Minerals Council of Australia's Environment and Social Governance Conference
I acknowledge the Bunurong People of the Kulin Nation who are the traditional custodians of this land and pay respect to their elders, past, present, and emerging.
It’s an honour to deliver my first speech in this new role to the Minerals Council of Australia and outline my approach to the role.
A Liberal Approach
My long-term interest in energy, emissions, and economic policy stems from a fundamental belief that as a Liberal, we carry a responsibility to our environment and must steward its abundance to the next generation.
It also comes from a keen interest in the efficient use of the world’s scarce resources and that waste is a costly missed opportunity.
In short: we should be doing “More from less” as the book by Andrew McAfee is aptly titled and that confronting our environmental challenges “won’t require radical course changes in our economies or societies. We just need to let the four horsemen of the optimist – capitalism, technological progress, public awareness, and responsive government – do more of what they do”.
As the Prime Minister said recently, - we believe climate change will ultimately be solved by ‘can do’ capitalism; not by governments seeking to control people’s lives and tell them what to do.
Getting the framework of policy right is critical – and too often those that want action on climate change have got it wrong.
Under the Kyoto Protocol, countries negotiated binding commitments to cut emissions and provided for it through the encouragement of internationally traded carbon permits akin to a carbon tax.
The international community couldn’t get countries to adopt the Kyoto model with the United States failing to ratify it, New Zealand and Canada walked away, and China wasn’t obliged to cut emissions.
Kyoto’s failed approach translated to domestic policy through various centrepiece policies - a carbon tax, emissions trading scheme or national energy guarantee – imposed by Canberra onto communities and business.
More recently we have had a push to appoint climate czars who would have veto power over the decisions because, according to some, “Australian climate policy needs to be taken out of the hands” of democratically elected representatives.
These plans are popular to some sectional interests because they shift risk off them and onto the taxpayer.
Climate policy has too often been about unsustainably empowering a collusion of Canberra, Corporates and Big Capital to impose outcomes, not sustainably empowering citizens, communities, and competitive commerce.
Sustainable policy is more consistent with the Paris framework where countries voluntarily commit to emissions cuts and the mechanisms to achieve the cuts.
Paris didn’t impose solutions, it encouraged countries to develop their own commitments and plans.
193 countries are committed and are using a diversity of approaches that work for their unique circumstances.
And more critically, this approach has led to some of the world’s current and future largest emitters jumping onboard, including China, the United States and India.
Hence, the global market is rapidly changing and is demanding lower carbon alternatives.
And like other countries, we are going to have to back our industries to sail that journey through, at times, choppy seas.
Because sitting behind the capacity to sail these seas will be the social license of government to navigate them.
Attitudes to climate action vary. For those in affluent urban communities, cutting emissions is an opportunity to save the planet and make a buck.
For those in lower income communities, it can be the difference between whether they can afford their electricity bill or not.
And for those in communities where every job depends on the nearby mine, it can be the difference between a whole community surviving, let alone thriving.
And turning a blind eye to legitimate concerns and not seeking democratic endorsement can lead to good work being unravelled.
Our long term plan
Our Liberal approach has delivered Australia’s first comprehensive, economy-wide plan to get Australia to carbon neutrality by 2050, moving with technology, responding to changing market demands and taking the Australian community with us.
This plan is built on the pillars of existing policies, but it critically focuses on utilising evolving technologies that can cut emissions and be cost competitive, so we can maintain our high living standards.
Our plan focuses on how to achieve net zero in a uniquely Australian way – by incentivising technology, not by imposing new taxes.
The task for Australia is to ensure our resources, manufacturing, agricultural and transport sectors, especially in rural and regional areas, move onto a more sustainable footing.
Low Emissions Technology Statement (LETS)
The Technology Investment Roadmap sits at the core of our plan.
The roadmap is the government’s strategy to drive down emissions and position Australia to prosper as a global leader in low emissions technologies.
This approach is adaptable and flexible – annual reviews help ensure that we stay at the forefront of technology developments.
This year’s Low Emissions Technology Statement – LETS 2021 - sets out our plan to bring low emissions technologies to cost parity with higher emissions alternatives - helping create jobs, reduce energy costs, and lower emissions.
It has been built on the back of expert advice by members of the Technology Investment Advisory Council – chaired by Dr Alan Finkel, and made up of leaders from science, business, technology, and government.
The Morrison Government has introduced ultra-low-cost solar as a new priority technology.
This takes the number of Australia’s priority technologies to 6 and they each have associated stretch goals.
