Appendix B: Summary of the Industry Sector Plan subsectors

Aluminium and alumina

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
1,699 0.2% 14,811 26,900

* FY2024

  • Australia is globally competitive in alumina and aluminium production, and Australia is unique in having the entire aluminium supply chain, from bauxite mining to finished products.
  • Aluminium has a wide range of uses across the economy, including in the automotive and construction industries.

Emissions profile

Scope 1 emissions (% whole‑of‑economy)* Safeguard facilities Safeguard facility emissions (% whole‑of‑economy)* Safeguard proportion of scope 1 subsector emissions
3.5% 10 3.4% 96%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions are primarily from Australia’s 5 alumina refineries and 4 aluminium smelters. Remaining businesses are aluminium fabrication operations with minimal direct emissions. 

Alumina

Alumina production generates emissions primarily from 2 processes: firstly digestion, using the Bayer process, which is energy and heat intensive (138–255°C) and secondly calcination, which uses high temperatures around 1,000°C to produce the final alumina product. Conventional technologies use coal and gas to produce the energy and heat required (Deloitte; ARENA, 2022).

Low emissions alumina production technologies are being developed. With 3 Australian demonstration projects at various stages of development (links below). 

The choice of technology suitable can be facility and ore specific, with multiple pathways to net zero for Australia’s alumina industry. 

Aluminium

Aluminium’s scope 1 emissions are predominantly from the production and use of carbon anodes in the aluminium electrolysis process, resulting in small amounts of perfluorocarbon (PFC) emissions, which is a very potent type of greenhouse gas. Most scope 1 emissions will be abated through substituting carbon anodes with inert anodes, likely available in Australia some time after 2035. Provision of firmed renewable electricity is required prior to adopting inert anodes, as they likely have a higher demand for electricity than conventional carbon anodes and would otherwise result in higher emissions (NRDC, 2023). 

Recycling aluminium does not produce PFCs and uses significantly less electricity, also reducing scope 2 emissions. The small scale of Australia’s scrap recycling industry results in 95% of Australia’s scrap aluminium being exported for recycling (Australian Aluminium Council, 2024). Domestic recycling is limited by the scale of downstream manufacturing of primary aluminium in Australia beyond the extrusion industry 

Aluminium facilities are by far the largest consumers of electricity within the industrial sector and economy more broadly. Addressing alumina and aluminium’s scope 2 emissions by switching to firmed renewable electricity would make a significant contribution to achieving Australia’s net zero ambitions. Traditionally, aluminium production has been sited close to electricity generation and port access. 

The alumina and aluminium industry require a coordinated buildout of low‑cost and firmed renewables and (potentially) access to affordable renewable hydrogen at scale to fully decarbonise. In Canada and Europe, the sector has located facilities close to historically located hydroelectricity to provide firmed low‑cost power at scale, which has enabled zero emissions aluminium production. 

Cement and concrete production

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
1,638 0.2 2,051 15,300

* FY2024

  • Other products produced in the sector include bricks, pavers, and precast concrete components. Large scale railway, road and wind farm developments consume large quantities of cement, lime, and concrete products.
  • At present the industry is highly trade exposed, and domestic demand is met through a mixture of onshore manufacture of clinker and imports from overseas suppliers.

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
1.8% 7 1.2% 66%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions are primarily from integrated cement, clinker and lime facilities, with some emissions from brick manufacturing.

Most emissions associated with cement and concrete production are due to clinker and lime production from limestone, which is a high temperature (approximately 1,450°C) process that currently requires gas, coal, or other high carbon intensity fuels. The industry is also a large user of refuse‑derived fuels, including biomass, which diverts emissions from landfill. In addition, the process is inherently carbon emitting regardless of heat source due to the chemical reaction (calcination) involving limestone (Cement Industry Federation, 2023).

Most opportunities to address scope 1 emissions in this sector rely on using less carbon intensive fuels for calcination and substituting some clinker with supplementary cementitious materials in cement and concrete production. Addressing the inherent process emissions from calcination of limestone remains a global challenge for the industry. 

Several cement and concrete suppliers (including those manufacturing clinker in Australia) have started to offer lower‑carbon products to the market, but some of these products require changes to the application of standards and specifications to enter more widespread use. As noted in the Built Environment Sector Plan, reducing cement and concrete use where possible, or specifying the use of lower‑carbon cement and concrete, can greatly reduce the embodied carbon of new construction over time. 

