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Moving towards decarbonisation

Australia is on a path towards achieving a net zero economy by 2050. The Government’s focus is on supporting traditional industries whilst helping to reduce costs and commercialise low emissions technology. 

Moving towards decarbonisation

Australia is on a path towards achieving a net zero economy by 2050. The Government’s focus is on supporting traditional industries whilst helping to reduce costs and commercialise low emissions technology. 

The Government’s support is focused on several key areas, hydrogen being key with an additional $275m committed in the 2021-2022 Federal Budget  towards developing four new clean hydrogen hubs and implementing the clean hydrogen certification scheme. This will include up to 10 feasibility studies to determine the best location for the hubs, with potential locations including Darwin, Gladstone and the Eyre Peninsula. 

A further $263 million has been committed to carbon capture storage (CCS) and carbon capture utilisation and storage (CCUS) projects. It’s anticipated that this funding will be applied over 10 years. 

In addition the government has also committed $565m to support low-emissions international technology partnerships. This will be spent on co-funded research and demonstration projects with the Government actively pursuing collaborations with the UK, US, Japan, Singapore, Germany and South Korea.
While these initiatives put Australia on the path towards decarbonisation, activities at each level of Government are also working towards the same goal. For example, in a recent development consent application by the SIMEC Group (SIMEC) for the Tahmoor South Coal Project, the Independent Planning Commission in NSW (IPC) placed significance on environmental measures. It did this by imposing stringent conditions on the project that included minimising Scope 1 and 2 greenhouse gas emissions. These conditions included requiring SIMEC to commission and prepare a study within two years to determine if there were any reasonable and feasible measures to further reduce Scope 1 and 2 greenhouse gas emissions. In addition they have to monitor and report on their actual emissions annual and ensure they offset any excess emissions compared to their forecast.
Interestingly, the IPC didn’t impose any conditions regarding Scope 3 emissions even though they accounted for 70% of the project's greenhouse gas emissions. This is because there was limited scope to directly reduce those emissions and the IPC found the emissions to be reasonable and acceptable. 
This example highlights that organisations can expect additional scrutiny of their projects, but there is an appetite to balance the need to reduce greenhouse gas emissions with the importance of the project.

While the industry plays a significant role in enabling other sectors to embrace clean energy, it also needs to consider its own energy use. According to the Mining Energy Consumption 2021 report, the mining industry accounts for circa 3.5% of global energy use. The industry must also look at its own energy consumption and look at ways to become more sustainable and efficient. This may come in the form of energy efficiency in processes such as grinding or the use of data and artificial intelligence to identify opportunities to reduce energy consumption.

Many companies are already looking at how they can reduce emissions. For example, Fortescue has announced that it will develop Australia’s first green steel plant while also extending its use of hydrogen and battery energy to decarbonise its fleet and plant. While BHP has introduced emission-free surface mining vehicles and is exploring carbon capture and storage. However, there is one issue that may impact businesses who are trying to meet their environmental obligations through clean energy is supply. 

KPMG has highlighted in its report Resourcing the Energy Transition: Making the World Go Round that supply chain and environmental, social and governance issues may limit access to the resources required to transition to clean energy. In particular, mined mineral and metals, such as lithium, cobalt, indium and graphite, that power green technology may be difficult to access despite their being sufficient supply globally. This is because they’re held by a small number of countries who may seek to take advantage of increased competition or ensure energy security. The report suggests that an increased focus on recycling, reusing and repurposing (known as the circular economy) may minimise supply issues.

Initiatives such as these will go a long way towards ensuring net-zero emissions are achieved, not only within the industry but also globally. 

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