I acknowledge the Traditional Custodians of the lands on which we stand today and pay my respects to their Elders past and present.
And I extend that respect to Aboriginal and Torres Strait Islander people both here at the Press Club and amongst the wider audience.
I’ve spoken here at the National Press Club in two of my previous roles – as a trade union leader and as a government minister.
Today I address you as Chair of the Net Zero Economy Agency – a position I took up in July last year and which will conclude on the 31st of May.
On the 1st of June, I begin a new role as Chair of Australia’s Future Fund.
By that time I aim to have discharged the responsibilities that the Prime Minister and the Minister for Climate Change and Energy, Chris Bowen, asked me to undertake:
To build a new statutory authority – the Net Zero Economy Authority – that will:
- promote the orderly and positive economic transformation of Australia as the world cuts greenhouse gas emissions and fossil fuel dependence;
- ensure that workers and regions are supported, and realise and share the benefits and opportunities of the new net zero economy; and
- help Australia become a renewable energy superpower.
My instructions were clear: develop a plan that will help people and communities through change, respect their interests, create opportunities, and leave no one behind – the best of Australian values.
To go about this I’ve drawn on every bit of my experience: in the coal industry, as a trade union leader, in politics and government, and institutional investment.
I have had the privilege of working with a team of very capable and dedicated public servants, a highly skilled Advisory Board, and a very supportive PM and Minister in Chris Bowen.
The legislation for the Net Zero Economy Authority was introduced to the House of Representatives last week.
It will replace the Agency I currently head once it is passed into law.
Today I will outline for you what that Authority will do.
It will play an important role in one of the most significant economic events in Australian history: the transformation from fossil fuels to an economy powered by renewable energy and clean industries.
A lot has changed in the field of climate policy in the decade or more since I served as Minister for Climate Change in the Gillard Government.
The subsequent global agreement to an emissions reduction target of net zero by 2050 has been transformative.
The debate surrounding climate science has settled, and a global consensus has emerged that action – serious action – is needed to cut greenhouse gas emissions to address the dangerous impacts of climate change.
Lived experience is having a big influence on people.
More frequent and more devastating natural disasters.
Temperature records set and exceeded, with last year recording the highest average temperatures in 174 years of record-keeping.
Meeting the challenge
For Australia, I’ve likened the scale and significance of the net zero transformation to post-war reconstruction.
This is because of our economy’s reliance on fossil fuels: in the 2022-23 financial year alone, the total value of Australian coal and liquefied natural gas exports was almost 220 billion dollars.
More than 30% of the value of our total exports.
Taxes and royalties derived from fossil fuels play a big part in sustaining our standard of living and government service provision.
But as the world changes, demand for our fossil fuel exports will decline.
Countries with net zero commitments represent 97% of the value of Australian exports.
That’s a pretty significant figure for an emissions intensive export economy like ours.
So change is coming, in fact is well underway.
But for Australia this is a story of great opportunity.
We are uniquely endowed with abundant renewable energy and mineral resources, a skilled and resilient workforce, engineering and technical capability, large pools of capital, we have a stable investment environment and are a reliable trading partner.
And, right now, we can seize the chance to use these endowments to secure prosperity for current and future generations.
In my role I have found optimism about the future in the practical action and the positivity and determination of people when visiting Australia’s industrial regions.
These communities are now readying themselves for the opportunities of a renewables powered economy.
Governments, businesses and investors are making concrete plans for a low emissions future.
To me, the economic argument is simple: as our trading partners pursue their own emissions-reduction targets, and wealth from our fossil fuel exports declines, we must create new sources of wealth from industries powered by renewable energy.
And at the same time support people, workers, communities and regions through the change.
There is no doubt about our collective capacity to do it and do it well.
Government action
The Australian Government has been putting in place the policy and legislative frameworks to set Australia up for success.
Minister Bowen has been leading a significant amount of work to deliver the Government’s policy measures, including:
- legislated emissions-reduction targets of 43% by 2030 and net zero by 2050
- a scheme to dramatically expand the deployment of renewable energy and energy storage, enabling 82% renewable energy by 2030
- $20 billion to build the poles and wires taking renewable energy to cities and regions
- legislated obligations to reduce emissions at Australia’s largest industrial facilities by 5% a year
- decarbonisation plans for key sectors of the economy
- a $2 billion program to kick-start green hydrogen production
- a multi-billion dollar program to develop critical minerals
- new vehicle efficiency standards to provide cleaner, cheaper-to-run cars
- climate risk and greenhouse gas and energy reporting to keep companies transparent and accountable for reducing emissions
- government financing mechanisms to help drive investment in the energy transformation.
