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Australia to Invest $330 Million to Decarbonise Heavy Industries

Climate Change Minister Chris Bowen said the investment would ensure the future of Australia’s heavy industry amid the transition to net zero.

The Australian government has announced a “big funding boost” to help decarbonise the country’s heavy industries.

On April 24, the federal Labor government said it would spend $330 million (US$214 million) to help nine industry projects reduce their carbon emissions.

Specifically, the QAL Alumina refinery in Queensland will receive $90 million to upgrade its energy efficiency, while $52.9 million will go toward upgrading the klin and increasing alternative fuel usage at a century-old cement manufacturing facility in Tasmania.

In Western Australia, $35 million will be invested to transition Murrin Murrin cobalt and nickel operations to renewables, while $32.9 million will be dedicated to emission reduction at the CSBP chemical manufacturing facility in Kwinana.

Other significant investments include $50 million to reduce emissions intensity at the Adbri cement manufacturing in South Australia and $44 million to improve the energy efficiency of the Shoalhaven Starches food manufacturing facility in New South Wales.

The government estimated that these investments would slash around 830,000 tonnes of CO2 each year, equivalent to the emission of over 250,000 cars, and generate hundreds of new jobs during the construction phase.

Chris Bowen, the minister for Climate Change and Energy, said that this funding is vital for securing the future of Australia’s heavy industry amid the transition to net zero.

“This $330 million investment in Australia’s hard-to-abate manufacturing and mining facilities is about securing the future of high-quality, low-emissions products made right here,” he said.

“Northern Tasmania, Central Queensland, and Western Australia have been industrial powerhouses for generations, and the Albanese Government is ensuring that continues.”

“As global markets change rapidly–we’re supporting Australian industry to not only survive but thrive with our world-class products that support regional jobs across the country.”

Meanwhile, Shadow Energy Minister Ted O’Brien recently raised concerns about Labor’s massive spending on renewable energy and net zero transition.

The shadow minister cited a study by a leading energy economist showing that over $60 billion of mega energy projects that Labor wanted to build by 2030 were unaccounted for in Labor’s “radical” energy plan.

“Chris Bowen has buried a $60 billion black hole in Labor’s radical energy experiment, and it will be everyday Australian households and businesses that pay the price,” Mr. O’Brien said.

“It’s high time that Labor came clean with the Australian people and explained the true cost of its radical energy experiment.”

“Australians are paying some of the highest energy bills in the world despite false promises from Labor that it would cut household power bills by $275.”

Australia to Mimic Biden’s Inflation Reduction Act

The Labor government’s move coincides with plans to emulate Biden’s Inflation Reduction Act to enhance “green energy” supply chains and local manufacturing.

In mid-April, Prime Minister Anthony Albanese announced that his government would create the Future Made in Australia Act, a comprehensive plan to boost investment, job creation, and economic growth while achieving net zero emissions, in 2024.

The Act was expected to include taxpayer-backed incentives to subsidise advanced manufacturing and clean energy industries in the country.

Although details of the Act are yet to be disclosed, the prime minister cited similar moves from other advanced economies such as the United States, the European Union, Japan, and South Korea.

However, some top Australian economists warned against blindly mimicking Mr. Biden’s approach.

In a recent survey of 44 leading economists, an overwhelming majority opposed the idea of the government giving special support for projects that would facilitate the energy transition.

Instead, most economists believed it would be more effective for the government to provide grants to all kinds of innovative firms.

They want the government to spend more on research and development across the entire economy, like joint ventures between businesses and universities, and through institutions such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

They argue that such investments are crucial for reigniting productivity growth, which has stagnated in recent decades.

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