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Aurecon backs research into industrial regions’ support of Australia’s net zero transition

Aurecon supports the Australian Industry ETI reports for Australia’s net-zero transition.

The report finds industrial regions can contribute to reaching state and national net zero emissions targets by 2050 while driving employment growth and building Australia’s climate resilience.

20 June 2022 – Alongside 17 of Australia’s largest companies, international design engineering and advisory company Aurecon contributed to a report released today from the Australian Industry Energy Transitions Initiative that found an 88 per cent cut to heavy industry emissions is possible and would set up key regions for the net zero transition.

Major industrial regions – including the Pilbara, Kwinana, Hunter, Illawarra and Gladstone – have the natural resources, workforce and baseline infrastructure that can be expanded to support, according to the report released today.

The report shows an 88 percent reduction in current emissions is possible in these five regions, which together account for about one-eighth of Australia’s total emissions. This is the equivalent to 70 MtCO2e of abatement, or to removing all emissions from cars and light commercial vehicles across Australia.

The ‘Setting up industrial regions for net zero’ report is the result of a two-year collaboration between some of Australia’s largest companies, as part of the Australian Industry Energy Transitions Initiative (Australian Industry ETI), which is entering its final phase.

The 18 initiative partners represent approximately 30 percent of the ASX100 market value. They include Australian Gas Infrastructure Group, APA Group, Aurecon, AustralianSuper, BHP, BlueScope Steel, bp Australia, Cbus, the Clean Energy Finance Corporation, Fortescue Metals Group, HSBC, Orica, National Australia Bank, Rio Tinto, Schneider Electric, Wesfarmers Chemicals, Energy & Fertilisers, Westpac and Woodside.

The report finds Australia’s industrial regions can capitalise on global demand for low-carbon products and energy exports. This is through coordinated planning and development of multi-user infrastructure, the setting of regional net zero targets and the co-development of regional decarbonisation roadmaps, among other recommended actions.

Aurecon Chief Executive Officer William Cox said the transition to net zero needed a regional focus in Australia.

“It is in everyone’s best interests for Australia’s industrial regions to decarbonise, so they continue to prosper in the long term. Aurecon is seeing first-hand the innovation and momentum already being achieved by heavy industries’ collaboration and investment in decarbonisation projects.”

Chair of the Australian Industry ETI Simon McKeon AO said through analysis of the decarbonisation potential of five important industrial regions where Australian Industry ETI participants are active, invaluable insights were gained into the opportunities and on-the-ground challenges in the net zero transition.

“Australia can remain competitive in a decarbonising global economy. But this will require coordinated efforts across industry, governments and communities and also the finance and energy sectors. It will also need the alignment of policy, regulations and programs to create clear goals and investment confidence,” Mr McKeon said.

The report was prepared for the Australian Industry ETI by not-for-profits Climateworks Centre and Climate-KIC Australia, which are co-conveners of the initiative. It finds industrial regions can contribute to reaching state and national net zero emissions targets by 2050, while driving employment growth and building Australia’s climate resilience.

“This is achievable if we rapidly deploy existing technology solutions and support the development and demonstration of emerging opportunities through more proactive regional coordination and collaboration,” said Climateworks Centre CEO Anna Skarbek.

The report reveals the scale of renewable energy required to decarbonise five industry supply chains in the Pilbara, Kwinana, Hunter, Illawarra and Gladstone would be an additional 25-47 percent of Australia’s total electricity generation, or 68.3 to 125.9 TWh of energy.

“This will require an unprecedented transformation of the energy system,” said Ms Skarbek. “Governments will have a significant role to play in achieving this, with supportive policy, programs and support for regional leadership efforts, especially in infrastructure which is an enabler of decarbonisation.”

The required renewable energy infrastructure, green hydrogen and energy storage has the potential to create job opportunities for 178,000 to 372,000 Australians. The investment in these regions and enabling infrastructure would be in the order of $50 to $100 billion, the report finds.

The formation of clustered industrial precincts is a key opportunity for Australian industry and in regions where hard-to-abate sectors are concentrated.

“Australia’s industrial regions make an enormous contribution to the economy and are hugely significant in terms of jobs and identity. The regions we studied already have the industries, concentration of energy demand, investment, ports, industry knowledge and skills we need for Australia to thrive through the transition,” said Chris Lee, Climate-KIC CEO.

“This is because precinct-scale responses present opportunities to leverage multi-user infrastructure and existing workforce skills, and more effective use of transmission, distribution and storage infrastructure, which drives emissions down.”

The Australian Industry ETI brings together key industry and finance participants to accelerate action towards achieving net-zero emissions in supply chains by 2050, across critical sectors known as ‘hard-to-abate’ given their high emissions and relatively higher abatement costs.

The Australian Industry ETI focuses on reducing supply chain emissions across five sectors: iron and steel; aluminium; LNG; other metals, including copper, nickel, lithium; and chemicals, such as fertilisers and explosives.

The Australian Industry ETI is run by independent not-for-profits Climateworks and Climate-KIC, in collaboration with the global Energy Transitions Commission. Its knowledge partners include CSIRO, Rocky Mountain Institute and BloombergNEF. It is funded by philanthropy, company contributions and the Australian Government through the Australian Renewable Energy Agency’s (ARENA) Advancing Renewables Program.

With momentum building across Australia’s economy to decarbonise, the next phase of the initiative will focus on setting decarbonisation pathways for Australia’s industrial supply chains, in line with the global goal of limiting global warming to 1.5 degrees Celsius.

‘Setting up industrial regions for net zero: A guide to decarbonisation opportunities in regional Australia’ will be published on 20 June 2022 and available online at Australian Industry Energy Transitions Initiative.

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