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LOW EMISSIONS TECHNOLOGY

STATEMENT 2021

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LOW EMISSIONS TECHNOLOGY STATEMENT 2021

Australian Government Department of Industry, Science, Energy and Resources.

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ISBN:

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LOWEMISSIONSTECHNOLOGYSTATEMENT2021COPYRIGHT©CommonwealthofAustralia2021OwnershipofintellectualpropertyrightsUnlessotherwisenoted,copyright(andanyotherintellectualpropertyrights,ifany)inthispublicationisownedbytheCommonwealthofAustralia.CreativeCommonsAttribution4.0InternationalLicenceCCBY4.0AllmaterialinthispublicationislicensedunderaCreativeCommonsAttribution4.0InternationalLicence,withtheexceptionof:•theCommonwealthCoatofArms•contentsuppliedbythirdparties•logos•anymaterialprotectedbytrademarkorotherwisenotedinthispublication.CreativeCommonsAttribution4.0InternationalLicenceisastandardformlicenceagreementthatallowsyoutocopy,distribute,transmitandadaptthispublicationprovidedyouattributethework.Asummaryofthelicencetermsisavailablefromhttps://creativecommons.org/licenses/by/4.0/.Thefulllicencetermsareavailablefromhttps://creativecommons.org/licenses/by/4.0/legalcode.Contentcontainedhereinshouldbeattributedas:LOWEMISSIONSTECHNOLOGYSTATEMENT2021AustralianGovernmentDepartmentofIndustry,Science,EnergyandResources.ThisnoticeexcludestheCommonwealthCoatofArms,anylogosandanymaterialprotectedbytrademarkorotherwisenotedinthepublication,fromtheapplicationoftheCreativeCommonslicence.TheseareallformsofpropertywhichtheCommonwealthcannotorusuallywouldnotlicenceotherstouse.ISBN:Print:978-1-922125-95-8Online:978-1-922125-94-1DISCLAIMERTheCommonwealthasrepresentedbytheDepartmentofIndustry,Science,EnergyandResourceshasexercisedduecareandskillinthepreparationandcompilationoftheinformationinthispublication.TheCommonwealthdoesnotguaranteetheaccuracy,reliabilityorcompletenessoftheinformationcontainedinthispublication.Interestedpartiesshouldmaketheirownindependentinquiresandobtaintheirownindependentprofessionaladvicepriortorelyingon,ormakinganydecisionsinrelationto,theinformationprovidedinthispublication.TheCommonwealthacceptsnoresponsibilityorliabilityforanydamage,lossorexpenseincurredasaresultoftherelianceoninformationcontainedinthispublication.LOWEMISSIONSTECHNOLOGYSTATEMENT20212LOWEMISSIONSTECHNOLOGYSTATEMENT2021ContentsMessagefromtheMinister5MessagefromtheChair6Ataglance11Introduction15AustralianGovernmentinvestment24Governmentactions29Prioritytechnologies43Enablinginfrastructure47Emergingtechnologies53Acceleratingdeployment61Australia’sresourcesopportunity87Impactevaluationframework974LOWEMISSIONSTECHNOLOGYSTATEMENT20215LOWEMISSIONSTECHNOLOGYSTATEMENT2021MessagefromtheMinisterTheTechnologyInvestmentRoadmapanditsLowEmissionsTechnologyStatementssetoutAustralia’stechnology-ledapproachtoacceleratingthedevelopmentoftechnologiesessentialtoachievingnetzeroemissions.Ourgoalistodrivedownthecostofaportfoliooflowemissionstechnologies,becausegettingthemtocommercialparitywithexistingapproacheswillmakethemmoreattractivetoconsumersathomeandabroad.Ourapproachistechnologynottaxes,becauseit’stheonlywaytoreduceemissionswithoutimposingnewcostsonhouseholdsorbusinesses,orraisingthepriceofexistingenergysources.Toachievethisgoal