For Australia and its trading partners to meet their policy commitments, fossil fuel commodity supply chains will be replaced in future by low-emission energy commodities such as hydrogen and renewable electricity, with existing technologies like gas playing a role in the transition.
These policy commitments depend on a transition to zero-emission supply chains. If industry can make technologies like carbon capture and storage (that reduce the emissions of conventional fuels such as gas) viable at scale, existing commodities may also be able to play a role in supporting this transition with lower undesirable impacts. However, Australia still needs to transition to zero-emission exports to protect its long-term prosperity.
Coal and natural gas were this country's second and third biggest exports in 2019-2020.75 Australia should invest in technology and infrastructure that will allow it to remain a supplier of choice in global energy commodity markets.
It should also support developing industries around energy-intensive and value-added products such as green steel and aluminium that will support the Jobs and industries of the future. There are further significant opportunities in commodities used in the production of new energy technologies - Australia's combined export earnings from lithium, copper and nickel are forecast to exceed thermal coal export earnings by 2026.76
With a long lead time for developing new industries, the Australian Government and state and territory governments should be acting now to identify, plan and nurture these future energy exports. In particular, they need to develop a suitable ecosystem for the new low-emission energy export industry.
This should include identifying key precincts and developing infrastructure plans, similar to the regional hydrogen hubs described in the Australian Government's Technology Investment Roadmap: First Low Emissions Technology Statement - 202077 and the National Hydrogen Infrastructure Assessment being completed as part of the National Hydrogen Strategy.78 Setting up dedicated hubs would accelerate these new industries, create jobs through supply chain efficiencies, and foster collaborative innovation.
This national coordination is particularly important given the scaling challenges a developing hydrogen industry will face. The renewable energy industry will need to ramp up to enable a domestic electricity sector transition and provide for electrification of transport and other services, as well as provide electricity for hydrogen production. At the same time, the entire industry will face global competition for resources and materials.
There need to be initiatives now to start building the supply chains needed to deliver a massive increase in Australia's renewable generation capacity, including the relevant skills and services.