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The Australian Government’s technology-led approach will reduce emissions without imposing new costs on households, businesses or the economy.

The private sector will lead the deployment of low emissions technologies. The government’s role is to remove barriers to deployment and incentivise voluntary action and private investment in priority low emissions technologies by:

  • investing in research, development, demonstration and early-stage commercialisation
  • investing in enabling infrastructure
  • facilitating voluntary action and informing choice for consumers and businesses.

The government has committed to invest at least $20 billion in low emissions technologies by 2030, to drive over $80 billion of total public and private investment over the decade. This investment will support 160,000 jobs across Australia. This builds on the $21 billion of investment in low emissions technologies made by the government over the last two decades.

The Technology Investment Roadmap, bolstered by annual Low Emissions Technology Statements (LETS), provides a comprehensive investment strategy to guide government investment in low emissions technologies.

The government announced $1.9 billion in funding alongside LETS 2020.

Since the release of LETS 2020, the government has announced a further $1.7 billion in funding to support LETS 2021 initiatives and the roadmap.

Investing in the research-to-commercialisation pipeline

Supporting research, development, demonstration and early-stage commercialisation through co‑investment is the main focus of the Technology Investment Roadmap (Figure 5).

Figure 5: Australian Government investment across the technology development process

Graphic showing the stages of the technology development process where different Australian Government bodies invest. Text description provided immediately after image

The six stages of the technology development process are:

  1. Early stage R&D
  2. Applied R&D
  3. Market demonstration
  4. Deployment and commercialisation
  5. Market growth
  6. Diffusion

Australian government agencies invest in different stages of the technology development process:

  • CER: Stage 5 (market growth) to stage 6 (diffusion)
  • ARENA: Midway through stage 1 (early-stage R&D) to midway through stage 4 (deployment and commercialistion)
  • CEFC: Partway through stage 4 (deployment and commercialisation) to midway through stage 6 (diffusion)
  • Australian Research Council: Stage 1 (early-stage R&D) to midway through stage 3 (market demonstration)
  • Cooperative Research Centres: Stage 1 (early-stage R&D) to stage 4 (deployment and commercialisation)
  • CSIRO: Partway through stage 1 (early-stage R&D) to stage 4 (deployment and commercialisation)
  • Modern Manufacturing Initiative: Stage 3 (market demonstration) to stage 6 (diffusion)

Australian Renewable Energy Agency

The Australian Renewable Energy Agency (ARENA) supports innovation and commercialisation of renewable energy and low emission technologies. It bridges the gap between innovation and investment to help emerging and early-stage technologies become commercially viable. 

In 2020, ARENA's funding was extended, providing it with an additional $1.4 billion of baseline funding over the next 10 years, and a further $193 million to deploy targeted programs associated with transport, industrial energy efficiency, and regional microgrids. 

This year, the government expanded the role of ARENA, enabling it to support all of the priority technologies set out in LETS 2020. ARENA will play an important role in stimulating investment in the priority technologies and reducing their cost of deployment.

Since the roadmap was released in 2020, ARENA has provided funding to support several priority low emissions technologies, including hydrogen, energy storage and low emissions materials. This includes $103 million conditionally approved for three commercial-scale renewable hydrogen projects through ARENA’s Renewable Hydrogen Deployment Funding Round. These are some of the largest clean hydrogen projects in the world.

Clean Energy Finance Corporation

The Clean Energy Finance Corporation (CEFC) plays a unique role in the Australian economy, working with the private sector to demonstrate the financial viability of near-commercial low emissions technologies and the bankability of new revenue streams. 

The CEFC takes a commercial approach, providing tailored debt finance and equity to businesses and projects that:

  • deploy proven low emission technologies
  • develop and commercialise early-stage and late-stage clean energy technologies.

Since the roadmap was released, the CEFC has:

  • incorporated the roadmap into its four-year corporate plan
  • continued to invest in energy storage
  • made its first investments in hydrogen, soil carbon sequestration and electrical transmission infrastructure
  • supported early-stage technology development by investing in start-up companies.

The government and CEFC will continue to investigate how the CEFC can further support priority low emissions technologies.

Clean Energy Regulator

The Clean Energy Regulator (CER) administers Australian Government schemes for measuring, managing, reducing and offsetting Australia’s greenhouse gas emissions. These include the Emissions Reduction Fund (ERF) and Safeguard Mechanism, the Renewable Energy Target, the National Greenhouse and Energy Reporting Scheme and the Australian National Registry of Emissions Units.