The Government will lay out the next phase of its approach in the May Budget, which will look to capitalise on Australia’s comparative advantage in minerals and renewable energy, aiming to encourage large-scale investment in green industrial production.
This is all just at the Australian Government level.
Every State and Territory has committed to net zero emissions as well, and has energy transformation and clean industry and jobs plans.
And Australian and international businesses and investors are looking at ways to decarbonise existing industries and develop new green production opportunities.
All of this activity presents a need for coordination, which is one of the functions of the new Net Zero Economy Authority.
Over the past nine or ten months we have met numerous governments, businesses, unions, regional bodies and stakeholders to get this coordination work underway.
To make sure that policies are complementary, not working against each other.
The task is to try to get everything heading in the same direction, to use resources efficiently, with a common purpose.
The Authority won’t take on the roles of existing government agencies. It will complement, coordinate, identify gaps and contribute to policy development.
This is still an early stage in Australia’s net zero transformation – there is a decades-long journey ahead.
And it’s important to bear that in mind when we read about the current social licence issues, planning problems or supply chain constraints.
These are all problems that need to be tackled.
The cross-cutting nature of these challenges means that we need new ways of working across government, and with our state and territory colleagues.
We need to work in an integrated way, thinking beyond our individual remits to recognise the interconnectedness of the problems at hand.
But significant progress is being made, and people are coming together.
Energy transition
The energy transition is the catalyst. Renewable energy generation is the key to economic transformation.
Much of our coal-fired energy generation infrastructure is nearing the natural end of its life.
We could spend an estimated $400 billion to renew it, or we could invest in a future with renewables.
The wellbeing and security of future generations presents us an obvious path.
More than $45 billion has been invested in renewables since 2017.
Renewables made up almost 40% of our total energy generation in 2023 – well over double what was generated in 2017.
Renewables were only 13% when I was Minister just 12 years ago.
And of course it’s not just large scale generation supply.
3.7 million Australian households currently generate their own solar power – accounting for an average of 11% of Australia’s electricity in 2023.
Incentives on the demand side – to drive more rooftop solar and home and community battery storage – have a role to play.
But to transform the economy, large scale generation is fundamentally important.
The state and territory governments are pushing hard on this front.
South Australia, for example, has gone from almost no renewable energy to 74% renewables in just 16 years.
Victoria and Queensland have set ambitious emissions targets and have plans to replace coal-fired generation.
NSW and other states are on the same track.
The energy transition is well underway, and is set to accelerate.
Emissions intensive regions
The energy transition is central to the work of the Net Zero Economy Authority.
It will focus on the coal-fired power stations and emissions-intensive regions of the country.
They are where the impact of change can be felt the most.
But they are also where new investment and job opportunities can be realised.
Gladstone and Central Queensland is an example I often refer to.
It’s a region we’ve been working in.
It’s an economic and industrial powerhouse.
It produces over 40% of Queensland’s energy.
It’s home to almost half of Australia’s coal mines and more than a fifth of Australian miners.
It’s a major producer of key industrial products like cement, alumina, aluminium and ammonia.
And it’s a major trade hub, with the Port of Gladstone facilitating tens of billions of dollars of trade every year in exports of coal, gas and aluminium to our trading partners.
But all this heavy industry means the region is also one of the most emissions-intensive places in the country, producing over a third of Queensland’s emissions.
In my view, successfully transforming the region around Gladstone, and similar regions around the country, must be a key national endeavour.
Support for workers, communities
Because it’s the people who matter – the families and communities – the tens of thousands whose livelihoods depend on coal mining, coal-fired power stations and emissions-intensive businesses.
These are people I have represented for much of my working life.
There’s a table of mining and energy union colleagues here today – we have had the workers they represent and the workers in regions around the country squarely in mind while designing the new Authority.
The Authority will support them through a period of change, to acquire skills, to access new employment if needed, to help create jobs in new businesses and industries.
The touchstone will be how well we handle the closure of coal-fired power stations.
The legislation for the Authority introduced into Parliament last week contains an important measure to support these workers through a redeployment scheme.
It’s called the Energy Industry Jobs Plan.
