Future Made in Australia will go some way to boosting sustainable growth and creating jobs, but it will not be enough

Authors: Sanjoy Paul from the University of Technology Sydney and Priyabrata Chowdhury from RMIT University

The shift towards net zero emissions and greater international competition have created new opportunities for clean energy industries – poised to shape the global economy in the coming decades.

To capitalize on these opportunities, the Government has developed a long-term strategic initiative called the Future made in Australia program.

First announced by the government last month and with a total investment of $22.7 billion over the next decade, the program aims to attract private investment to priority areas while supporting net zero policies.

The government has identified five priority industries – renewable hydrogen, critical minerals processing, green metals, low-emission liquid fuels and clean energy production.

The focus is on those sectors that will receive tax incentives and other benefits to become a global leader in the drive towards net zero emissions, stimulating the wider economy and industrial sectors.

Greater challenges

Despite positive intentions, there are serious challenges.

These include ongoing implementation, attracting new local and global partners, and gaining local community support to build the necessary infrastructure such as wind turbines and energy transmission lines.

Other challenges include complex mining operations for key minerals in remote areas, huge upfront capital costs, hydrogen transportation issues and the cost competitiveness of alternative production locations.

The current budget that will be spent over the next decade on five key sectors is significant. However, to achieve the intended effect, the program requires extension.

Expanding priorities

While the critical minerals sector is already a priority, expanding the program to create a large-scale battery supply chain that requires critical minerals such as lithium, nickel and cobalt would enhance Australia’s competitiveness.

A sovereign battery supply chain would help secure the renewable energy storage system and contribute to the production of electric vehicles.

In line with this, the government has developed a National Battery Strategy. However, the focus should be broadened to export and installation in residential and business premises.

The battery supply chain would help store renewable energy.
Scharfsinn/Shutterstock

Given concerns about supply chain disruptions, especially at a time of heightened global tensions, priority should be given to other sectors, including health care and food processing.

Developing these industries, which are highly susceptible to disruption, is important for community well-being and economic security.

Becoming more self-sufficient

Since the Covid-19 pandemic, Australia has experienced huge shortages of key medicines, including blood thinners, antibiotics and hormone replacement therapy drugs.

By extending the Future Made program to health products, Australia could increase domestic production of key medicines and protect against future shortages. It would also increase Australia’s export opportunities.

Australia could increase exports to Asia by taking advantage of free trade agreements with China, Japan, Korea and other countries in the region.

The development of local food manufacturing and processing industries should also be a priority to protect against supply disruptions that have already occurred as a result of the Russia-Ukraine war, climate disasters and the pandemic.

The food industry provides the majority of jobs in Australia, highlighting its importance to the country’s economic resilience.

With the right government policies, the food and grocery sector could double in size by 2050, increasing employment by 54% to 427,000 people.

Reduction of emissions

Agriculture should also be on the priority list. This sector alone was responsible for 16.8% of the country’s total greenhouse gas emissions in 2020-21.

It is therefore necessary to ensure the sustainability of freight transport and the production of agricultural inputs such as energy and water to achieve the net zero emissions target. Green technologies should replace existing carbon-producing equipment and machinery in the agricultural sector.

Agriculture is a large emitter of carbon dioxide and should be included in the Future Made in Australia program.
BearFotos/Shutterstock

The sector can also be carbon neutralized using microalgae-based technologies. Moreover, microalgae-based technologies can reduce carbon emissions and pollution in many other emission-intensive manufacturing industries.

Therefore, the program should also include the process of development and large-scale implementation of green and microalgae-based technologies.

Benefits of Future Made in Australia

The potential benefits of the Future Made in Australia program include job creation and skills development, strengthening local industries, securing supply chains and maintaining their independence, long-term economic growth and reducing greenhouse gas emissions.

Existing priorities envisage the creation of numerous jobs in the manufacturing industry, especially in the renewable energy sector. While job growth will be particularly strong in central and northern Queensland, which have been targeted as renewable energy and hydrogen hubs, job growth will also increase in other parts of the country.

With an allocation of $91 million for clean energy workforce development, $55.6 million to build a women’s careers agenda, and $178.6 million in skills and employment support for transition regions, it is expected to deliver transition, the program will make a significant contribution to job creation in the clean energy and advanced manufacturing sectors.

New investment and tax incentives will help develop new industries and stimulate existing ones, including the production of hydrogen and key minerals. These incentives will help hydrogen projects reach commercialization faster and develop green energy capacity to strengthen the renewable energy sector.

Recent research has placed Australia third in the world for renewable electricity prices in 2030 and 2050, demonstrating its global competitiveness and potential for economic resilience and growth.

Australia is likely to benefit from exporting renewable hydrogen to its international trading partners, including Japan, which plans to import one million tonnes a year, and the European Union, which will import 10 million tonnes by 2030.

The cost of exporting various hydrogen carriers to Japan is the lowest in Australia compared to its competitors.

Similarly, Australia could leverage its enormous iron and bauxite production capacity to become one of the world’s cheapest places to source green metals.

How Future Made could be even better

The Future Made program is addressed to five priority industries: renewable hydrogen, processing of critical minerals, ecological metals, low-emission liquid fuels and clean energy production.

Extending the program to other critical industries such as agriculture, food processing and health products manufacturing and their supply chains will improve Australia’s economic resilience and security by creating more jobs and ensuring a smooth supply of essential products during future disruptions.

Main photo: Kamal Abdelhafeez/Shutterstock

Sanjoy Paul, Associate Professor, UTS Business School, University of Technology Sydney and Priyabrata Chowdhury, Senior Lecturer, College of Business and Law, RMIT University

This article is republished from The Conversation under a Creative Commons license. Read the original article.