Since LETS 2020, the CER has developed a new ERF method to support carbon capture and storage (CCS). The CER is also developing certification frameworks and platforms to give confidence to investors and consumers as new technologies and industries evolve. These include the Guarantee of Origin Scheme for Hydrogen, in collaboration with the Department of Industry, Science, Energy and Resources, and the Australian Carbon Exchange.

Australian Research Council

The Australian Research Council (ARC) expands knowledge and innovation for the benefit of the Australian community by funding the highest quality research, assessing the quality, engagement and impact of research, and providing advice on research matters.

The ARC administers an average of $800 million in grants every year. Grants are awarded to individuals, research teams and large-scale centres through the ARC’s Discovery Program and Linkage Program.

Discovery Program

The ARC’s Discovery Program supports individuals and small teams. It recognises the importance of fundamental research to national innovation.

Strong fundamental research capabilities are essential for Australia to play a leading role in developing new and emerging low emissions technologies.

Linkage Program

The ARC’s Linkage Program supports national and international partnerships between researchers and business, industry, community organisations and other publicly funded research agencies. These partnerships help transfer skills, knowledge and ideas to secure commercial and other benefits.

Linkage Program funding already supports low emissions technologies through the Industrial Transformation Program. This program funds research hubs and training centres including research on low emissions technologies such as steel innovation and energy storage.

The Linkage Program provided $35 million for the ARC Centre of Excellence for Enabling Eco-Efficient Beneficiation of Minerals. The centre will work with academic, industry and government partners to develop transformational technologies for minerals beneficiation. These technologies are essential for meeting global demand for metals.

Commonwealth Scientific and Industrial Research Organisation

The Commonwealth Scientific and Industrial Research Organisation (CSIRO) works with universities, research institutes and industry to develop technologies and support commercial uptake across many areas of the economy, including low emission technologies. CSIRO’s relevant research areas include clean hydrogen production, energy storage, industrial decarbonisation and agricultural emission reduction.  

CSIRO has also established a mission-driven multidisciplinary science and research program to drive major demonstration and investment activities in areas of high importance to Australia. CSIRO’s missions include:

  • the Hydrogen Industry Mission, which aims to demonstrate commercial uptake pathways for clean hydrogen production and end-use markets
  • the Towards Net Zero Mission, which will focus on technology uptake pathways to achieve low emission outcomes for Australian industry, agriculture and regional communities
  • the planned Critical Energy Metals Mission, which will aim to increase economic value from the energy transition by transforming our mineral resources into higher-value products and creating new manufacturing jobs and export-ready technologies.

Cooperative Research Centres

The government supports industry-led collaborative research through grants under the Cooperative Research Centres (CRC) Program. 

CRCs have established projects in areas of competitive strength that align with government priorities, including developing and deploying priority low emissions technologies:

  • The Heavy Industry Low-carbon Transition (HILT) CRC will receive $39 million in Australian Government grant funding over 10 years to develop Australia’s heavy industries and de-risk the technology pathways for a profitable transition to internationally-competitive production of low-carbon products. Partners will contribute a further $176 million to the CRC.
  • The Future Fuels CRC will receive $26 million in Australian Government grant funding over seven years to help adapt gas pipelines and storage systems to operate in a low-carbon economy using fuels such as hydrogen and biogas. Partners will contribute a further $64 million to the CRC.
  • The Reliable Affordable Clean Energy (RACE) for 2030 CRC will receive $69 million in Australian Government grant funding over 10 years to reduce costs to business, enhance reliability, cut carbon emissions, improve energy affordability and develop Australian energy technology businesses. Partners will contribute a further $279 million to the CRC.

The government will continue engaging with CRCs on industry-led research into low emissions technologies and enabling infrastructure.
 

Modern Manufacturing Initiative

The $1.3 billion Modern Manufacturing Initiative (MMI) supports projects from market demonstration through to commercial scale-up. This includes translating high-quality research into marketable products, integrating intermediate products into new domestic and global value chains, entering new markets and creating transformational business-to-business and business-to-research collaborations.

The Recycling and Clean Energy National Manufacturing Priority roadmap is helping to guide industry engagement and co-investment under the MMI. It highlights manufacturing opportunities for Australia in hydrogen technologies, batteries, next-generation photovoltaic modules, and low emissions metals, among other products. 

Supporting Australian manufacturers to pursue competitive, high-value manufacturing opportunities in these areas builds on and extends the government’s broader support for low emissions technologies.
 