Fully net zero alternatives that can displace standard cement are yet to be discovered; however, there are lower emissions alternatives available such as circular economy opportunities to improve materials efficiencies, using supplementary cementitious materials (SCMs) and geopolymers as substitutes for clinker in concrete, and using renewable hydrogen for process heat in cement kilns. Bio‑based SCMs may also play a role, as biological compounds can grant unique properties to cement from a sustainable source. Only certain cement types can be used in concrete under the relevant Australian standard for concrete to ensure it meets strength and other design criteria (Verein Deutscher Zementwerke, 2021). This is a key issue inhibiting the uptake of lower emission technologies in Australian cement production and use.

Chemicals and plastics manufacturing

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
6,369 0.8 11,751 77,900

* FY2024

  • Chemicals and plastics are critical enablers of almost every value chain across the economy, including mining, agriculture, construction, infrastructure, manufacturing, food, textiles, and healthcare. The chemicals and plastics industry includes base material manufacture, compounders, manufacturers, and recyclers. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy)* Safeguard facilities Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
2.0% 11 1% 51%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions primarily come from ammonia production, process heat generation and nitric acid production with smaller portions from onsite electricity generation and the production of titanium dioxide. 

Chemicals and plastics processes rely on fossil fuels as both an energy source and feedstock. About half the scope 1 emissions from chemical manufacturing are from the use of natural gas. Two‑thirds of this are from using natural gas as an input into the production of other chemicals such as ammonia and nitric acid for use in explosives and fertilisers. 

Opportunities for decarbonisation include integrating renewables and affordable renewable hydrogen and carbon feedstock at scale, efficiencies, and industrial symbiosis through industrial precincts. 

Currently, hydrogen is produced and used within the chemicals and plastics manufacturing sector, for example as a precursor to ammonia (for explosives and fertilisers), and in plastics materials and solvents. Chemicals manufacturers making hydrogen and ammonia for industrial purposes are well placed to produce them to use as energy carriers in the energy sector, for transportation fuels, and for export. 

Virgin plastic production is an inherently carbon intensive process given the use of fossil fuels as feedstock and the energy used to create plastics. Australia is well placed to increase plastics circularity through product design improvements, greater use of recycled and bio‑feedstocks, and improved and advanced recycling technologies. This will help the sector to reduce the reliance on virgin fossil fuel plastic resins in the future. 

Opportunities to produce lower emission products include: 

  • Coated fertilisers from ammonia that result in lower emissions when used in agriculture
  • Insulation and other energy efficiency solutions for homes and the built environment
  • Lightweight, energy‑saving materials for vehicles and transport such as plastic panelling, foams and carbon fibre materials (ICCA, 2020). 

Food and beverage manufacturing

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
15,414 1.3 38,345 235,100

* FY2024

  • Australia is a net exporter of food products and has a global reputation for safe, clean food. The food and beverages manufacturing sector is diverse, itself encompassing multiple industries, and has many SMEs.
  • Meat processing, grain milling, and cereal product manufacturing are the 3 highest emitting industries within this subsector and account for 64% of its total emissions. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
0.8% 1 0.1% 11%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions are spread across a wide variety of businesses. Emissions are largely from using fossil fuel for low to medium temperature processes, and from synthetic greenhouse gas refrigerants. 

Due to the perishability of many food and beverage products, and food safety requirements, the sector is reliant on maintaining robust cold‑chain and refrigeration systems for processing, storage, and transport of foodstuffs. This highlights the importance of energy and transport reliability and the security that grid power provides. 

Sustainability is already a significant focus for food and beverage businesses and consumers, with a decarbonised food supply chain expected to be a competitive necessity in the future for both export and domestic suppliers. Major supermarket retailers already require food and beverage suppliers to demonstrate decarbonisation commitments in line with retailers’ own aspirational net zero targets. 

Opportunities to decarbonise include optimising energy consumption, process heat generation and recapture, reuse of materials (including waste‑to‑energy), upgrading to more energy efficient equipment and processes, and electrification. Alternative technologies are currently available to address many of these processes. Synthetic greenhouse gas refrigerants used for process heating and cooling can be replaced with lower global warming potential alternatives to reduce scope 1 emissions. Biogas energy is an increasingly important energy source and an alternative to grid gas in regions with reliable waste streams. Sustained high‑energy input costs will drive uptake of alternative energy technologies and electrification. 

The decarbonisation challenges for the food and beverages subsector are primarily economic, including barriers to investment, market demand, and tight margins. The subsector is also slow to share data on successful transition projects to quantify results and awareness of technology solutions, to build broader industry confidence. 

