Net zero: Anthony Albanese powers ahead with Australian-made battery plan (copyright link)

Albanese powers ahead with Australian-made battery plan

Ronald MizenSenior reporter

May 23, 2024 – 12.01am

Save

Share

Gift this article

New

Listen to this article

5 min

The Albanese government will back Australian-made batteries that support a renewable energy grid, arguing local firms have competitive advantages in cleaner, safer, more cyber-secure batteries adapted to local conditions.

Prime Minister Anthony Albanese on Thursday will launch a National Battery Strategy that outlines five key priorities for the $523 million allocated in last week’s budget for a “battery breakthrough” initiative.

Australian Prime Minister Anthony Albanese is backing local battery-making. AAP

The strategy says by 2035 Australia can be a globally competitive producer of batteries, with a focus on grid-level utility products and those powering businesses and households.

It also talks up the opportunities for local makers to move up the value chain and provide active materials into the global automotive industry, including materials that qualify for subsidies under the US Inflation Reduction Act.

“We want to make more things here and, with global demand for batteries set to quadruple by 2030, Australia must be a player in this field,” Mr Albanese said ahead of the strategy’s release.

The five key priorities for investment are boosting local manufacturing, building knowledge and skills, securing a plan in global battery supply chains, leading the world on sustainability, standards and the circular economy, and bringing all levels of government together to collaborate.

The plan comes after Treasury last week played down Labor’s push to create a local battery-making industry, strongly indicating the billions of dollars needed would be better spent elsewhere.

The government’s key economic adviser indicated that while there was currently “extreme concentration of solar and battery supply chains”, many countries were well ahead of Australia in developing local industries.

As a result, local buyers could be better off buying cheaper solar panels and batteries subsidised by foreign, allied governments, while Australia focused on its natural competitive advantages.

But Industry Minister Ed Husic pushed back against the critics, saying a failure to develop a local industry “sells us short and compromises our economic security”.

“A Future Made in Australia will be a future powered by batteries, which makes investing in a home-grown battery industry overwhelmingly in the national interest,” Mr Husic said.

The strategy said the focus would be on helping local companies bridge the commercialisation gap and likened the investment to the building of ports, roads and railways that supported the development of traditional industries such as resources and agriculture.

Former ACCC chairman Rodd Sims, who has expressed reservations about Labor’s push to industry policy, will strongly back The Future Made in Australia policy on Thursday in a speech to the Superpower Institute.

Mr Sims said after reading Treasury advice outlining the rationale behind the government’s Future Made in Australia policy released with last week’s budget, he felt confident it was the right move.

The former competition watchdog chief said the opportunity for Australia was to remove not only the 1 per cent of emissions it contributed to the world, but also around 6 per cent to 9 per cent of overall global emissions.

But diverging slightly from the Albanese government’s concerns over a highly centralised supply chains involving China, and echoing elements of Treasury’s advice about cheaper overseas alternatives, Mr Sims said Australia’s largest trading partner was “crucial” and “not a threat”.

“China will be a key partner for Australia,” he said.

“It produces low-cost solar panels, wind farm equipment and batteries, as well as electric vehicles. China has contributed a great deal to costs falling dramatically worldwide, and will continue to do so.”

Western Australia Premier Roger Cook on Wednesday signalled his state was unlikely to aggressively pursue downstream battery-making, though WA’s own strategy said it was open-minded to “niche opportunities”.

Federal Labor’s strategy cited opportunities to not only develop a local battery-making industry for the Australian grid, but also one that sells into countries in similar climates, including South-East Asia and the Pacific.

And in addition to grid-level utility batteries and value adding up the supply chain, the strategy highlights the opportunities from supplying the growing demand for batteries in existing bus, truck, boat, mining equipment, defence and caravan manufacturing industries.

“As Australia grows its critical minerals processing and refining capabilities, the costs of vertically integrated production of battery-active materials are in turn expected to decline,” it says.

“This will provide Australian producers with a cost advantage relative to international competitors.

“This is especially the case for battery-active materials and batteries that are installed for final use in Australia, such as flow batteries that are integrated into renewable electricity systems and industrial facilities.”

Underpinning the strategy is a view Australia has competitive advantages in cleaner, safer, more cyber-secure batteries adapted to local conditions.

It argued Australia would use fewer emissions to make batteries than global competitors, utilising better ASG standards. This would make locally made products more attractive for countries pushing towards net-zero targets.

It also said demand from Australian customers for products that meet high cybersecurity and climate resilience standards will also provide a source of differentiation for some domestic manufacturers.

Ronald Mizen reports on politics, economics, business and the law, with a focus on corporate regulators, lobbyists and investigations from Parliament House, Canberra. Connect with Ronald on Twitter. Email Ronald at ronald.mizen@copyright link