Investing in enabling infrastructure

The government is supporting shared infrastructure to facilitate the voluntary and commercially-driven uptake of low emissions technologies. This includes support for several transmission projects identified by the Australian Electricity Market Operator (AEMO) Integrated System Plan to fulfil National Electricity Market cost, security and reliability expectations. Up to $250 million has been committed for early works to progress three important new transmission lines:

  • Marinus Link between Tasmania and Victoria
  • Project Energy Connect between South Australia and New South Wales
  • Victoria to New South Wales Interconnector West.[3]

Enabling infrastructure

LETS 2021 introduces the category of ‘enabling infrastructure’ – infrastructure that is:

  • fundamental to a low emissions economy
  • needed for Australia to deploy priority, emerging and proven low emissions technologies at a large scale.

Enabling infrastructure must be available at the right time to support commercial investment, help deliver low-cost energy and give consumers more choice in low emissions technologies.

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.

Electric vehicle charging and refuelling infrastructure

Battery electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs) will become price competitive over the next five to ten years as the world’s largest vehicle manufacturers increasingly commit to their development.

Investment is required to prepare for a rapid increase in the number of consumers choosing BEVs and FCEVs, and to ensure enough charging and refuelling stations are made available to meet demand.

The government is supporting the rollout of battery charging and hydrogen refuelling stations through the $71.9 million Future Fuels Fund. The government’s first round of the Future Fuels Fund, administered by ARENA, has provided $24.5 million of funding to five applicants across 19 projects. These 19 projects will deliver 403 new fast charging stations, each capable of charging at least two vehicles concurrently at 50 kW or greater.[4],[5]

Integration of battery charging and hydrogen refuelling stations into Australia’s energy networks needs to be well planned and managed to ensure the network operates efficiently. Good planning and management, facilitated by electricity market and network reforms, will help realise opportunities such as shifting demand to take advantage of periods of excess, low-cost supply. This will also lower costs for consumers by sharing the cost of the electricity network, while delivering broader benefits including emissions reduction, fuel security and improved air quality.

In addition, the government will investigate support for smart charging technology to bring forward the best outcomes for BEV motorists and the electricity grid. Well-integrated BEV charging will improve system security and reliability, reduce costs for BEV owners and deliver value to all other energy consumers through better utilisation of the electricity transmission and distribution systems.

Digital grid

Australia needs to support an electricity system increasingly powered by variable renewable generation in order to deliver low-cost, clean and reliable electricity. Australia is already world leading in this regard, with the highest solar capacity per person in the world and the highest combined wind and solar capacity of any country outside Europe.[6]

An enhanced operating system is required for AEMO, together with market participants such as generators, networks and policy makers, to continue to manage the electricity grid in a way that is effective, efficient, secure and reliable. 

The government is supporting an initial investment of $13 million, through more than $2 million from ARENA, to help AEMO develop this operating system. The government will continue to build on existing work by AEMO to support the ongoing expansion of an enhanced operating system, to ensure a full suite of digital capabilities needed to manage high penetration of variable renewables over time.

Investment in a digital grid that complements the electricity market’s Integrated System Plan and post-2025 reforms will allow Australia to fully benefit from the emissions reductions offered by the renewables revolution.

Building on the National Hydrogen Infrastructure Assessment

We are developing a National Hydrogen Infrastructure Assessment to guide government and private sector investment in clean hydrogen as the industry grows.

We will follow this with a complementary assessment of infrastructure needs for other priority technologies. This includes identifying opportunities to reduce costs by locating hydrogen, energy storage, and CCS infrastructure near steel and aluminium manufacturers.

Building on the hydrogen infrastructure assessment will help develop an efficient long-term framework for clean hydrogen industrial hubs.

Clean Hydrogen Industrial Hubs Program

Through the Clean Hydrogen Industrial Hubs program, the government is investing $464 million to accelerate the development of an Australian clean hydrogen industry.

Clean hydrogen industrial hubs seek to concentrate demand for hydrogen in one geographic region, thereby helping to reduce costs and share information. Clean hydrogen industrial hubs will co-locate users, producers and potential exporters, allowing them to both leverage industrial, energy and transport resources and stimulate investment, innovation and workforce skills development in our regions.

The new clean hydrogen industrial hubs program will build Australia’s potential to supply domestic users and international trading partners with low-cost clean energy, and will help to capitalise on global interest in investing in Australian hydrogen opportunities. Cooperation on hydrogen forms part of new low emissions technology partnerships with Germany, Japan, the Republic of Korea, Singapore and the United Kingdom announced this year. Australia’s Hydrogen Accord with Germany includes a commitment to facilitating industry-to-industry cooperation on demonstration projects in Australian hydrogen hubs.

