This page belongs to: National Battery Strategy

Priority 1: Manufacturing

Summary of actions

New actions

  • Building Future Battery Capabilities 
  • Support to deliver the Australian Made Battery Precinct  
  • Future Made in Australia:
    • Innovation Fund 
    • Skilling the Clean Energy Workforce 
    • Expanding the New Energy Apprenticeships Program
    • Building Women’s Careers Program
  • Diversity in STEM Funding

Existing actions

  • Powering Australia Industry Growth Centre (PAIGC)
  • 10,000 New Energy Apprenticeships
  • Clean Energy Capacity Study
  • National Skills Agreement
  • Powering Australia Plan:
    • Capacity Investment Scheme
    • Community Batteries For Household Solar Program
  • Australian Energy Employment Report

Linked initiatives

  • National Science and Research priorities
  • Net Zero Economy Authority (NZEA)
  • CSIRO 
  • Cooperative Research Centre Program 
  • Economic Accelerator 
  • Australian Research Council 
  • The Trailblazer Universities Program
  • The Startup Year Program
  • Australian Universities Accord

Opportunities

Australia has all the ingredients to be a world leading battery manufacturer – the minerals, expertise, relationships and ambition. With effective investment in strong foundations, Australia can have a thriving, diverse battery industry that strengthens Australian supply chain resilience and builds critical sovereign capabilities. 

The Critical Minerals Strategy identified that Australia has significant potential to add more value to its natural resources. The government’s Future Made in Australia policy promotes private investment in processing and refining of critical minerals at scale, making Australia even more central to battery supply chains. 

As Australia grows its critical minerals processing and refining capabilities, the costs of vertically integrated production of battery active materials are in turn expected to decline. This will provide Australian producers with a cost advantage relative to international competitors (Accenture 2023). This is especially the case for battery active materials and batteries that are installed for final use in Australia, such as flow batteries that are integrated into renewable electricity systems and industrial facilities.

Australia is also a compelling market to commercialise and scale new battery innovations. Access to leading innovators, a skilled workforce, strong trade partnerships, local demand and a competitive business environment have underpinned the success of Australia’s advanced manufacturing sector. 

These factors are already supporting the competitiveness of companies manufacturing battery packs and cells for specialised applications in Australia. The growth of the global batteries market presents a significant growth opportunity for this sector. Australian manufacturers have the potential to build expertise and competitiveness in critical components and product segments. Trade integration will expand Australian businesses’ market opportunities and continue to be an important conduit for new innovations.

Thanks to our high-quality mineral and renewable energy resources, Australia has potential to produce battery products that have lower emissions and better ESG standards than many other countries. For example, Australian produced refined-sulphide nickel produces only one-half to one-sixth the emissions of refined-laterite nickel (Mandala 2024). Lower emissions intensities are possible with further deployment of renewables and electrification. Effective product standards such as the Guarantee of Origin scheme will support Australian producers to demonstrate compelling emission intensity standards to customers. A growing onshore battery industry with strong ESG credentials will support Australia to compete in these expanding markets and accelerate their development.

Australia’s commitment to reaching net zero by 2050 and reducing emissions by 43% by 2030 is also driving significant growth in domestic demand for batteries. Demand from Australian customers for products that meet high cybersecurity and climate resilience standards will also provide a source of differentiation for some domestic manufacturers. This will contribute to supporting Australia’s broader economic resilience and security.

Effective public policy and targeted investments can support the growth of a competitive industry. Public provision of important infrastructure supports new industries to operate at scale, achieve high levels of productivity and promote strong competition where new entrants can compete effectively with incumbents. This has included building ports, roads, pipelines and train lines to support the development of traditional industries such as resources and agriculture. As Australia diversifies its industrial base and adds more value to existing resources, new infrastructure and public investment can play a role promoting the growth of new competitive industries.

Battery manufacturing has also been identified as being aligned with the principles for priority industries under the Future Made in Australia National Interest Framework’s Economic Resilience and Security Stream. Reflecting this, the government is making targeted investments that unlock private investment in battery manufacturing at scale, in ways that improve economic resilience and security.