Achieving decarbonisation requires greater awareness across the sector and demonstration of available low‑emissions technologies. Almost 90% of businesses within the food and beverages subsector are SMEs that are not captured within existing emissions reporting measures such as the National Greenhouse and Energy Reporting scheme (NGERs). 

Food waste accounts for 3% of Australia’s emissions and costs our economy $36.6 billion each year. The amount of land we use to grow wasted food covers over 25 million hectares – a landmass bigger than the state of Victoria. Working across the supply chain to minimise food wastage will also significantly reduce emissions. (DCCEEW, 2024b).

Iron and steel manufacturing

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
16,745 0.7 4,899 98,200

* FY2024

  • Iron and steel manufacturing provides key inputs for the construction, defence, transport, infrastructure, and renewables industries, and is important for sovereign capability. It is a trade exposed industry and faces competition from Asian steelmakers. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
2.1% 6 1.7% 82%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions are primarily from integrated iron and steel works using iron ore and coking coal (~70% of emissions) to make primary steel, and electric furnaces using electricity from the grid and scrap steel. 

Primary (or virgin) iron and steel are currently made in Australia through an integrated process, from Australian iron ore (hematite and magnetite ores) and various sources of metallurgical (coking) coal. The first stage of the process uses a BF for ironmaking, reaching over (>1,200°C), and the second stage converts the hot liquid iron into steel through a basic oxygen furnace (BOF) (>1,500°C). Australian operators also use smaller scale EAFs, primarily for scrap recycling. Decarbonising primary iron and steelmaking requires alternative heat processes and material inputs, such as renewable hydrogen, to provide heat and the chemistry required to make iron and steel (Australian Industry Energy Transitions Initiative, 2023). 

There are 2 main types of Australian iron ore used for steelmaking: hematite and magnetite. 

  • Hematite iron ore, also known as Pilbara iron ore, is well suited to conventional BF‑BOF steelmaking which can easily remove impurities and is overwhelmingly Australia’s main iron ore export. Hematite ore is currently used at BlueScope’s Port Kembla Steelworks. Improvement in the processes for using hematite in decarbonisation technologies requires further research.
  • Magnetite iron ore is better suited to decarbonisation technologies. This is due to its magnetitic qualities, which enable it to be more easily concentrated, lifting its iron content to the level required for use in decarbonisation technology pathways such as DRI. Production of iron from magnetite is well proven and underway in Australia, notably through the Port Latta plant in Tasmania (Grange Resources, 2023). Technology pathways to concentrate magnetite for use in conventional steelmaking are also suitable for zero emission steelmaking pathways. 

Near zero emissions primary steel production has been proven internationally in Sweden, achieved through significant public and private investment in the research, development, and demonstration of its HYBRIT technology (Hybrit, 2023). Following this success, Stegra in Sweden is preparing to produce green steel with about 95% less greenhouse gas emissions than conventionally produced steel (Stegra, 2025). The quality of primary steel made using decarbonisation pathways is the same as that from conventional technologies. Industry is investigating the Australian applicability of HYBRIT technology, H2 Green Steel, and similar processes. 

Steelmaking using scrap steel does not require high temperatures or carbon‑based inputs like coking coal or natural gas, as the iron has already been turned into steel, making it an attractive input that can lower costs. For every tonne of scrap used for steel production, 1.5 tonnes of carbon dioxide emissions can be avoided (World Steel Association, 2021). Increasing the use of scrap steel offers a pathway for immediate reductions in emissions. Scrap is the main input to Australia’s electric arc furnaces to produce steel, which can be powered by 100% firmed renewable electricity, when combined with energy storage. About 26% of Australian steel is produced via the EAF process (Australian Steel Institute, 2023). 

Steel mills typically source domestic scrap metal within a 200km radius of the mill due to high transport costs (KPMG, 2023). The majority of Australia's scrap metal processing capacity is far from where the materials will be received, though supply chains for material management are developing in response (CSIRO, 2024). Opportunities for Australia to further use scrap steel will be explored, noting there can be some limitations due to the presence of other metals in the scrap. For example, copper cannot be readily separated and its presence in scrap affects the quality of steel produced (Nicholas & Basirat, 2022). 

Australian research is underway through: 

  • HILT CRC with key industry stakeholders to explore suitable technology pathways
  • ARENA funding to Calix to support demonstration of its Zero Emissions Steel Technology – ZESTY
  • BlueScope, BHP and Rio Tinto partnership to produce green iron from Pilbara ores
  • CSIRO pre‑feasibility study around a common user pilot facility for low emissions ironmaking. 