Power station operators already have plans to help workers in the lead up to closures. The Authority will work with the energy companies and unions to complement these plans:
- meeting with workers on the ground to understand their needs
- connecting them with training, financial advice and other individual supports
- helping their transition to alternative jobs
- and by offering participation in a redeployment scheme.
We will meet with large nearby businesses, and discuss what employment opportunities they have or that could be generated through measures like offering early retirement.
Workers from the closing power station will then be connected with employment opportunities with another employer in the same or a similar industry.
We will try to align people with jobs available in new clean industries.
And the Authority will coordinate across all the different players – state and local governments, TAFEs, unions and businesses – to get the best outcomes for these workers and their communities.
And we’ll continue to work with Jobs and Skills Australia to understand current, emerging and future skills needs and plan ahead.
The transformation is also an opportunity to improve the way governments work with First Nations communities, to better respect their rights and their knowledge of the land and water where economic activity occurs.
There is a real opportunity for First Nations people to be involved in and inform new investments, training, business and infrastructure to ensure the benefits of the transformation are shared.
Opportunities for First Nations people to be full and genuine partners in the transformation.
First Nations groups are already grasping these. In March, the Aboriginal Clean Energy Partnership received $1.6m in Government funding for a First Nations-led feasibility study for a massive green hydrogen project in Western Australia.
The new Authority is charged with developing these partnerships.
Investment and new clean industries
Businesses, unions, communities and local governments in the regions are all thinking about the opportunities that lie in the change ahead.
Investment will unlock them. And the prospects are immense.
To go back to my Central Queensland example, the State already has 52 large-scale renewable energy projects planned or operating, representing more than $11 billion of investment – and growing.
Industry is thinking about how they can use this renewable energy to replace coal-fired power and reduce the emissions in their operations.
Recently, Rio Tinto signed Australia’s biggest renewable energy deal to power its Boyne aluminium smelter in Gladstone with solar and wind energy.
That single aluminium smelter currently contributes more than 5% of Queensland’s emissions. If that smelter converts to firmed renewable power, it will not only make a huge contribution to emissions reduction, but sustain hundreds of jobs. It’s currently a key focus of our work.
There’s also the CQ-H2 project in Gladstone, which has brought together Japanese and Singaporean partners with the Queensland Government-owned Stanwell to develop Queensland’s largest renewable hydrogen project.
Green hydrogen can be a future energy export, as well as attracting new industry.
Orica is planning to use green hydrogen to develop ammonia for its fertiliser and explosives facility.
Fortescue is building a 50MW green hydrogen electrolyser plant in Gladstone.
Japanese firm Sumitomo plans a hydrogen pilot plant at Rio Tinto’s Yarwun alumina refinery, to help decarbonise operations.
And this is just some of the work underway.
The region’s proud history as an industrial powerhouse means it has the existing infrastructure and skilled workforces to take up the opportunities in emerging green industries.
Green hydrogen, green metals, green manufacturing.
There are opportunities like this in other industrial regions across Australia – whether that’s the Hunter Valley in NSW, Collie in WA, SA’s Upper Spencer Gulf or the Latrobe Valley in Victoria.
The South Australian Government recently announced their State Prosperity Project – a coordinated initiative to unlock the full potential of renewable energy, minerals and green manufacturing in the Upper Spencer Gulf.
We are currently working closely with the Premier and the South Australian Government to realise these opportunities.
There is innovation coming out of the Hunter – like the collaboration between AGL Energy and Fortescue to transition the Liddell and Bayswater coal-fired power stations into the Hunter Energy Hub, bringing renewable energy generation and associated industries together.
Just last week the Prime Minister announced $1 billion in support for local solar manufacturing while at the Liddell power station site.
There’s also the Orica and Origin Energy hydrogen plan for Kooragang Island in the Port of Newcastle.
Or the transition of Australia’s biggest aluminium smelter, Tomago, to renewable energy.
And in the Pilbara, Rio Tinto and BHP, in conjunction with BlueScope Steel, are looking at an electric smelting furnace to decarbonise iron production.
Engie is building one of Australia’s biggest hydrogen electrolyser projects at the Yara fertiliser plant near Karratha.
Korea’s largest steel producer POSCO is proposing to invest $28 billion in green hydrogen and $12 billion in green steel.
And when offshore wind gets going in Bass Strait, the Latrobe Valley will face the best economic opportunities it’s seen in many decades.
