This is the second Low Emissions Technology Statement (LETS 2021) released by the Australian Government. Annual statements are released under the Technology Investment Roadmap. The roadmap is the cornerstone of Australia’s Long-Term Emissions Reduction Plan to meet net zero emissions by 2050. It is an enduring process to accelerate the development and commercialisation of new and emerging low emissions technologies to reach cost parity with existing high emissions technologies.
The Australian Government’s technology-led approach will reduce emissions without imposing new costs on households, businesses or the economy.
Our vision: A prosperous Australia, recognised as a global low emissions technology leader
Australia’s big technology challenges
- Delivery of low-cost, clean and reliable energy to households and industry for transportation, heating, lighting and production
- Expanding production and increasing productivity, creating jobs and substantially reducing emissions from Australia’s primary industries
- Preserving and expanding onshore manufacturing of energy-intensive products and capturing new export markets for low emissions commodities
- Scaling geological and biological sequestration to provide globally significant sequestration of CO₂
Australia’s principles for emissions reduction
- Technology not taxes
- Expand choices, not mandates
- Drive down the cost of a range of new technologies
- Keep energy prices down with affordable and reliable power
- Be accountable for progress
How government will make a difference
- Invest in low emissions technology research, development, demonstration and early-stage commercialisation
- Facilitate voluntary action by businesses and consumers to reduce emissions
- Invest in enabling infrastructure and technology
- Ensure transparency and accountability to inform consumers
- Work with international partners
Priority low emissions technologies
The first Low Emissions Technology Statement, released in 2020 (LETS 2020), identified five priority technologies and set economic stretch goals for each one:
- clean hydrogen – production under $2 per kilogram
- energy storage – electricity from storage for firming under $100 per megawatt hour (MWh)
- low emissions materials (steel and aluminium) – low emissions steel production under $700 per tonne and low emissions aluminium production under $2,200 per tonne
- carbon capture and storage (CCS) – carbon dioxide (CO₂) compression, hub transport and storage under $20 per tonne of CO₂
- soil carbon – soil carbon measurement under $3 per hectare per year.
Economic stretch goals are ambitious but realistic goals to bring priority low emissions technologies to cost parity with existing high emissions technologies.
LETS 2021 introduces ultra low-cost solar electricity generation as another priority technology. Cheap, clean electricity is integral to unlocking the economic, employment and abatement potential of other priority low emissions technologies and supporting electrification of other sectors such as transport, buildings and industry. We have set an economic stretch goal for solar electricity generation at $15 per MWh, or approximately a third of today’s costs.
Achieving our economic stretch goals
Stretch goal: Clean hydrogen production under $2 per kilogram.
When stretch goal may be achieved:
- Steam methane reforming with carbon capture and storage: 2025 to 2030. Clean hydrogen produced from natural gas with emissions captured and stored permanently underground is technically and economically feasible, but subject to offtake agreements, development approvals and the adoption of a hydrogen Guarantee of Origin scheme
- Renewable electrolysis: earliest date for achieving stretch goal is 2028. Higher confidence of achieving stretch goal by 2035.
Ultra low-cost solar
Stretch goal: Solar electricity generation at $15 per MWh.
The earliest date for achieving this stretch goal for large scale solar is 2030. Higher confidence of achieving stretch goal by 2035.
Price assumptions for the other priority technologies don't yet include the reduction in electricity prices expected from ultra low-cost solar, or the associated upside benefits for meeting the stretch goals.
Stretch goal: Electricity from storage for firming under $100 per MWh.
This stretch goal may be achieved using lithium-ion batteries. Earliest date for achieving stretch goal is 2025. Higher confidence of achieving stretch goal by 2030.
Low emissions steel
Stretch goal: Low emissions steel production under $700 per tonne (based on the marginal cost).
This stretch goal may be achieved using hydrogen and direct reduction of iron. Earliest date for achieving stretch goal is 2030. Higher confidence of achieving stretch goal by 2040. It will be economically viable in the late 2020s, but subject to capital development cycles.
Low emissions aluminium
Stretch goal: Low emissions aluminium under $2,200 per tonne (based on the marginal cost).
This stretch goal may be achieved using renewable electricity and inert anodes. Earliest date for achieving stretch goal is 2035. Higher confidence of achieving stretch goal by 2040.