Transitioning to net zero is fundamentally disrupting the global iron and steel industry. Many decarbonisation technologies would decouple iron making from steel making processes. This could see ironmaking becoming positioned close to locations that are rich in renewables resources and able to competitively produce renewable hydrogen, with decarbonised iron exported to steel making locations. 

Manufacturing and additional industries

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
72,207 4.1 71,756 598,600

* FY2024

  • Manufacturing and additional industries includes glass manufacturing, battery production, clean technologies, data centres and other digital technologies, and excludes industries captured under the other 8 subsectors in this document. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
0.6% 3 0.1% 34%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Scope 1 emissions are concentrated within large glass and magnesia businesses. 

Glass manufacturing

Glass making is the primary source of emissions within the manufacturing and additional industries subsector, due to its reliance on high heat processes (>1,600°C) requiring the use of fossil fuels to melt sand into glass. No alternative low emissions technologies or alternative heat sources have been identified to date. While the use of hydrogen is being explored, this is at very early stages. It is not yet clear that hydrogen will provide the relevant chemical properties to produce the quality of glass products needed by industry. 

Glass is also a key input into improving energy efficiency and thermal comfort in buildings, key to the Built Environment Sector Plan. Maintaining sovereign capabilities in glass manufacturing is important for security of supply to the building and construction sector. 

Battery manufacturing and clean energy technologies

Demand for products and materials to enable the economy to transition to net zero is expected to grow. Australian manufacturing is well placed to provide the infrastructure, equipment and technology needed for this transition. This includes solar panels, on and offshore wind, lower‑carbon construction, and energy storage systems and electrified heavy machinery. 

On 28 March 2024, the Australian Government announced it will invest $1 billion in the new Solar Sunshot program to accelerate the development of Australia’s solar manufacturing industry, catalyse clean energy industries, and help Australia connect to new global supply chains (ARENA, 2024). 

Batteries are a critical technology underpinning Australia’s long‑term energy security and pathway to net zero. Australian made batteries can help meet long‑term demand for stationary energy storage and support the Australian Government’s decarbonisation commitments. The global battery demand is expected to increase by 18‑fold over the next decade (Accenture, 2023). Strengthening Australia’s battery manufacturing capabilities would support firming electricity supply for those industries requiring reliable supply. 

Data centres

Australia has over 200 data centres, primarily located in and around the major capital cities Sydney, Melbourne, Brisbane, Perth, Canberra and Adelaide (Data Centre Map, 2024). Data Centres are large electricity and energy users, predominantly required for cooling (Noble, Atherton, & Berry, 2023) and to ensure uninterrupted electricity supply of their operations, that are used to support a range of digital technologies used across the economy and by households. 

In 2022–23, diesel generators (60.5%) and refrigerant gases (39.4%) were the main source of scope 1 emissions from data centres. Diesel generators are typically used intermittently, to ensure their uninterruptable electricity supply needs can be met. Most emissions from data centres are scope 2 from electricity use from the grid.

Demand for data centres is expected to grow due to increasing use of digital technologies such as Artificial Intelligence, cloud services, the internet of things and blockchain. AEMO projects that data centre electricity demand will rise from a current 4 TWh to around 12 TWh in 2029–30. 

Reducing emissions will be driven by improving efficiency of its cooling systems and electricity use, and low emission substitutes for backup electricity supply. 

Data centre owners and operators are increasingly employing innovative technologies and design elements themselves to reduce emissions and maximise energy efficiency, particularly in newly built centres. There are significant opportunities to improve energy efficiency and reduce emissions particularly in existing older data centres. 

Rooftop solar photovoltaic (PV) panel recycling

With one of the highest rates of rooftop solar PV users in the world, there will be a rapid growth in PV waste in Australia in the coming years when systems come to end of life or require replacement. Emissions reductions can be achieved through the efficient collection, transportation and treatment of PV waste, as well as the recovery of critical minerals to be reused in manufacturing new PV panels. 

The main barriers to solar panel recycling are costs, purity of extracted materials, environmental impacts of recycling processes and access to information on solar panel recycling facilities. 

A 2024 Australian Centre of Advanced Photovoltaics (ACAP) study has suggested that cumulative PV waste in Australia could reach 2–3 Mt by 2050. End‑of‑life solar panels are a source of valuable critical materials such as silver, copper, and high purity silicon, glass, and aluminium which can be utilised in the manufacture of new modules. The ACAP study suggests that in 5 years, end‑of‑life silver and aluminium from PV panels could supply 30% of future PV demand, 50% in 15 years, escalating to 100% in 25 years. The appropriate recycling and reuse of PV waste could significantly reduce emissions through lowering demand for new raw materials. The Australian Government and industry groups have been working on a number of proposals to enhance recycling and product stewardship for solar panels.