The other 5 technologies, featured in our first statement, are:
- clean hydrogen
- energy storage
- low emissions steel and aluminium
- carbon capture and storage, and
- soil carbon
These technologies are designed to ensure we keep driving economic growth decoupled from the same trajectory of emissions.
While the OECD average for cutting emissions is only 7%, we have reduced ours by 20.8% on 2005 levels, while our economy has grown by 45%.
The most recent projections show that we will cut our emissions by up to 35% by 2030, well above our target of 26 to 28%.
And that’s reflected in our energy mix, with 18% from wind and solar, compared to a global average of 6.5%.
We lead the world in household solar per person and one in four Australian homes have rooftop solar that generates electricity for their home and for export to the grid.
Last week we celebrated the three millionth rooftop solar installation, and by 2030 more than half our electricity is projected to come from renewable sources.
Implications for the energy sector
While solar take up has been considerable, it is the next chapter that should excite.
Australia has what it takes to be a world leader in the global hydrogen market – and we are backing its potential.
We are investing more than $1.2 billion to accelerate industry growth to help the country become a major producer and exporter of clean hydrogen by 2030.
Like all the technologies we’re supporting, hydrogen will create new industries and help existing industries make cleaner products.
Clean hydrogen exports could directly support 16,000 jobs by 2050, plus an additional 13,000 from the construction of related renewable energy infrastructure.
Australian hydrogen production for export and domestic use could generate more than $50 billion in 2050.
We are investing in development of up to seven clean hydrogen industrial hubs in regional Australia.
These will bring together hydrogen users, producers, and potential exporters to accelerate industry growth.
They’ll also be critical in helping the hydrogen industry produce hydrogen at under $2 a kilogram.
Hydrogen is not only a technology with high potential – it is already being rolled out in regional Australia.
Last week the CEFC and ARENA announced a $15.5 million commitment to support the deployment of the largest clean hydrogen fuel-cell heavy haul trucks in the world.
The significant joint project is being undertaken with Ark Energy H2, Sun Metals Corporation, and the Queensland Government, and seeks to reduce emissions in the trucking sector and grow the hydrogen industry in Townsville.
Ark Energy’s SunHQ hydrogen hub is expected to produce up to 158 tonnes of hydrogen a year, produced with renewable energy from the Sun Metals solar farm at the zinc refinery.
This will provide fuel for a fleet of hydrogen fuel-cell electric trucks.
While this project initially focuses on hydrogen in Australia, Ark Energy aims to export hydrogen to Asia, positioning North Queensland as a major player in international hydrogen exports.
The roadmap also identifies carbon capture and storage as one of the six priority technologies.
Carbon capture, use and storage technologies are critical for sustaining the resources sector and other hard-to-abate sectors.
According to the 2021 International Energy Agency’s World Energy Outlook, critical minerals such as “lithium, cobalt, copper or rare earth elements are essential to make tomorrow’s clean energy system”.
The World Bank estimates the production of graphite, lithium and cobalt will have to increase by 450 per cent by 2050 to meet demand for energy storage technologies alone.
Extracting and processing the minerals needed for these clean technologies has their own emissions profile that must be addressed.
The deployment of cost-effective carbon capture, use and storage would help in meeting this challenge.
Additionally, it would be critical in promoting new market opportunities in LNG, hydrogen and carbon-recycled products.
In the future, carbon capture, use and storage, coupled with bioenergy or direct air capture technologies, is likely to play an important long-term role in negative emissions projects.
Australia’s competitive advantage in CCUS comes from our abundant geological storage basins, many of which are close to industries producing highly concentrated streams of CO₂ emissions.
Ongoing investment in this area is critical.
Over the next 10 years, we are investing over $300 million in CCUS technologies.
Environmental and social governance
The critical point is that Canberra can be an enabler of solutions, but it is not the sole source.
We should celebrate the significant work has been undertaken by the resources sector to invest in communities, reduce emissions and protect biodiversity and native wildlife.
The government is committed to supporting the resources sector and ensuring its activities are always carried out safely and responsibly.
The government is working hard to address regulatory burdens, including by streamlining regulations and environmental approvals to speed up projects and reduce costs.
The minerals industry’s adoption of the award-winning accountability framework, Towards Sustainable Mining, reinforces the sector’s commitment to continuous improvement in environmental and social governance.
The initiative will help companies evaluate, manage, and communicate their sustainability performance related to climate change, Indigenous and community engagement, and environmental stewardship.
You are part of the solution to Australia and the world reaching carbon neutrality.
We have a plan to back traditional industries, so we stay globally competitive, and harness new export opportunities for low emissions technologies.
It’s a shared journey and I look forward to working with the sector as we head down this exciting path.