This road map focuses on growing manufacturing activities, capabilities and specialisations in the recycling and clean energy sector. To help businesses seize economic opportunities from sustainability trends, the clean energy transition, and waste reduction demands, we have identified key actions that will be implemented as part of this road map.
Key to achieving our goals are the 3 streams of the Government’s $1.3 billion Modern Manufacturing Initiative that will leverage co-investment with states and territories, industry and research institutions:
- Collaboration Stream—will bring together businesses, researchers and investors to build economies of scale and allow them to compete in international markets
- Translation Stream— will support projects to translate good ideas into new or enhanced commercial outcomes
- Integration Stream—will target the integration of local firms into global value chains.
Co-investments to support translation and commercialisation, supply chain integration and collaboration will help Australian businesses develop world-leading products and mobilise large-scale investment. The road map acknowledges that there are significant areas of overlap between these streams. Collaboration is encouraged in all co-investments, and many investments in practice could cut across all 3 areas. For example:
- manufacturing a new product from recycled material could need translation of a new manufacturing process from the lab to the production line, integration with the product requirements of consumer-facing brands, and collaboration across material processors, remanufacturers, and product designers
- manufacturing a new clean energy system at industrial scale could need translation of novel intellectual property, integration with the supply chain for a project (to achieve scale), and collaborations between innovative firms, project developers, and upstream and downstream manufacturers.
These are key actions across the 3 streams to ensure Government and industry achieve the vision and goals of this road map.
Actions to support greater commercialisation and translation
Use co-investment to help businesses find, design, develop and make world-leading product solutions.
This action will directly enable manufacturers to collaborate to commercialise great innovations and de-risk product development. It will enable competitive enterprises to proactively find and create the demand they need by hunting down fresh market niches. It will support product development that brings together manufacturers, suppliers and customers.
It will encourage businesses in different parts of the value chain to collaborate to realise product opportunities such as turning waste into a resource, decarbonising production, replacing problematic materials, or providing a clean technology product.
For example, in recycling and remanufacturing:
- designing out a hard-to-recycle product element (such as in packaging) will probably need a collaborative solution developed by manufacturers and their retail clients that meets product and regulatory requirements
- finding novel economic applications of underused recycled material streams will likely require collaboration between upstream and downstream manufacturers, so that a material’s distinct properties can be considered in product or process modification
- building in post-production services, so products can be returned to manufacturers for recycling into new products, will likely require close collaboration between a designer, manufacturer and retailer of that product. It may also require collaboration with providers of enabling digital infrastructure technologies such as Internet of Things, sensors, and artificial intelligence.
In clean energy it could include:
- developing bespoke technology solutions for large, complex, or first-of-a-kind projects (for example, clean energy export)
- assisting a small technology provider to quickly commercialise and scale an innovation to grasp a supply chain opportunity.
Actions that support integration with domestic and international supply chains
Use co-investment to encourage large projects or commercial customers to partner with small, innovative Australian manufacturers and integrate them into supply chains.
This action will enable manufacturers to collaborate with customers to integrate their products into changing domestic markets, major domestic projects, and international markets.
Co-investment in recycling and remanufacturing can:
- encourage large commercial and industrial customers to investigate opportunities to test the competitiveness of Australian manufacturers in meeting their needs. This could include collaborations which enable Australian manufacturers to accept end-of-life products and remanufacture them for retail lines
- enable manufacturers to alter their production processes to meet the procurement requirements of their clients (for example, using a recycled feedstock often requires re-tooling and alterations to a production line)
- facilitate contract commitments by customers allowing a manufacturer to demonstrate how a recycled material could be used.
Co-investment in clean energy manufacturing can:
- help manufacturers to integrate their components into large clean energy projects. This will assist small Australian firms to invest confidently in additional production capacity or bring innovations to commercial scale
- enable manufacturers to alter their production processes to meet the procurement requirements of their clients (for example, integrating clean energy often requires new capital equipment and changes to manufacturing processes)
- facilitate contract commitments to allow an Australian manufactured product to substitute for a product which is sourced from overseas suppliers.
Actions to support greater collaboration through shared infrastructure and innovation precincts
Use co-investment to support scale-up, commercialisation, and collaboration opportunities flowing from industrial hubs.
This action will boost manufacturing by helping businesses tap into industrial hubs as a springboard to scale. This can provide manufacturers with greater access to centralised infrastructure, end customers, and co-located services needed for advanced manufacturing.
