(Australian Associated Press)
If Australia acts now to help big industries cut emissions, the goal of net zero emissions by 2050 has a better chance of being achieved, a report has found.
The independent think tank Grattan Institute has called for a taxpayer-funded Industrial Transformation Future Fund to support practical ways to reduce emissions.
The industrial sector is responsible for 30 per cent of Australia’s emissions, with 80 per cent from just 194 large facilities.
Instant asset write-offs to replace older industrial equipment with newer, lower-emissions plant and machinery are also recommended in a report released on Monday, to help achieve large-scale industrial transformation.
State governments are urged to expand energy savings schemes at thousands of smaller industrial sites, building on the success of residential and commercial schemes.
Net zero by 2050 is Prime Minister Scott Morrison’s preferred policy, and the Grattan report says curbing emissions from the biggest emitters will increase the likelihood of success.
“The climate clock is ticking,” Grattan director Tony Wood said.
“Just about every capital investment decision the industrial sector makes from now on will have repercussions for emissions in coming decades.”
He said governments need to send the right signals now, so these decisions don’t lock in emissions.
Policies to ensure access to finance for investments in low- and zero-emissions industry could include a public-private investment fund, the report suggests.
State governments – some already developing renewable energy zones to support industrial parks and homes – could support “catalyst organisations” to help identify and solve infrastructure and energy supply bottlenecks.
The existing federal safeguard mechanism sets baselines for big industrial emitters, which the institute says should be beefed up.
“Do not exempt any facilities,” the report said.
Existing facilities should be encouraged to reduce their emissions using technologies that are available now.
New and replacement facilities should meet emissions benchmarks substantially better than existing ones.
“Net zero by 2050 is a tough target,” Mr Wood said.
“It requires an unprecedented pace of asset replacement and renewal, starting now.”
November’s international climate conference in Glasgow will bring together many countries seeking to agree to more ambitious emissions reduction targets.
Energy Minister Angus Taylor is proposing a safeguard mechanism using existing structures, as recommended by a panel led by ex-Origin Energy boss Grant King.
“The existing safeguard mechanism provides a framework for Australia’s largest emitters to measure, report and manage their emissions,” Mr Taylor said in a statement.
“It applies to more than 150 businesses across the industrial, manufacturing, mining, transport and oil and gas sectors.”
Mr Taylor on Monday invited industry to have a say on the design of a mechanism which will provide a credit to business that reduce their emissions, measured off an agreed baseline that critics say is not ambitious enough.
The 2021/22 federal budget allocated $279.9 million to establish the new mechanism recommended by the King review and to support investment in emissions abatement projects.