Targeted actions that support the strategic development of Australian battery manufacturing capabilities can support Australia’s energy transition, improve Australia’s economic security and resilience, and make a significant contribution to economic growth and the modernisation of Australia’s industrial strengths. 

Transforming Australian industry

A thriving battery industry will play a vital role in rebuilding Australia’s industrial base. There are three aspects to this transformation: 

Value 

The government is supporting the battery industry to capture greater value from our natural resources and shift towards higher value-added manufacturing activities. This will create sustainable long‑term growth and give us a commercial advantage that is difficult for rivals to imitate because of our natural mineral advantages providing vertical integration benefits. 

Diversification 

To create a diversified battery industry, the government will seek to build flexible capability by capitalising on new points of competitive advantage. This includes Australia’s high ESG and cybersecurity standards, and the unique needs for local climates and energy systems. To ensure diversification, Australia will continue to explore the opportunities of nascent and emerging battery technologies and highlight the capabilities of the domestic industry to attract investment.

Scale 

The government will catalyse the growth of the battery industry by supporting businesses to access new markets, diversify their product base and attract investment. This will advance Australia’s renewable energy superpower ambitions, align with state and territory programs, and build on bilateral and multilateral relationships. This will help create a strong, credible and more predictable demand for Australian made batteries and components.

What we are doing

The Powering Australia Plan focuses on creating jobs, cutting power bills and reducing emissions by boosting renewable energy. As part of this plan, the government has set the goal of powering Australia with 82% renewable energy by 2030. 

Growing battery manufacturing capabilities can play a vital role achieving this target. Australian made batteries can secure a grid based on renewable electricity. The Australian Energy Market Operator (AEMO) has forecast that Australia will need 19 GW of energy storage capacity in the grid by 2030. This will more than double to 43 GW by 2040, with over a half of it in distributed consumer scale energy storage (including EV to grid) (AEMO 2023). Bringing batteries into the grid will create energy storage to help with grid stabilisation and flexibility. 

Powering Australia Industry Growth Centre (PAIGC)

The $14 million PAIGC will support Australian businesses looking to manufacture, commercialise and adopt renewable technologies. The PAIGC will: 

  1. support businesses looking to locally manufacture renewable technologies and commercialise their ideas 
  2. encourage connection between critical minerals producers and renewables manufacturers 
  3. facilitate partnerships between governments, research institutions, and industry to drive the development and adoption of renewable technologies in Australia 
  4. support businesses in navigating battery regulatory barriers, and support First Nations businesses to contribute to developing renewable technologies through engaging a First Nations Business Adviser.

Existing actions

  • The Powering Australia Industry Growth Centre (PAIGC) fulfils a commitment by the Australian Government to help Australian businesses manufacture, commercialise and adopt new renewable technologies – including batteries. 
  • Committed up to $100 million in investment to establish the Australian Made Battery Precinct in partnership with the Queensland Government. 
  • The government’s Powering Australia Plan, to create jobs, reduce pressure on energy bills and lower emissions by boosting renewable energy deployment. These initiatives create clear opportunities for battery manufacturers. Initiatives under the Plan include: 
  • The National Robotics Strategy, which the government is creating to guide Australia’s development, manufacturing and responsible use of robotics and automation technologies. These are vital for battery cell manufacturing processes.
  • The $25 million Future Battery Industries Cooperative Research Centre (FBICRC) is an independent centre located at Curtin University in Western Australia that enables the growth of battery industries to power Australia’s future. 

