Australian Prime Minister Anthony Albanese has announced an initiative modeled on the US Inflation Reduction Act (IRA) to seize opportunities associated with the global renewable energy transition and to capitalize further on the country’s significant clean energy resources.
“There’s a race for opportunity, a race for jobs on, and Australia can’t afford to sit on the sidelines, we must participate,” Albanese said. “Being in the race does not guarantee our success but sitting it out guarantees failure. Our government wants Australia to be in it to win it.”
The Future Made in Australia Act, likely to be a pillar of the budget in May, is designed to build local industries focusing on the clean energy transition including renewable hydrogen, solar power, battery energy storage systems, green metals, and emerging renewable sources and technologies.
“We can make more things here,” Albanese said. “We can compete with the world. We can be the world’s biggest producer of green hydrogen, powering a new generation of advanced manufacturing, having green metals, producing batteries here. It’s about using the assets that we have under the ground, in the sky, to produce advanced manufacturing, creating jobs and economic growth and prosperity right here in Australia.”
Albanese said the green energy manufacturing revolution needs to be led by the private sector, but acknowledged that the government should be prepared to provide loans or support to make sure that those industries can get off the ground, noting there is a “new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.”
“This is about giving Australian businesses, Australian communities and the Australian people every possible opportunity to benefit from this moment,” he said.
The unveiling of the new act has been widely welcomed, with Clean Energy Council Chief Executive Kane Thornton saying that it marks a decisive moment for Australia’s ambition to secure a key place in the global clean energy industry after the United States’ $369 billion IRA vastly redefined the international race to net zero.
“While the size of Australia’s economy means we cannot match the full scale and reach of the IRA, smart and focussed policy and funding support can leverage our comparative advantages and expand our markets and economy,” Thornton said. “Establishing a coordinated response and building a more competitive renewable energy industry at home will create new jobs and opportunities, help Australia and the world to meet its climate and emissions commitments and ultimately set Australia up for future economic success.”
It is expected the new Future Made in Australia Act will have under its remit numerous already-announced policies and programs designed to bolster domestic manufacturing capability.
These include the National Reconstruction Fund, the Hydrogen Headstart scheme, the critical minerals strategy, and the recently announced Solar Sunshot program.
More policies and investment incentives are expected to be announced in the May budget.
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