at CQ University in Gladstone. “We have all the natural advantages and we need to grab these things before they go somewhere else.”
Australians have more reason than most to worry about global warming and rising sea levels. While Londoners in the UK sweltered through an unusually hot July, in the southern hemisphere summer in January, the seaside town of Onslow in Western Australia saw the mercury rise to 50.7C (123 Fahrenheit), the highest temperature recorded on the continent. Even in the western suburbs of the nation’s largest city, Sydney, summer temperatures regularly melt asphalt. The ‘black summer’ of 2019 and early 2020 saw Australia’s worst bushfires in living memory.
And while the dry, inhospitable interior of the country may be good for mining and solar farms, it means that 9 out of 10 Australians live near the sea, mostly along the country’s eastern coast that was battered by deadly floods this year.
The continent has “absolutely extraordinary potential that’s only just beginning to be realized on the renewable side,” Mark Carney, former governor of the Bank of England and now head of Brookfield Asset Management’s Global Transition Fund, told a Melbourne conference via videolink on July 28. “Seizing that will create more jobs and more opportunity.”
Yet for Australia to capitalize on its clean-energy potential and create enough jobs to replace those lost from the demise of dirty fuel, the nation needs to develop a much wider green ecosystem than it has, one that includes research, startups, skills and especially funding. A Deloitte index of ‘economic complexity,’ which measures diversity in industries and supply chains, ranks Australia 37th, behind China, Russia and India.
One potential advantage is that Australia is also the source of many of the minerals used in green-technology industries such as electric-vehicle batteries and energy storage. The nation supplies more lithium raw materials than any other country, accounting for about three-quarters of Tesla’s needs, and has vast troves of other key metals including nickel, cobalt and manganese.
Developing a diverse battery industry that includes more than simply mining would add more than A$3 billion ($2.1 billion) in value and an extra 16,000 jobs by 2030, Accenture said in a report last year. But efforts to leverage that mineral wealth to develop higher-value related industries have been slow. The country’s first lithium refinery began production in Kwinana, Western Australia, in May and other sites are under construction, a first step in moving up the value chain.
To move toward the goal of manufacturing lithium-ion cells and batteries — and potentially even reviving auto production — Australia could begin by focusing on specialist areas such as commercial vehicles and energy storage for wind and solar farms, the Accenture study said. Tesla built and installed the world’s first large-scale battery for energy storage in Hornsdale, South Australia, in 2017.
“Australia has the minerals — not just lithium — and also the knowhow and many of the skills to capture the opportunity of this new energy era,” Tesla’s Sydney-based chair Robyn Denholm told a conference in the city last month.
Increasing tension between the US and China could also help Australia as Western companies look for alternative suppliers to counter the dominance of China in rechargeable batteries.
A pro-environment government can help by providing investment in education and initial capital to jump-start innovation, and by adjusting regulations to encourage investment in technology and infrastructure, but government spending on green projects is only a tiny amount of what’s needed. Renewable energy agency Arena invested the equivalent of about $1.3 billion in the past decade in more than 600 projects, including 35 hydrogen ventures. By contrast, oil-rich Saudi Arabia last year pledged to spend more than $100 billion over the next 10 years on renewables.
In this year’s A$100 million hydrogen deployment round, Arena expects to reach financial close on two or three of the country’s first large-scale electrolyzers — the devices that split water into hydrogen and oxygen, CEO Darren Miller said in June.
“While a 10 megawatt electrolyzer would indeed be the largest of its kind in Australia so far, we’ve seen the ambition really grow to the extent that large-scale would now be a 300 megawatt electrolyzer — some thirty times larger than those we’re currently working on,” Miller said.
Ironically, many of these investments are in traditional mining and fossil-fuel regions because they already have much of the infrastructure and labor needed to operate renewable plants and connect them to the grid.
One key advantage that Australia has could be the ability to pivot some of its biggest environmental offenders into green havens. Gladstone in the country’s north east, currently the world’s fourth-largest coal export terminal, is the site of an investment by Rio Tinto and Japan’s Sumitomo Metal Mining Co. to create sustainable energy and green hydrogen that would help decarbonize the city’s carbon-intensive industries such as cement and aluminum.
“Strategically it works very well to kick off the energy transition in these industrial hubs,” said CQU’s Shearer. “When you do an analysis of where are the cheapest places in Australia to do clean energy — hydrogen in particular — some of them are in Gladstone and the area surrounding it.”
One area where Australia’s change of heart is most visible and most needed is in research.