Linked initiatives

  • The $15 billion National Reconstruction Fund (NRF) will finance projects that diversify and transform Australia’s industry and economy. The NRF includes:
    • Up to $3 billion for renewables and low emissions technology
    • $1 billion for value-adding in resources
    • $1 billion for critical technologies
  • $1 billion for advanced manufacturing.
  • The Net Zero Economy Authority will promote an orderly and positive net zero economic transformation for Australia, its regions, industries, workers and communities. Using our skilled workforce to support battery manufacturing industries scaling up.
  • Clean Energy Finance Corporation mobilises investment in renewable energy projects, as well as manufacturing businesses and services.
  • Australian Renewable Energy Agency (ARENA) provides grant funding to improve competitiveness and supply of renewable energy.
  • Industry Growth Program provides advice and matched grant funding for small and medium-sized enterprises (SMEs) and start-ups to commercialise research.
  • The R&D Tax Incentive supports companies conducting eligible R&D in all industry sectors, including R&D in battery materials and technology.
  • The Critical Minerals Strategy provides a framework and initiatives to grow Australia’s critical minerals sector. 
  • The Northern Australia Infrastructure Facility (NAIF), which is actively supporting the Northern Australia as a place for the battery industry. To support the Critical Minerals Strategy, NAIF has earmarked $500 million to support critical minerals projects in Northern Australia.  

What we will do

The government’s actions will support Australian industry to move beyond extraction and into higher-value opportunities and jobs. This will build sovereign capacity in battery manufacturing that is competitive, sustainable, vertically integrated, and diverse. 

These actions will help battery SMEs to bridge the commercialisation ‘valley of death’ and capture opportunities for growth. This will ensure more batteries and components are manufactured in Australia and help keep and attract battery expertise onshore. These actions will also support medium to large battery businesses to take on larger scale projects and reduce operational costs. This will help businesses capture more opportunities across the battery value chain. 

The government will provide $22.7 billion over 10 years from 2023–24 to accelerate investment in Future Made in Australia priority industries, including renewable hydrogen, green metals, low carbon liquid fuels, refining and processing of critical minerals and manufacturing of clean energy technologies including in the solar and battery supply chains. Funding will catalyse clean energy supply chains and support Australia to become a renewable energy superpower. 

The government’s proposed Future Made in Australia Act will include a National Interest Framework that identifies priority industries where public investment may be warranted to align economic incentives with the national interest and unlock private investment at scale. Under the framework, priority industries can be identified through two streams – the 'net zero transformation stream’ and the ‘economic resilience and security stream.’ Clean energy manufacturing – including batteries – is a priority industry under the economic resilience and security stream. Domestic battery manufacturing capability will be necessary to deliver economic resilience and security for Australia in our transition to net zero. As global demand for batteries increases, domestic battery manufacturing provides an opportunity to add more value to Australia’s resources and integrate into global supply chains, building resilience into those supply chains from potential disruptions or barriers.

Australia is moving beyond a ‘dig and ship’ economy to become a renewable energy superpower. This is an opportunity unique to Australia, as no other nation has the advantages Australia does. Now is the time to capitalise on this economic opportunity. 

New actions

  • The $523.2 million Battery Breakthrough will strengthen economic resilience by providing production-linked incentives to support Australian manufacturers to develop critical battery manufacturing capabilities. It will help Australia capture a once in a generation opportunity to develop a thriving domestic battery industry. The government will work closely with industry and other stakeholders to design, develop and deliver the Battery Breakthrough.
  • $1.7 billion over 10 years from 2024–25 for the Future Made in Australia Innovation Fund, to be administered by the Australian Renewable Energy Agency (ARENA), to support innovation, commercialisation, pilot and demonstration projects and early-stage development in priority sectors. These include renewable hydrogen, green metals, low carbon liquid fuels and clean energy technology manufacturing such as batteries.
  • The Australian Government will provide $7 billion in support for Australian critical minerals processing from 2027–28 to 2040–41 through the new Critical Minerals Production Tax Incentive. The Critical Minerals Production Tax Incentive will start from 1 July 2027 and provide a refundable tax offset of 10% of eligible Australian processing costs for all 31 critical minerals currently on the critical minerals list. This includes many commonly used battery minerals like lithium, cobalt, nickel, graphite and high purity alumina.
  • $5.6 million has been committed for further analysis and research to support the delivery of the Australian Made Battery Precinct, in partnership with the Queensland Government. The precinct will support industry collaboration and pilot-scale manufacturing of battery technologies, helping manufacturers grow their businesses.