Net zero push by Australia’s heaviest emitters gets warm response down under
A collective statement signed by Australia's industrial and financial sector companies signals cautious optimism down under
A group of 18 Australian companies have come out to sign a collective statement outlining a strategy to decarbonise heavy industry supply chains.
The list includes some of the heaviest emitters down under, including energy sector giants BP and Woodside in addition to mining behemoths BHP and Rio Tinto.
Australian institutional investors Construction and Building Unions Superannuation and AustralianSuper are also part of the mix.
One of the key takeaways from the letter is that getting regulators, corporates and capital markets on the same page is vital.
Given that a successful decarbonisation of industry requires interdependent, coordinated strategies executed at scale, stakeholder alignment would be a requisite first step. This message is at the heart of the collective statement.
The letter also highlights the role governments and regulators play in incentivising the transition.
“We will encourage and support federal and state governments as they develop an economy-wide suite of policies to support the above objectives, including measures to drive down emissions, reduce barriers and support investment towards the transition”, the companies stated.
The signatories are all participants in the so-called Australian Industry Energy Transitions Initiative (AIETI). Over the past three years, the group has engaged in research and advocacy surrounding transition strategies in Australia’s hard-to-abate sectors.
In February 2023, the group published a report warning that even though the decarbonisation targets under a 1.5ºC pathway were extremely ambitious, “the costs of failure are unacceptable”.
The report includes detailed strategies for a range of sectors including aluminium, iron and steel, materials and chemicals.
The collective statement builds on the report, making the case that decarbonising Australia’s collective industry is not only possible but also necessary.
Balancing energy market goals
The signatories of this week's letter include companies with both direct and indirect exposures to energy supply chains. Implying that energy security and energy transition are highly relevant trends for the group.
The statement warns against viewing these two goals as mutually exclusive.
The companies wrote that “the current global energy crisis highlights the need for energy security. However, this should not distract from the imperative to reduce emissions. In fact, it presents an opportunity to plan for and invest in the future energy system we need”.
The statement sets out a vision for heavy industry decarbonisation that it says is achievable. The fact that the companies have a common definition of what is possible for the industries to achieve is hugely significant.
Responses across Australia
In response to the letter, Clean Energy Finance Corporation (CEFC) CEO Ian Learmonth said, “the Australian Industry Energy Transitions Initiative shows that despite the complexities of the challenge ahead, the heavy industrial sector has clear and tangible pathways to get to net zero”. CECF is a signatory to the statement.
Caroline Banhidy, a non-executive director at Foresters Financial hailed the statement.
“Great to see the push by industry for ambitious decarbonisation of Australian industry including recognition of the stretch necessary to turn the dial”, Banhidy wrote in an online post.
Despite the strategic complexities, signatories to the statement are optimistic about achieving the decarbonisation targets.
“We are ready to seize this opportunity and are calling on others to join us. We know Australian industry is up for this challenge, and we’re ready to work together to get there”, the statement concludes.
Signatories to the statement are Ai Group, AIGN, AustralianSuper, Aurecon, BHP, BlueScope Steel, bp Australia, Cbus, Clean Energy Finance Corporation, Fortescue Metals Group, HSBC, Orica, Rio Tinto, Schneider Electric, Wesfarmers Chemicals, Energy & Fertilisers, Westpac and Woodside Energy.