From a project at the University of New South Wales that uses old tires and coffee grounds to smelt steel, to Sydney-based HB11 Energy, which was recently awarded A$22 million to develop Australia’s sovereign nuclear fusion program, startups are being founded in new energy and climate-change related industries.
One success story is Brisbane-based Tritium DCFC Ltd., which has almost 7,000 electric vehicle rapid chargers installed in 41 countries, the fastest of which can add 217 miles of driving range in 10 minutes.
“There’s a growing urgency in industry to go green,” said Andrew Horvath, chairman of Star Scientific Ltd., which is working on ways to replace fossil-fuels in power stations with green hydrogen — another example of an effort to leverage the nation’s existing infrastructure by using existing steam turbines. “Why would you throw them away? They’re already connected to the grid,” he said.
Still, there are those who caution against moving too rapidly to dump fossil fuels, arguing that it could lead to high unemployment in some communities and would hurt the economy.
“I think the financial industry has mostly not completely come around to the idea that funding coal is probably not sensible,” Debelle said. He argues that, far from damaging the economy, Australia’s potential green resources give it a competitive advantage.
“We have a great capacity to really do very nicely out of these opportunities,” said Debelle. “It’s good for the economy. It’s got employment opportunities. It’s great from an energy self-sufficiency point of view, but actually the commercials stack up too.”
Meanwhile, the nation’s traditional fossil-fuel and carbon-intensive industries are minting money thanks to the global energy crisis, fanned by Russia’s war in Ukraine. The price of coal for power stations shipped from Newcastle, Asia’s key port for the fuel, surged to a record in June.
But while the Ukraine war is providing a temporary surge in demand — Europe’s biggest economy, Germany, already reactivated some coal-fired power plants to cut dependence on Russian gas — the crisis is also reinforcing the necessity for energy-importing nations to lessen their reliance on a small number of big fossil-fuel exporters.
Pressure from the community, labor unions and businesses who realize the days of dirty fuel are numbered has been building for almost a decade, said Amanda Tattersall, a researcher who is involved in transition projects around Australia. Now the political and economic muscle has arrived to back it up.
“The choice is clear and that choice is about driving forward at pace and scale for Australia to become the clean-energy superpower,” said Deloitte’s Symons. “There is no playbook that we can follow. We need to chart this ourselves.”
— With assistance by David Stringer, and Michael Heath
By Swati Pandey
(article and photo credits – Bloomberg)
Associate Professor Magdalena Simonis AM is the Immediate Past President of the AFMW (2020-2023), former President of VMWS (2013 & 2017-2020) and current AFMW National Coordinator (2024-2026). She is a full time clinician who also holds positions on several not for profit organisations, driven by her passion for bridging gaps across the health sector. She is a leading women’s health expert, keynote speaker, climate change and gender equity advocate and government advisor. Magda is member of The Australian Health Team contributing monthly articles.
Magdalena was awarded a lifetime membership of the RACGP for her contributions which include past chair of Women in General Practice, longstanding contribution to the RACGP Expert Committee Quality Care, the RACGP eHealth Expert Committee. She is regularly invited to comment on primary care research though mainstream and medical media and contributes articles on various health issues through newsGP and other publications.
Magdalena has represented the RACGP at senate enquiries and has worked on several National Health Framework reviews. She is author of the RACGP Guide on Female Genital Cosmetic Surgery and co-reviewer of the RACGP Red Book Women’s Health Chapter, and reviewer of the RACGP White book
Both an RACGP examiner and University examiner, she undertakes general practice research and is a GP Educator with the Safer Families Centre of Research Excellence, which develops education tools to assist the primary care sector identify, respond to and manage family violence . Roles outside of RACGP include the Strategy and Policy Committee for Breast Cancer Network Australia, Board Director of the Melbourne University Teaching Health Clinics and the elected GP representative to the AMA Federal Council. In 2022. she was award the AMA (Vic) Patrick Pritzwald-Steggman Award 2022, which celebrates a doctor who has made an exceptional contribution to the wellbeing of their colleagues and the community and was listed as Women’s Agenda 2022 finalist for Emerging Leader in Health.
Magdalena has presented at the United Nations as part of the Australian Assembly and was appointed the Australian representative to the World Health Organisation, World Assembly on COVID 19, by the Medical Women’s International Association (MWIA) in 2021. In 2023, A/Professor Simonis was included on the King’s COVID-19 Champion’s list and was also awarded a Member (AM) in the General Division for significant service to medicine through a range of roles and to women’s health.