Clean hydrogen industrial hubs will provide opportunities for sector coupling through co-location of new energy resources, low emissions technologies, manufacturing, and potential export industries. These hubs will benefit from the regions’ established infrastructure, transport mechanisms and workforces.

The government has identified the following locations as highly prospective hydrogen hub locations:

  • Bell Bay (TAS)
  • Darwin (NT)
  • Eyre Peninsula (Whyalla, SA)
  • Gladstone (QLD)
  • Hunter Valley (NSW)
  • La Trobe Valley (VIC)
  • Pilbara (WA).

Community engagement

To realise the economic and employment benefits from emerging low emissions industries, communities must be given the opportunity to participate in and shape the development. Early and ongoing engagement, including with Traditional Owners, will be key to understanding community values, concerns and aspirations as low emissions technology sectors grow.

Factors including the perceived costs, risks and benefits, fairness, and awareness of adverse consequences all impact the overall acceptance and support for new technologies.[7] Building partnerships with communities over time through collaboration is essential, including through:

  • clearly communicating costs, risks and benefits
  • managing expectations and communicating realistic timeframes
  • ensuring benefits are fairly distributed
  • ensuring nationally consistent messaging about low emissions technologies.[8]

Communities may have different attitudes to a technology depending on their interactions with it. Earning citizens’ acceptance for a low emissions technology placed near their homes requires a different engagement process to a remotely placed low emissions technology.[9]

The government will continue to work with industry and communities to understand how different groups may be impacted by the development of low emissions technologies and to promote best-practice engagement.

Australian Energy Infrastructure Commissioner

The Australian Energy Infrastructure Commissioner, an independent role appointed by the government, receives and refers complaints from concerned community residents about wind farms, large-scale solar, energy storage facilities and new major transmission projects. The Commissioner also promotes best practices for industry and government to adopt when planning and operating these projects.

Facilitating voluntary action and informing consumer choice

The government will promote voluntary action and provide clear information to help consumers and businesses choose low emissions technologies, including through the existing Emissions Reduction Fund, certifications and standards, and the proposed Voluntary Zero Emissions Gas Market.

Emissions Reduction Fund 

The Emissions Reduction Fund (ERF) encourages voluntary action to reduce emissions, providing financial incentives for farmers, businesses and communities to undertake voluntary projects that store carbon or avoid emissions and provide economic benefits. It is one of the world’s largest offset programs, having delivered more than 100 million tonnes of abatement, and underpinned by a rigorous framework to ensure the integrity of the abatement generated. Under the fund, the CER issues Australian Carbon Credit Units (ACCUs) to projects that store carbon or reduce emissions using approved methods. An ACCU is equivalent to one tonne of CO₂-e stored or avoided. Once earned, an ACCU can be sold, kept or retired.

Government purchases of ACCUs, combined with growing demand from business and consumers seeking to reduce emissions, can create strong voluntary markets. These markets can stimulate early demand for low emissions products and technologies.

The ERF now has over 1,000 projects delivering carbon abatement benefits across Australia and has contracted a total of 209 million tonnes of CO₂-e abatement. Contracts under the ERF will deliver over $2 billion to rural and regional communities, with over $640 million already delivered.

The CER administers the ERF and develops ERF methods. ERF methods are independently assessed before being made by the Minister to provide transparency and certainty to purchasers and consumers.

New methods for other low emissions technologies could fast-track the ability of project proponents to generate tradable carbon credits. Through the 2020–21 Budget, the government provided $40 million of new funding to accelerate the development of new ERF methods to five per year.

Supporting low emissions technologies through the ERF

A new CCS method, released in September 2021, will enable ACCUs to be earned for every tonne of emissions avoided through CCS ERF projects. It will help drive voluntary emissions reductions across hard-to-abate sectors including cement, natural gas processing and steel production. The new CCS method will also support clean hydrogen production and the creation of CCS hubs. 

A new method for soil carbon sequestration is under development to make it easier for farmers to develop and get support for projects under the ERF. For the first time, it will allow modelled estimates of soil carbon change to be used, in combination with measurement approaches, which is expected to materially reduce costs and increase returns. The method was released for public consultation in September 2021 and is expected to be finalised by the end of 2021. Soil carbon projects are attracting strong interest, making up a quarter of all new project registrations in 2021. 

The government will develop a further five new ERF methods in 2022. These include methods aligned with priority technologies and enabling infrastructure in LETS 2021 including: electric vehicle charging and refuelling infrastructure, clean hydrogen, and carbon capture, use and storage.