Other metals refining and smelting

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
296 0.1 43,600 13,100

* FY2024

  • These metals are key inputs in the development and manufacture of renewable energy infrastructure, particularly for battery storge, hydrogen electrolysers and solar panels. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
0.1% 3 0.1% 91%

* % of Australia’s emissions, FY2023–24 (DISR, 2025; DCCEEW, 2025b) Note: Safeguard facility emissions for Metal Smelting and Refining are calculated as a percentage of NGER emissions.

  • Emissions are concentrated within a small number of large businesses. Remaining businesses with the sector are mostly fabrication operations. 

The metals refining and smelting sector uses multiple processing operations and techniques, metals captured under this subsector for the Industry Sector Plan includes copper, zinc, lead, gold and silver. These can differ even within a metal type and will require process specific decarbonisation solutions. Reducing emissions from metals refining and smelting will rely on the development of alternative high heat processes and the electrification of existing facilities. Given that some of facilities are aged, there is an opportunity for renewed investment to encourage the adoption of new approaches towards net zero production. 

R&D is needed to explore alternative methods and processed to displace or reduce carbon‑based inputs where possible, as reactants for metals refining and smelting. 

Pulp, paper and paperboard manufacturing

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
660 0.1 1,143 18,500

* FY2024

  • The industry provides the materials needed for packaging, office supplies, and many household products.
  • Australia’s pulp and paper industry is characterised by price volatility set by global markets, making it significantly trade exposed with thin cost margins. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
0.2% 3 0.1% 53%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Heating and drying processes account for most emissions in pulp and paper manufacturing.
  • Facilities with emissions below the NGERs threshold include stationery and printing businesses. 

Digitisation of the economy has resulted in slowing demand for paper products from key markets (i.e., newspaper and print media), which has been somewhat offset by rising demand from online retailers requiring paperboard packaging products. Upstream, the sector is also affected by supply challenges, such as lack of plantation investment and state bans on native timber harvesting. 

The industry is energy and water intensive, using low and medium heat processes for drying pulp into paper and paperboard products. According to the IEA (IEA, 2023b), drying accounts for 70% of the energy use in the sector. A key challenge is gaining access to available capital to retrofit existing systems, and to affordable renewable electricity at scale. 

Pulp and paper decarbonisation will rely on optimising energy consumption, using bioenergy, adopting alternative process heat technologies, electrification, and more efficiency in waste and recycling management across the supply chain. Many of these technologies are currently commercially available. 

Waste and resource recovery

Economic context

Number of businesses* GVA (% of GDP) * Exports ($m) * Number of jobs
5,745 0.3 n/a 47,800

* FY2024

  • The sector is dominated by large companies that provide collection services and operate (and often own) waste and recycling infrastructure. It includes both public and private operators.
  • The sector is currently experiencing rapid growth in recycling and processing operation in Australia supported through recent state and federal government funding programs. 

Emissions profile

Scope 1 emissions (% whole‑of‑economy) Safeguard facilities* Safeguard facility emissions (% whole‑of‑economy) Safeguard proportion of scope 1 subsector emissions
2.8% 3 0.1% 3%

* % of Australia’s emissions, FY2023–24 (DCCEEW, 2025a; DISR, 2025)

  • Emissions from waste and resource recovery are primarily from organic matter going to landfill, which escape as fugitive emissions. Facilities with emissions below the NGERs threshold include regional and small landfills. Reporting on landfill managed by local government is also not mandatory. 

The waste and resource recovery sector is a key enabler for the circular economy and provides an essential service to the Australian community. The sector is responsible for collecting, transporting, recycling, treating, and disposing of materials. Businesses are diverse in size and location and often operate with thin margins. Service providers have little control over inputs, and there is very little tolerance for disruption to the essential services these businesses provide. These features complicate the sector’s net zero transition. 

Various technologies are available to avoid, reduce and capture emissions from the waste and resource recovery sector. As most of the sector’s emissions come from decomposing organics in landfills, approaches that divert organics for alternative treatments will have a high impact. 

Importantly, our net zero transition provides significant opportunities to create new markets for waste and resource recovery companies. Consumer preferences for more sustainable products, including products that can be repaired, reused, repurposed and recycled, mean end of life solutions for products are becoming increasingly important. 

There is an opportunity to divert materials to higher value products, such as bioenergy and biogas, as well as reusing and recycling construction materials, in partnership with the Transport and Built Environment Sector Plans. The ACCU scheme plays an important role incentivising emission reductions in this sector.