Carbon capture and storage
Stretch goal: CO₂ compression, hub transport and storage for under $20 per tonne of CO₂
Earliest date of expected deployment to achieve this stretch goal is 2025. Higher confidence of achieving stretch goal by 2030. This is subject to offtake agreements and development approvals.
Stretch goal: Soil organic carbon measurement under $3 per hectare per year.
The earliest date for achieving this stretch goal is 2025 and there is a higher confidence of achieving stretch goal by 2030 through advancement in proximal sensing, modelling and remote sensing technologies.
LETS 2021 also highlights how the government will support the deployment of low emissions technologies:
- investing in research, development, demonstration and early-stage commercialisation
- investing in enabling infrastructure
- enabling voluntary action and informing choice for consumers and businesses.
LETS 2021 prioritises the following actions.
Solar 30 30 30
This initiative aims for solar photovoltaic (solar) to achieve 30% efficiency at 30 cents per installed watt by 2030. Led by ARENA, the initiative will help drive down costs to meet the stretch goal for the newly prioritised technology: ultra low-cost solar. Ultra low-cost clean electricity is also key to meeting the stretch goals for other priority technologies, including clean hydrogen, low emissions steel and aluminium, and electrical energy for storage for firming.
Assessing infrastructure needs
The Australian Government is already conducting a National Hydrogen Infrastructure Assessment. Building on this, a complementary assessment of infrastructure needs for other priority technologies will be conducted. This will include exploring ways to reduce costs by locating hydrogen, energy storage, and CCS infrastructure near manufacturers such as steel and aluminium companies.
Growing Australia’s hydrogen industry
The government is investing $464 million in seven clean hydrogen industrial hubs to concentrate demand for hydrogen in one geographic region to reduce costs and share information. These hubs will bring hydrogen producers, users and exporters together. They will lower the cost of production, encourage innovation and enhance skills and training efforts.
Developing a voluntary zero emissions gas market
The government will develop a voluntary zero emissions gas market in Australia to increase early demand for clean hydrogen and other zero emissions gases and recognise consumers’ voluntary purchase of zero emissions gas. This market will drive early demand for clean hydrogen and other zero emissions gases.
LETS 2021 introduces the category of enabling infrastructure – infrastructure that will help deploy priority, emerging and proven low emissions technologies at a commercial scale, and support consumer choice.
The government’s first enabling infrastructure priorities are:
- battery charging and hydrogen refuelling stations to support consumer choice in electric vehicles
- a digital grid with enhanced management systems and capabilities to support rapid growth in solar and wind generation.
LETS 2021 updates the government’s list of emerging technologies.
Emerging technologies are low emissions technologies that have transformative potential, but require continued monitoring of global learning rates, research and investment trends.
LETS 2021 explores, in detail, two emerging low emissions technologies that show promise for prioritisation in future statements and will be supported by early investments:
- livestock feed supplements to reduce agricultural methane emissions
- low emissions cement.
Accelerating deployment of priority low emissions technologies
The government’s ambition is to reduce the costs of priority low emissions technologies to meet the economic stretch goals as soon as possible.
For the priority technologies, LETS 2021:
- identifies technology deployment pathways
- identifies opportunities to reduce the cost of each technology
- estimates when each priority technology will meet the economic stretch goal.
Australia’s resource opportunity in a new energy economy
LETS 2021 explores future global demand for the resources needed to deploy low emissions technologies at scale, many of which are found here in Australia.
Batteries and other storage technologies will drive most of the demand, but Australia can also supply the resources for solar panels, wind turbines, inverters and electric motors. We look at the potential to grow Australian industries around these resources and downstream processing.
Impact evaluation framework
LETS 2021 introduces an impact evaluation framework for the Technology Investment Roadmap. The framework includes the metrics we will use to track progress through annual Low Emissions Technology Statements.
- LETS 2020 identified this priority technology as ‘low carbon materials (steel and aluminium)’. This change has been made to clarify that the priority technology focus is on low emissions production for steel and aluminium products rather than products that contain low elemental carbon content. To be consistent with other priority technologies, the low emissions materials stretch goals have been refined to reflect cost targets rather than price targets. ↵