Australia as a long-term and reliable energy supplier
Thank you for inviting me here today. It’s wonderful to be back in Tokyo.
Hello to all, I would like to start by welcoming Chair of the Japan-Australia Business Cooperation Committee, Mr Hirose Michiaki and the senior business representatives joining us today.
Thanks to the Australian Embassy, including Ambassador Justin Hayhurst and staff, for hosting me today. There really is an enormous amount of work that goes into organising these visits and the Ambassador and his staff do an excellent job of making it all look so easy.
First, I would like to offer my sympathies for the tragic loss of life and the damage that occurred in the Noto Peninsula earthquake and for those killed in the runway collision at Haneda Airport here in Tokyo, both of which happened earlier this month.
It was a sad beginning to the year, but I am sure that, as always, the resilience of the Japanese people will continue to prevail in the face of tragedies.
An enduring bond
As you all know we’ve just finished our summer holidays in Australia. I was lucky enough to get a few days off and despite the very hot weather it seemed super quiet down the beach.
I was trying to figure out where everybody was and after a bit of checking around, I realised they were all here.
By my very loose estimation, about half of Australia was in Japan skiing.
I’ve been coming to Japan to ski for almost thirteen years now.
For the first couple of years we went to Niseko, but then realised there were too many Australians.
Last January I actually blew my knee at the top of the Yamabiko slopes in Nozawa Onsen and had to get the skidoo of shame down the mountain.
My eternal thanks to the ski patrol gentlemen of Nozawa who helped me down the mountain.
A school holiday trip to Japan’s ski fields is now becoming an annual pilgrimage for a very large number of Australians.
And what a wonderful thing this is. I think this illustrates the completeness of the Australia-Japan relationship.
Japan and Australia are one of world’s greatest examples of a successful strategic partnership.
We trade with one another. We rely on one another for our security.
And we holiday and ski together.
Japan is Australia’s second largest export market for resources and energy.
These exports, including LNG, iron ore and coal, were worth close to $100 billion Australian dollars last financial year, while total Japanese investment in Australia was worth $259 billion.
Coal was the first recorded traded commodity from Australia to Japan in 1865, with Japanese demand crucial to the expansion of our coal exports in the 1960s and 70s.
In my home state of Western Australia, Japanese investment initiated the iron ore industry that remains the bedrock of our economy today.
Iron ore deposits were discovered in the Pilbara in the 1950s, but were still subject to an embargo imposed by the Australian government from 1938.
It was largely in response to lobbying from Western Australia and politicians like Sir Charles Court – whose son Richard was a recent ambassador to Japan - that Canberra issued the first export licence for iron ore on 1 December 1960.
Rapidly increasing Japanese demand in the 1960s saw Australia’s iron ore export industry boom.
And it was again investment from Japan, beginning in the 1980s through the North-West Shelf Joint Venture Project in my home state of Western Australia, that opened up Australia’s Liquified Natural Gas (LNG) export industry.
Today, INPEX’s Ichthys LNG is one of Australia’s largest projects by investment cost and the single largest investment by a Japanese company outside Japan.
I was so pleased to be at the official launch of INPEX in Darwin in 2018.
Last year, Australia met 40 per cent of Japan’s gas demand.
Australia is Japan’s single largest provider of energy – and it is estimated our LNG and coal exports support around eight hours of power generation a day in Japan.
Australian resources play a critically important role in underpinning Japan’s energy security.
Australian gas is also helping Japan reduce emissions.
Australian gas is helping Japanese factories build electric cars to green our transport.
The Australian Government values the trust that Japan has placed in Australia to keep the lights on in Japan, as well as to help support the decarbonisation of the Japanese economy.
As we look to the future, I want to assure our friends in Japan that Australia will remain a trusted and reliable partner on gas.
This includes ensuring that we bring new LNG projects to fruition – such as the Barossa LNG project and the Scarborough LNG project – which will provide a much-needed source of energy for Japan as your economy decarbonises over time. This of course depends upon all regulatory approvals being met for these projects.
Meeting our commitments
The road to reaching net zero runs through Australia’s resources sector.
It is clear we will need more mining and resources, not less, to meet net zero objectives.
This includes traditional resources like iron ore and also metallurgical coal, which is still essential to the production of steel at scale.
We also know that we must massively scale up the development of critical minerals projects in order to build solar panels, batteries, wind turbines and electric vehicles.
And of course, gas will have an important role to play as a flexible and dependable source of energy as we transition to renewables.
Both Australia and Japan are committed to reaching net zero emissions by 2050.
We share similar goals regarding energy security and decarbonisation.
I was proud to join with Minsters Farrell and Bowen to sign the Australia-Japan Ministerial Economic Dialogue Joint Ministerial Statement on 8 October last year.
In this statement we reaffirmed our commitment to remaining a reliable supplier of resources and energy to Japan and the region, as countries decarbonise their economies to meet their net-zero and Paris Agreement commitments.
The Australian Government is taking decisive action to reach our targets and supporting our regional partners to reach their targets.
We know that gas in particular will continue to be needed as a transition fuel to support the decarbonisation of global energy systems.
And I thank the government of Japan, as well as industry leaders, for their engagement on Australia’s Future Gas Strategy.
We are developing this strategy to provide an evidence base for the future gas needs of Australia and our export partners.
It is essential that companies have clarity and certainty when making investment decisions.
This includes efforts that I am leading to bring greater certainty and clarity to Australia’s offshore resources regulatory frameworks.
Particularly in relation to offshore consultation, I want to move to a better regulatory system that works for everybody.
