Policy Clarity and Cheap Renewables Crucial for Industrial Decarbonisation

Strategic Insights -

Business leaders from leading companies in Australia stressed the importance of policy clarity, cheap renewable energy, a viable carbon market, and partnerships for achieving decarbonisation in industrial and mining companies. Orica's CEO, Sanjeev Gandhi, emphasized the need for policy certainty, citing the unpredictability of policy changes as a major obstacle to investment. Gandhi also highlighted the significance of a viable carbon market, with over 200 large-emitting facilities covered by the Safeguard Mechanism, and the importance of cost-competitive renewable energy to support continuous manufacturing assets.

Key Takeaways:

  • Policy clarity and certainty are essential for industrial decarbonisation, as businesses fear policy changes that can undermine investment decisions.
  • A viable carbon market and cost-competitive renewable energy are critical for achieving decarbonisation in industrial and mining companies.
  • Government support for investment in new technology will be necessary to decarbonise heavy industry, which is difficult and expensive.
  • Businesses must aim to meet not only their own targets but also those of the host nations within which they operate.
  • Imperfect solutions and infrastructure are likely to be part of the transition process, as it's difficult to choose an ideal way of getting to the next step.
  • Carbon markets can channel finance into the development of solutions to the climate crisis.
  • BHP and Rio Tinto are partnering to bring electric trucks to Western Australia to test their viability in a rugged environment.
  • Investors are seeing opportunities to deploy capital during macro dislocations, such as valuation dislocations and fear.

Statistics:

  • 200 large-emitting facilities are covered by the Safeguard Mechanism.
  • Orica's site in NSW has achieved a cumulative total of one million tonnes of abatement by implementing emissions reduction technologies.
  • Industrial facilities and mines can have a lifespan of up to 100 years.

Sources:

  • Carbon Market Institute, Expert Insights from Australasian Emissions Reduction Summit

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