Some of Australia’s largest heavy industrial companies are reported to have backed a report that says they could cut direct greenhouse gas emissions in their supply chains by more than 90% by 2050, and not have to rely heavily on carbon offsets.
Prepared over three years by Climateworks Centre and the CSIRO, the report by the Australian Industry Energy Transition Initiative found that the industrial transition would cost the equivalent of $21bn a year over three decades if Australia were to play its part in trying to limit global heating to 1.5C.
It has landed during a political debate over the safeguard mechanism, the Coalition policy that the Albanese government says it wants to revamp to reduce the CO2 emitted by Australia’s 215 biggest polluting industrial facilities. The Greens have offered to support Labor’s plan if it agrees not to approve any more coal and gas mines, a step the government says it will not take.
Tagged Pathways to industrial decarbonisation, the report looked at five major supply chains for industries – including iron, steel, aluminium, chemicals and liquified natural gas (LNG). It found they could cut annual CO2 from 221m tonnes in 2020 to 17m tonnes by mid-century while steel and iron production rose by nearly 20% and aluminium production by more than 30%.
Read also: Avalanches, flash floods destroy houses in northern Afghanistan
While major gas companies have flagged continuing LNG expansions, the report estimated its production would slump after 2025 to little more than 20% of today’s levels in 2040.
Anna Skarbek, the chief executive of the Climateworks Centre, based at Monash University was quoted to have said that about two-thirds of the estimated required – equivalent to $20.8bn a year over a 30-year period – was needed in the energy system as it shifted to renewable sources, the rest in technology for industrial, electrification and energy efficiency.
While large, she said the investment was equivalent to just a tenth of the $236bn a year export value of the five supply chains examined and was comparable to other major investments.
“The transition is an investment in modernising Australia’s industrial regions and energy system,” she said.
According to reports, the industry initiative worked with companies responsible for about a fifth of the country’s industrial CO2 and a third of the market value of the ASX100. Its report included supporting statements from the Australian Industry Group, BHP, Orica, Rio Tinto and some major banks and super funds.
Woodside Energy, which is planning a large fossil fuel expansion, was also involved. It said it was pleased to receive the report and the recommendations “deserve careful consideration”.
Story was adapted from the Guardian.