If we do this well, Australia has the opportunity to develop numerous new clean industrial projects, involving billions of investment dollars and providing thousands of jobs.
The Net Zero Economy Authority is putting together a pipeline of these projects and will be figuring out how to help bring them to concrete investment decisions.
Hundreds of billions of dollars in investment will be needed to achieve net zero in Australia.
Neither Government funding nor private capital alone can meet this challenge.
It will take both, working together, to secure the opportunities of Australia’s net zero future.
For Government, this means providing the policy context and direction that will encourage business to invest.
The United States has changed the game in this regard. The US Inflation Reduction Act makes hundreds of billions of dollars available to incentivise investment in clean energy, technologies and industrial processes.
Other countries are now following suit: the EU, Japan, Korea – they’re all making unprecedented investments in their industrial base.
The race is on to secure the industries of the future. Australia needs to respond. And we are.
And while we can’t go toe-to-toe on investment with countries like the US, one thing is clear.
Australia has a compelling comparative advantage in our abundance of renewable energy and mineral resources – plus our skilled workers and reliability as an investment destination and trading partner.
These advantages can be harnessed to develop industries that will diversify our economy and locate Australia in low-carbon global markets.
The Government has identified four initial priority areas for building Australia’s net zero economy:
- refining and processing critical minerals
- supporting manufacturing of energy generation and storage technologies, including batteries
- producing renewable hydrogen and its derivatives like ammonia
- and forging green metals.
All underpinned by a supply of abundant, cheap and reliable renewable energy.
The Authority has the important job of helping catalyse the investment needed to get these transformational projects and initiatives off the ground.
This can include utility and infrastructure projects like water desalination, solar farms, pipelines and port upgrades, pumped hydroelectricity, wind farms, and electricity transmission and distribution.
It can also include new batteries, hydrogen, green metals and solar manufacturing facilities.
Or shared manufacturing and processing facilities, like refineries for critical minerals.
And research and commercialisation initiatives, like common-use pilot or demonstration plants.
The economics of some of these projects are challenging, and far from straightforward for private capital to reach final investment decisions.
The Australian Government already has investment vehicles like ARENA, the Clean Energy Finance Corporation and the National Reconstruction Fund that help through grants, concessional debt, loan guarantees, and sometimes equity investments.
With particularly large transformative projects Governments may need to consider being significant equity players, helping to de-risk projects, and adopting a long-term view before recovering capital.
International partners
Developing these projects will also require working closely and collaboratively with our major trading partners – which will likely be major investors.
There’s a lot at stake for our key trading and security partners in the net zero transition.
Japan and Korea are our largest export markets for coal and LNG. Both have committed to net zero emissions.
Japan imports about 90% of its energy needs, and neither Japan nor Korea are endowed with the same renewable energy resources we have here in Australia.
To guarantee their energy security, Japan and Korea are natural partners with Australia.
As their fossil fuel dependency reduces we can work with them to replace it with clean energy. It’s in our national interest and theirs.
Both countries also import Australian iron ore and coking coal to make steel.
With the development of Australia’s hydrogen industry, there’s an opportunity for them to make green iron here – in Australia – and export it back to Japan and Korea to help them achieve their decarbonisation goals.
While becoming a renewable energy superpower, we can also emerge as a green metals leader by deepening our international relationships.
Conclusion
The Net Zero Economy Authority’s role is to help realise the opportunities I have pointed to.
And to ensure that workers, communities and our regions share the benefits.
It’s been a privilege for me to have been involved thus far, and I sincerely thank all of those with whom I have worked.
I’ve had the benefit of past involvement in big economic events – tariffs coming down, industry restructuring, industrial disputes, the fight over carbon pricing, commercial transactions.
The most vital thing I’ve learnt is the importance of values to guide the way we go about change—
Respecting people, ensuring fair treatment, aiming at equitable outcomes, generating a commitment to common purpose.
We have endeavoured to embed these values in the new Authority – through the people we’ve employed, the policies we’ve developed, the legislation, the culture, and our engagement with the community.
It will be key to positive and orderly change.
The Treasurer has said that the net zero transformation will define the decade.
It may even define this century.
It should be a transformation built on the very best of Australian values, and it should deliver significant benefit for future generations.
And we can do it – just as countless others have done before us, at similar moments of historic change.
Thank you and I look forward to your questions.