The Government is currently undertaking consultations with the industry and with the community about what a more workable offshore consultation model looks like, and I will have more to say on that in due course.
At the same time, companies need to be environmentally and socially responsible and there must be proper consultation with local communities.
Looking to the future – critical minerals and hydrogen
As we move into the future, we want to deepen our resources trading relationship with Japan.
This includes, of course, continued development and investment in traditional resources like iron ore and also metallurgical coal, the two vital inputs for steel.
Steel is needed to deliver the renewable energy sources of solar, tidal, geothermal and wind, and for transmission networks.
We also want to deepen our trading and investment relationship in critical minerals.
Critical minerals are essential inputs for the technologies that will drive the energy transformation.
Australia has abundant reserves of critical minerals and rare earths.
We have all the minerals needed to manufacture lithium-ion batteries – lithium, cobalt, graphite, and manganese.
Australia is the world’s largest producer of lithium, the fourth largest producer of cobalt and third largest producer of rare earths.
Rare earths play a critical role in developing new industries such as wind power generation, fuel cells, hydrogen storage, as well as the permanent magnets used in electric and hybrid-electric vehicles and in defence applications.
Australia has the potential to become a long-term reliable supplier to Japan of critical minerals and rare earths.
Just as Japan helped build Australia’s iron ore and LNG industries, Japan can help build Australia’s critical minerals and rare earths industry.
Australia is proud that our minerals and mining expertise continues to make a major contribution to Japan’s development and prosperity.
On 22 October 2022, METI Vice-Minister for International Affairs Hirohide Hirai and I signed a Japan-Australia Partnership concerning Critical Minerals.
The Partnership establishes a framework for building secure critical minerals supply chains between Australia and Japan and promotes opportunities for information sharing and collaboration.
The Government of Japan and Japanese businesses already have a proven record of investing in and collaborating with Australian critical minerals projects.
For example, Australian mining company Lynas Rare Earths is now the biggest producer of rare earths outside China.
Japan has supported Lynas for more than a decade with over $325 million in loans and receives priority supply rights.
We want to continue to work with the Government of Japan and Japanese businesses to encourage investment and commercial partnerships with Australian critical minerals proponents.
This will be to the benefit of both our nations and is important in diversifying the global supply chain of critical minerals.
As part of my visit here I am promoting the Australian Critical Minerals Prospectus Australia’s Trade Minister Don Farrell has just released.
The 2023 Critical Minerals Prospectus showcases 52 world-class, investment-ready projects across Australia.
These projects have significant potential to address forecast production shortfalls, build supply chain security, and deliver progress on a net-zero future.
The Australian Government is investing billions of dollars to develop Australia’s critical minerals sector and value-added capacity.
This includes the expansion of the Australian government's Critical Minerals Facility to $4 billion. And also the $57.1 million International Partnerships Program, which will support the development of end-to-end critical minerals supply chains with international partner countries.
We also updated Australia’s Critical Minerals List in December 2023.
The update brought our list in closer alignment with Japan’s, with four of the five minerals we added also considered critical by Japan – fluorine, molybdenum, selenium and tellurium.
At the same time we created a new list of Strategic Materials, which recognises the demand for resources important for the global transition to net zero, including copper and nickel. It will be imperative for us to work together into the future while the markets are disrupted with volatile commodity prices.
Australian nickel and lithium resources are produced to the highest environmental, social and governance standards, meaning we offer more sustainable and ethical critical minerals than many of our competitors.
However this is not recognised in the international market. This remains a significant concern to me.
If the world is really serious about helping the planet, we need to ensure all materials we mine and manufacture are as green and clean as they can be.
Australia and Japan are natural partners on new low emissions technologies.
This includes the development of clean hydrogen production in Australia as a source of energy for Japan.
I was very pleased in October last year to tour the Japanese carrier ship the Suiso Frontier, which was built to transport liquid hydrogen from Australia to Japan, while it was in the port of Hastings in Victoria.
It was the second time I had toured the vessel. The first time was when I visited Osaka at the facilities of Kawasaki Heavy Industries.
I look forward to our two nations working closely together to provide a commercial supply of liquid hydrogen to Japan in the future.
This fits with Japanese plans to greatly increase the use of hydrogen as part of a shift away from fossil fuels.
Our cooperation also includes the development of carbon capture and storage (CCS) projects.
METI’s draft new energy and resources diplomacy policy highlights the essential need for CCS.
In support, the Australian Government recognises the important role that CCS has to play, as part of a suite of technologies, to drive down emissions.
I have continued to provide new opportunities for investment in offshore exploration for suitable CCS sites through the 2023 Greenhouse Gas Storage Acreage Release process.
We are also undertaking work right now to update and modernise our regulatory settings for CCS, to ensure our regulatory regime is fit-for-purpose in a decarbonising economy.
Emissions have no borders.
The Australian Government is taking steps to ratify the 2009 Amendment to the London Protocol and allow for transboundary movement of CO2 for offshore storage, mostly recently through the passage of legislation through Australia’s parliament.
Australia and Japan have a long and mutually beneficial relationship that was founded in our trade of energy and resources, but this relationship is increasingly seen in our people to people links.
This only makes sense. After so many years of working together, we now play together and share one another’s culture.
The Australian Government is working to ensure we have a clear and inviting regulatory system for investors that takes into account environmental considerations and the interests of local communities.
Japan is a good friend to Australia and we will continue to be a good friend to Japan.
I assure you that Australia will remain a reliable supplier of energy resources to Japan and the region as we work together to achieve our net zero objectives.