Australia will need to retool commodity exports to achieve net-zero emissions by 2050
As Australia gears up efforts to achieve net-zero emissions by 2050 it is clear that the nation would have to commercialize low emission technologies and change its energy mix in the next 30 years.
Speaking on Monday ahead of a climate summit occurring this week, Australian PM Scott Morrison said that the Aussie government was charting its own course to ensure “Australia is well placed to prosper through the great energy transition of our time, consistent with the strong action on climate change. “
Australia aims to reduce its emissions by 70 percent per unit of GDP on 2005 levels, and halve it when considered in per capita emissions, by 2030. According to Morrison, Australia has lowered its emissions by 19 percent at the end of 2020 when compared to the 2005 levels.
This is greatly due to a major switch to the production of renewable energy. Nearly 83% of power generation is expected to come from solar and wind by 2050 as compared to about 20% last year. Natural gas, bio energy, geothermal and small modular reactor will supply the remaining 17% in power output, data from WoodMac data shows.
However, in order to move forward with the decarbonization efforts, coal into power is expected to be phased out by 2035.
“The key to meeting our climate change ambitions is commercialisation of low emissions technology. We are not going to meet our climate change targets through punishing taxes,” Morrison pointed out.
As explained, Australia already produces many of the products that will be in growing demand as part of a low carbon future – from copper to lithium.
Wood Mackenzie Asia Pacific Head of Markets and Transitions, Prakash Sharma, believes Australia will need to retool its commodity exports industry to align with the Paris climate targets.
This is extremely important since Australia’s major trading partners – China, Japan and South Korea – are already in transition towards that goal.
“Our analysis shows that Australia can reach net-zero emissions before 2050. Although the pathway requires complete transformation of its traditional energy and export sectors, there are new opportunities to capitalise on,” Sharma said.
“This will require Australia to become a significant player in low-carbon hydrogen trade as well as being able to offer carbon storage and offset services. Total carbon removal capacity reaches approximately 200 Mt per annum by 2050 in Australia.”
Australia aims to tap into the potential of this switch by becoming a major player in the hydrogen industry by 2030 in line with its National Hydrogen Strategy.
The strategy, launched in 2019, outlines a set of nationally coordinated actions aimed at establishing ‘Hydrogen Hubs’ for production and export to the country’s major energy trading partners across the Asia Pacific region and other regions.
Aside to hydrogen, which is a top priority in the country’s First Low Emissions Technology Statement 2020, Australia also plans to focus its investments on energy storage, low carbon materials, as well as carbon capture and storage, CO2 compression and transport.