Australia could generate up to $333 billion per annum in earnings from exports of products such as green steel, renewable hydrogen and ammonia, green aluminium and materials which are needed in the manufacture of environmentally friendly products and infrastructure, a new analysis shows.
In its latest report, clean energy think-tank Beyond Zero Emissions has modelled the nation’s potential to generate export earnings from four types of clean energy materials.
Under its most ambitious ‘Go for Gold’ scenario, the report suggests that Australia could derive up to $333 billion in annual export earnings from the above sources – almost triple the level of earnings from current fossil fuel exports.
In its report, Beyond Zero warns that Australia’s exports of coal and fossil fuels will be impacted over the longer term as each of our top five export markets for these products including China, Japan, the European Union, South Korea and the United States each have net-zero emission targets. (China wants to achieve NetZero by 2060; the other four markets each have a NetZero target by 2050).
Even without any revised targets at the upcoming Glasgow Climate Change Conference (COP 26), the report warns that current fossil fuel export revenue to above markets could fall from $89 billion now to just $2 billion by 2050.
Whilst it may be possible to replace revenue from these sources with that from other markets, the report warns that countries elsewhere are also moving toward cleaner fuel sources.
At the same time, it suggests that Australia can more than replace these lost earnings with earnings from ‘green exports’.
This includes sources such as:
- Critical minerals such as lithium, nickel and rare earths which can be extracted using zero emissions methods and are important in the manufacturing of clean-technology products such as batteries, solar panels and electric motors.
- Renewable (green) hydrogen energy involving hydrogen which is produced from sustainably sourced water and electricity (electrolysis) in a process powered by renewable energy.
- Green iron and green steel which is produced with renewable energy and hydrogen.
- Green aluminium products, through which Australia could export the entire supply chain from simple exports of renewably mined bauxite right through to zero-emissions alumina and aluminium.
In its report, Beyond Zero Emissions says opportunities should not be underestimated.
On critical materials, for example, the International Energy Agency expects that overall demand ap potentially increase as much as sixfold by 2040.
For Australia, this represents an opportunity in light of our abundant material supply and proximity to major markets.
On supply, Australia has some of the largest reserves of lithium, copper, nickel and cobalt in the world.
Australia also has commercial quantities of sixteen of the minerals which are used in solar panels and ten of the elements which are needed to build lithium ion-ore batteries.
On market proximity, Asian nations such as South Korea, Indonesia and Thailand have all articulated visions to be leaders in battery manufacturing and will thus require supplies of materials such as lithium.
Meanwhile, another area of opportunity is zero-emissions green steel.
This is produced using hydrogen and renewable electricity under a process known as the DRI-EAF method.
Under this process, iron-ore sourced from zero-emissions/electrified mining reacts with renewable hydrogen to produce direct reduced iron (DRI) or green iron.
This is then converted to green steel through use of a renewable powered electric arc furnace (EAF).
Alternatively, the green iron itself can be exported.
With 30 percent of the world’s iron-ore reserves, the report says Australia an unparalleled opportunity in this area.
Action is happening.
Earlier this year, Fortescue Metals announced plans to build Australia’s first green-steel pilot plant.
Already, the company has successfully produced green iron.
In its report, Beyond Zero makes recommendations in several areas.
- Setting a national export target of $100 billion for renewable hydrogen, green steel, green aluminium, and critical minerals by 2035. This will signal to investors and project developers that Australia is open for clean commodity business.
- Setting green export investment as a priority within the Department of Foreign Affairs and Trade, Austrade and Export Finance Australia. This is important in order to align our export targets to the ambition of key trading partners (Japan, South Korea, US, EU, and China) and to cement Australia’s place within their decarbonised supply chain.
- Establishing a Supergrid Deployment Authority with a $20 billion lending facility and a remit to undertake large scale investments in grid infrastructure.
- Launching a five-year national rollout of Renewable Energy Industrial Precincts in 14 priority regional locations which will become the industrial engines which power Australia’s clean zero-emissions export market.
Beyond Zero Emissions CEO Heidi Lee says important of action should not be underestimated.
Lee says regional Australia in particular stands to benefit as the move to green exports generates quality employment opportunities in regional locations.
“In the three decades leading to 2050, the world will decarbonise. Australia can choose to become a green export powerhouse and reindustrialise the nation or miss our chance by not acting today,” Lee said.
“There is a massive demand in the coming decades for these green exports from businesses, industry, investors and our key trading partners.
“Australia is perfectly placed with the renewables, raw materials, skills and ESG credentials to meet this demand.”