In this road map’s context, ‘industrial hubs’ are typically imagined as precincts where large-scale transformations of energy and materials occur. Potential examples include resource recovery precincts, hydrogen hubs, and manufacturing precincts in renewable energy zones. They would be focused on scaling up coordinated manufacturing solutions that cut across all of the priority themes for action.
Hubs represent important clusters of demand, which is key to mobilising investment and addressing late-stage commercialisation challenges. They could help enable efficient access to shared infrastructure, facilities and skills. For example:
- co-funding shared facilities where companies could test and validate new products or processes, without disrupting production lines which need to be run highly efficiently to stay internationally competitive
- attracting global suppliers of manufacturing inputs to Australia, like electronics contract manufacturing, to offer products and services to Australian manufacturers
- platforms for consortiums to come together and tackle ‘chicken-and-egg’ challenges of scaling demand and supply for emerging industries, or to collaborate across different parts of the value chain
- leveraging unique innovation opportunities afforded by co-location with industry, to turn industrial hubs into innovation hubs as well.
Globally, innovation hubs have been important in producing leading manufacturing innovations in recycling and clean energy. National Energy Resources Australia have highlighted the international role of clusters in bringing together expertise, technologies, specialised resources, capital and knowledge. This gives participants advantages not available to businesses operating alone.
The road map taskforce has also highlighted international exemplars.
- In recycling, ‘eco-industrial parks’ in South Korea allow waste outputs from industrial processes to become inputs into adjacent industrial processes, through clever co-location.
- In clean energy, Italy’s NOI Techpark has provided business model validation, market entry and other incubation services to support Alpitronic’s emergence as an advanced EV charging hardware provider.
Improving quality and depth of advanced trades will need bigger volumes for training providers and stronger, more consistent signals on common skill needs. Fresh approaches to advanced skill development could be embedded in manufacturer-led collaborations, including at hubs or precincts. These could include:
- collaborating with training providers to identify common areas where programs could
- support specialised but transferable skills
- co-funding a cooperative program to bring ‘best-of-the-best’ international experts to Australia to do training across a number of sites.
This diagram illustrates examples of how collaborating for scale can be supported by common user infrastructure and provide access to greater capabilities. These can support translation of innovation, integration with global supply chains, and other shared capabilities that emerging businesses can’t pull through alone.
Scale-enabled common user infrastructure
This diagram shows a set of manufacturing businesses benefiting from a common set of capabilities or infrastructure.
The infrastructure and capabilities listed are:
- advanced training
- trial production facilities
- electronics contract manufacturer
- product testing
Two-directional arrows show how physical materials and product flow, as well as ideas and collaboration move in both directions from the businesses to the common infrastructure.
Co-investment will be used to complement broader innovation support relevant to recycling and clean energy. This toolkit includes ARENA, the Clean Energy Finance Corporation, the Recycling Modernisation Fund, CRC-Ps, Export Finance Australia and other initiatives (including from state governments). Manufacturers should consider how different elements of their development pathway could be defined or sequenced to align with the timing, scale, nature and intent of different MMI streams as well as other channels for public innovation support.
The MMI is not intended to crowd out other forms of funding and finance. The most compelling suggestions for the MMI are likely to be for co-investments that complement, not duplicate, the intent of other clean energy and recycling initiatives by Commonwealth and state governments.
Benchmarks of success
Manufacturing in recycling and clean energy is an emerging area. The quantitative data sources to comprehensively track and describe manufacturers’ engagement with recycling and clean energy are still under development.
To measure our progress against the vision set out in the road map, the following will be monitored over 2, 5 and 10 year periods, dependent on data availability:
- number of new jobs
- increase in profitability
- growth in recycling & clean energy exports
- increase in the number of new products brought to market
- investment in the recycling and clean energy sector
- increase in adoption of recycling or clean energy in manufacturing processes
- increase in economic output per unit of material consumed (material productivity)
- reduced loss of materials from circulation in the economy
This road map aims to take Australia into new and different recycling and clean energy manufacturing activities. New and innovative approaches to capture pre- and post- production activities are under development and may be used to identify and capture this activity in future.
Other benchmarks for success will relate to the priority area’s touch points with adjacent government policies. These include:
- achieving actions and targets for recycling and waste reduction under the National Waste Action Plan
- achieving economic stretch goals for priority low emissions technologies under the Technology Investment Roadmap
- helping businesses and communities capture the benefits and opportunities of low emissions technologies and commodities under Australia’s Long Term Emissions Reduction Strategy.
64 National Energy Resources Australia (NERA) submission ↵