The Smart Energy Council is pleased to support the Albanese Government’s ambitions to develop a green metals industry. As a leading voice in the energy industry, we recognise the importance of green metals in the development of clean energy technologies, and vice versa.
The Smart Energy Council (SEC) is the peak independent body for Australia’s smart energy industry, representing over 1,300 residential, commercial, and large-scale renewable generation and storage companies, smart transport firms, as well as the renewable hydrogen and ammonia industry.
Zero Carbon Hydrogen Australia (ZCHA) is the peak body for the green hydrogen sector in Australia and a division of the Smart Energy Council. We represent 200+ domestic and international renewable hydrogen members, making us the largest peak body in the Asia-Pacific region.
The Smart Energy Council and Zero Carbon Hydrogen Australia has a significant number of member companies that are developing or working on green metals projects in Australia, including Quinbrook, who is developing the green iron project announced by the Federal Treasurer, Jim Chalmers, in Gladstone in May 2024. That project will use a significant proportion of the green hydrogen being developed by the Central Queensland Hydrogen Project, another leading member company.
Key Conclusions and Recommendations:
The Smart Energy Council was disappointed that green metals were not included in the very significant Future Made in Australia policy announcements and Production Tax Credits announced in the May 2024 Federal Budget.
This was a missed opportunity. As evidenced by Quinbook’s Gladstone announcement, there are very real and very significant green metals opportunities in Australia right now. These projects would have been fast-tracked with appropriate support in the May 2024 Federal Budget.
It is imperative that support programs are put in place as soon as possible – the Mid-Year Economic Forecast (MYEFO) in December 2024 – to unlock investment in green iron and green metals.
Support for the green metals industry will help to ensure a stable and sustainable supply of these vital resources, laying the foundations for Australia to be a Renewables and Critical Minerals Superpower. We urge policymakers to take swift action to implement the following important measures.
Key Recommendations:
- Establish a $10-30 Billion Green Metals Fund: Develop a complementary mix of funding and Production Tax Credits that supports the creation of a competitive green metals sector, with a total investment of no less than $10 billion announced in MYEFO.
- Enhance Renewable Electricity Supply: Accelerate efforts to expand the generation of renewable electricity to meet growing demands. Prioritise investment in renewables projects in regions that are hosting green iron and metals projects.
- Integrate Community and First Nations Benefits: Embed community benefits principles and First Nations capacity building and benefit sharing as conditions for investment recipients.
- Exclude Fossil Fuel-Powered Projects: Prohibit investment support for projects that use fossil fuels, such as fossil methane or coal, in the production of green metals.
The SEC is also pleased to support the overall Future Made in Australia plan. The Future Made in Australia agenda is about attracting and enabling investment, making Australia a renewable energy superpower, value‐adding to our resources and strengthening economic security, backing Australian ideas and investing in the people, communities and services that will drive our national success.
The Smart Energy Council echoes Climate Energy Finance (CEF) in seeking an urgent imperative for the Federal Government to establish the policy and budget support to accelerate the development of a competitive Australian green metals industry by investing a minimum of an additional $10-30bn capital and direct budget support in the 2024-25 Mid Year Economic and Fiscal Outlook (MYEFO), building on Treasurer Jim Chalmers’ $22bn budget support provided in May 2024, and the $40-45bn of capital support established in May 2023 (via the NRF, NAIF, EFA, CEFC, ARENA). The employment and private investment potential for this is huge, and the strategic need is likewise compelling given the long term terminal threat to Australia’s A$220bn of fossil fuel exports in 2022-23.
The total investment should be deployed strategically via a complementary mix of financing mechanisms, including:
- Production Tax Incentives of $10bn for green metal refining, expanding on the Critical Minerals Production Tax Incentive introduced in the Federal Government’s 2024-25 budget to cover strategic metals imperative to Australia’s economic resilience and security, and to the global transition to net
zero, and complementing the Hydrogen Production Tax Incentive to lower the cost-differential for first movers in embedding decarbonisation. - Contracts-for-Difference (CfD) to further bridge the gap between the green premium present during early development of low-emission value-added capacity, allowing Australia’s first movers to export Australia’s world-leading renewable energy resources to our key trading partners in a globally
competitive market. - Public procurement for green metals to create national demand signals for decarbonised bulk commodities and strategic metals, introducing emissions intensity requirements for public infrastructure, defence projects, and government-funded renewable energy and associated transmission and
distribution projects. - Establish an Australasian Green Iron Corporation Joint Venture between the Federal Government of Australia and governments of Australia’s key trading partners to enable international partnerships and collaboration across the green metals value chain, incorporating Australia’s iron ore mining majors, international leaders in steel production, and representative industry bodies. This will facilitate the transfer of critical skills, technology, investment, and alignment of decarbonisation objectives to reduce domestic and exported emissions.
- Establish a new $10-20bn mandate in the Future Fund to undertake strategic, public interest, patient equity and infrastructure investments into value-adding Australia’s world leading critical minerals and strategic metals onshore powered by renewable energy so we export embodied decarbonisation in aid of the decarbonisation objectives of our key Asian trade partner economies whilst starting to pivot Australia’s current commodity export profile away from its massive overreliance on fossil fuels ($220bn in 2022-23 of LNG, coking and thermal coal).
Australia cannot become a renewable energy superpower without renewable energy generation. For a green metals industry to become the success that it should be, there needs to be more support for the rollout of large-scale renewable energy projects.
We strongly encourage the federal government to collaborate with the states and territories to reform planning and environment laws to allow for the speed of rollout that is required for this level of ambition. We strongly urge faster progress with the Nature Positive reforms, however this enabling legislation needs to be a strong priority to allow for a strong green metals industry.
We also support the integration of industrial demand response mechanisms into Australia’s existing and future refineries that will be connected to the grid. The electrification and scaling of Australia’s onshore capacity in green metals refining will require significant new renewable electricity demand.
Leveraging industrial demand response during periods of peak power demand and renewable energy droughts will significantly lower the need for additional renewable energy generation, long-duration storage projects, transmission infrastructure, and reduce overcapacity / gold-plating of the National Electricity Market and WA’s South-west Integrated System during the energy transition.
The Smart Energy Council also supports Climate Energy Finance’s view that the Department of Foreign Affairs and Trade and Austrade should be given a clear new mandate to build international collaboration and consensus to work towards an Asian Carbon Border Adjustment Mechanism (CBAM) to extend and reinforce the merits of the EU CBAM introduced in October 2023.
Enhancing the value of Australia’s key resource exports by onshore value-adding, powered by firmed renewable energy means the addition of embodied decarbonisation is a $100-200bn annual trade value uplift opportunity, but only if there is the right price signal incorporated in Asian trade . Foreign Minister Penny Wong and Trade Minister Don Farrell need to step up internationally and support the onshore decarbonisation efforts of Ministers Chris Bowen, Ed Husic and Jenny McAllister and leverage the domestic progress made with the Safeguard Mechanism and the ambitious 82% Renewables by 2030 target.