Climate Active

Climate Active is an ongoing partnership between the Australian Government and Australian businesses to drive voluntary climate action.

Certification is awarded to businesses that credibly reach net zero emissions against a best practice carbon accounting standard by measuring, reducing and offsetting emissions.

Climate Active is developing new options to recognise voluntary climate action, including:

  • where all offsets used in a carbon neutral certification are ACCUs 
  • where all the electricity used is matched with renewables.

Climate Active is also considering other forms of recognition, including for substantial and verified emissions reduction achievements.

Certification and standards

Transparent certification and standards can increase confidence in low emissions energy, products and materials. The government will continue to work with industry partners and other countries to ensure Australian certification and standards are consistent and recognised around the world. Our current work on hydrogen certification will pave the way for other technologies like low emissions materials and CCS.

Hydrogen Guarantee of Origin scheme

The government is developing a Guarantee of Origin scheme for hydrogen – a vital step to provide markets with the transparent information needed for future global trade in this new clean energy.

The scheme will provide hydrogen consumers, whether they are national governments, companies or individuals, with data on how and where the hydrogen they purchase is produced. Most important, it will document the quantity of carbon dioxide emissions associated with the production of each tonne of hydrogen. It will also include the technology and energy source used to produce the hydrogen.

In June 2021, the government released a discussion paper, A Hydrogen Guarantee of Origin Scheme for Australia, outlining a proposed design for a domestic scheme.

Australia is taking a lead role in the Production Analysis Taskforce of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE). This involves developing an internationally agreed methodology to determine the well-to-gate emissions from different hydrogen production pathways. The IPHE is focused on developing a common basis for calculating the emissions intensity of hydrogen to facilitate comparison across countries, rather than developing arbitrary definitions of zero or low emissions hydrogen. Australia’s proposed Guarantee of Origin scheme aligns with the developing IPHE methodology.

The government has announced $9.7 million to help trial the Guarantee of Origin scheme in Australia. We expect the Clean Energy Regulator to conduct these trials.

Voluntary zero emissions gas market

The government will work with industry, consumers and state and territory governments over the next 12 months to develop a voluntary zero emissions gas market in Australia.

This market will drive early demand for clean hydrogen and other zero emissions gases and recognise consumers’ voluntary purchase of zero emission gas.

Fostering this market will also provide the revenue clean hydrogen producers need to scale up quickly to bring down production costs closer to the $2 per kg stretch goal.

Certification and standards (such as the Hydrogen Guarantee of Origin scheme) will provide the transparency and traceability needed for a zero emissions gas market.

The National Hydrogen Strategy includes actions to amend the National Gas Law (and relevant jurisdictional laws and regulations) so that hydrogen and zero emissions gas blends can be injected into Australian gas networks.

Biomethane ERF method

Biomethane is a low emissions natural gas substitute produced by capturing and refining organic waste methane emissions. Biomethane can be injected into the natural gas distribution grid, or used as a direct substitute for natural gas in other industrial and domestic applications. As biomethane is created from bio-based waste streams, it results in significantly lower emissions than natural gas.

In late 2020, the government prioritised the development of an ERF method to enable projects to earn ACCUs for generating and using biomethane. The method is expected to be finalised in coming months.

Footnotes

  1. This is in addition to a $56 million grant to support Marinus Link in 2019. It also follows a joint commitment between the Australian and New South Wales governments in 2020 to underwrite up to $66 million and $102 million in early works for the HumeLink and Queensland-New South Wales interconnector (QNI) upgrade transmission projects.
  2. A BEV with a 75 kilowatt-hour (kWh) battery takes approximately 30 hours to charge from empty to full on a 2.4 kW domestic slow charger, 1.5 hours on a 50 kW fast charger, and just 15 minutes on a 350 kW fast charger. In practice it takes longer, because the power is progressively cut back during charging to prevent the battery from overheating.
  3. To ensure maximum convenience for Australian drivers, care will be taken to ensure that funded fast charging stations are fitted with the Type 2 AC plug that is now standard on all new Australian BEVs and that all BEV models are supported.
  4. International Renewable Energy Agency 2021, Renewable Capacity Statistics 2021, accessed 5 August 2021
  5. Australian Council of Learned Academies 2021, Australian Energy Transition Research Plan, accessed 4 August 2021
  6. Ashworth P, Witt K, Ferguson M, Sehic S 2019, Developing community trust in hydrogen (1.2 MB PDF) (Website: Australia's National Hydrogen Strategy)
  7. Australian Council of Learned Academies 2021, Australian Energy Transition Research Plan, accessed 4 August 2021