,weareinvestingmorethan$20billioninnewenergytechnologiesoverthecomingdecade,todrivebetween$80billionandupto$120billionofcombinedpublicandprivateinvestmentandcreating160,000jobs.Likethegovernment’s10yearfundingmodelforinfrastructureinvestment,wehaveadoptedadecade-longfundingmodeltobringforwardprivatesectorinvestmentinlowemissionstechnologies.Thegovernmentwillcontinuetorefineitsinvestmentsovertime.Sincethereleaseofthefirststatement(LETS2020)inSeptember2020,wehavecommittedanadditional$1.7billioninnewfundingacrossarangeofareasincludingcleanhydrogen,carboncaptureandstorage,soilcarbonmeasurementandaseriesofinternationalpartnerships.ThereleaseofLETS2021,thesecondannualstatementundertheroadmap,isanimportantelementofAustralia’sLong-TermEmissionsReductionPlantoachievenetzeroemissionsby2050.AnnualreviewsofourtechnologyprioritiesandtheinvestmentswearemakingarepartofourcommitmenttobeingaccountableforprogressunderourPlan.LETS2021expandstheprioritiessetoutinLETS2020,addinganewprioritytechnologyandassociatedstretchgoal,aswellasidentifyingnewactionsthegovernmentwilltaketoestablishAustraliaasaleaderinlowemissionstechnologies.Gettingthecostofsolarenergydowntolessthan$15permegawatthour,aroundathirdoftoday’scost,willhelpusachievedramaticcostreductionsincleanhydrogenproducedfromelectrolysisandinlowemissionsmaterials.Clean,lowcost,bulkelectricitysupplywillalsohelpmaintainAustralia’straditionaladvantageinaffordableandreliableenergy.Ourcontinenthasthehighestlevelsofirradiationofanyintheworldandwehaveanincredibletrackrecordofdrivinginnovationinsolarphotovoltaics,withmorethan90%ofsolarpanelsmanufacturedaroundtheworldusingAustraliantechnology.LETS2021alsoaddsenablinginfrastructureasanewtechnologycategory,whichwillfocusoninfrastructuretohelpdeploypriorityandemerginglowemissionstechnologiesatacommercialscale,includingforelectricvehicles.IwouldliketothanktheChairoftheTechnologyInvestmentAdvisoryCouncil,DrAlanFinkel,andtheothercouncilmembers–DrewClarke,JoEvans,GrantKing,DavidParker,JustinPunch,StevenSkala,AlisonWatkins,ShemaraWikramanayakeandBenWilson–fortheirinvaluableexpertiseandadviceindevelopingthisyear’sstatement.TheHonAngusTaylorMPMinisterforIndustry,EnergyandEmissionsReduction6LOWEMISSIONSTECHNOLOGYSTATEMENT2021MessagefromtheChairThedecadeisstillyoung,adecadeduringwhichwemustaccelerateprogressinlowemissionstechnologiesintobroadandlastingbenefits.Thistechnologicaltransformationhasthepotentialtofuelourlong-termprosperity,pavethewayfornetzeroemissionsby2050andpreserveourplanet.ButitrestsonourabilitytopromoteAustralia’sunmatchedenterpriseandcreativityandexpandearlywinsinlowemissionstechnologiesintomainstreamsolutions.The2021LowEmissionsTechnologyStatement(LETS)representsthesecondimportantmilestoneinthedevelopmentofaroadmaptoguideourpathtowardthistarget.LETS2021istechnologyagnostic–selectingprioritiesthroughthefiltersofabatementpotential,economicbenefit,Australia’scomparativeadvantageandresponsivenesstogovernmentinvestment–whiletakingactiontolowertheadoptioncostsfornewandemerginglowemissionstechnologies.Itunderscorestheimportanceofresearchanddevelopment,regulations,communityengagement,voluntaryactionandefficientoperationofmarkets.Itintroducesnewpolicyinitiatives,addsultralow-costsolarasaprioritytechnologyinrecognitionofthecontributioncleanelectricitymakestothesuccessoftheotherprioritytechnologies,andprovidesanewfocusonenablinginfrastructuresthatareessentialtocurbingemissionsacrosstheelectricityandtransportsectors.Astheglobalchallengeofclimatechangehasbecomedramaticallyevidentinrecentyears,sotoohastheneedforgreaterinternationalcooperation.WehavefosteredpartnershipswithGermany,Japan,theRepublicofKorea,SingaporeandtheUnitedKingdom,toadvancethedevelopmentanddeploymentoflowemissionstechnologiesandembraceourcollectiveresponsibilitytoprotectourcommonhome.Itisaprivilegetobepartofsuchastrategic,rigorousandadaptiveapproachthatreflectsthevigourandvisionthischallengedemands.IthankMinisterAngusTaylorfortheopportunitytocontribute,andforhiswiseguidanceandengagementthroughout.Ialsoexpressmysincerethanksandappreciationtomyfellowcouncilmembers.Theyhavereflecteddeeplyonthetechnologychallenges,andopportunities,forAustralia.Theirastutecounselhasmadeitpossibletotakethenextstepinthisjourney.IacknowledgethestrongcapabilityandprofessionalismfromtheDepartmentofIndustry,Science,EnergyandResourcesandIoffermyspecificthankstothededicatedteamthathasimplementedthework.Finally,Ithankallourindustrypartnerswhohavesharedtheirexpertknowledgeoverthepastyear.DrAlanFinkelAOSpecialAdvisertotheAustralianGovernmentonLowEmissionsTechnologyChairoftheTechnologyInvestmentAdvisoryCouncil7LOWEMISSIONSTECHNOLOGYSTATEMENT2021OurVisionAustralia’sbigtechnologychallengesHowgovernmentwillmakeadifferenceAustralia’sprinciplesforemissionsreductionScalinggeologicalandbiologicalsequestrationtoprovidegloballysignificantsequestrationofCO₂Investinlowemissionstechnologyresearch,development,demonstrationandearly-stagecommercialisationFacilitatevoluntaryactionbybusinessesandconsumerstoreduceemissionsInvestinenablinginfrastructureandtechnologyEnsuretransparencyandaccountabilitytoinformconsumersWorkwithinternationalpartnersAprosperousAustralia,recognisedasagloballowemissionstechnologyleaderDeliveryoflow-cost,cleanandreliableenergytohouseholdsandindustryfortransportation,heating,lightingandproductionExpandingproductionandincreasingproductivity,creatingjobsandsubstantiallyreducingemissionsfromAustralia’sprimaryindustriesPreservingandexpandingonshoremanufacturingofenergy-intensiveproductsandcapturingnewexportmarketsforlowemissionscommoditiesTechnologynottaxesExpandchoices,notmandatesDrivedownthecostofarangeofnewtechnologiesKeepenergypricesdownwithaffordableandreliablepowerBeaccountableforprogress8LOWEMISSIONSTECHNOLOGYSTATEMENT2021PriorityTechnologiesAchievingoureconomicstretchgoals2020202520302035204020452050CleanhydrogenCleanhydrogenproductionunder$2perkilogramUltralow-costsolarSolarelectricitygenerationat$15perMWhEnergystorageElectricityfromstorageforfirmingunder$100perMWhLowemissionssteelLowemissionssteelproductionunder$700pertonne(basedonthemarginalcost)LowemissionsaluminiumLowemissionsaluminiumunder$2,200pertonne(basedonthemarginalcost)CarboncaptureandstorageCO2compression,hubtransportandstorageforunder$20pertonneofCO2SoilcarbonSoilorganiccarbonmeasurementunder$3perhectareperyearcleanhydrogenproducedfromnaturalgaswithemissionscapturedandstoredpermanentlyundergroundistechnicallyandeconomicallyfeasible,butsubjecttoofftakeagreements,developmentapprovalsandtheadoptionofahydrogenGuaranteeofOriginscheme†priceassumptionsfortheotherprioritytechnologiesdon’tyetincludethereductioninelectricitypricesexpectedfromultralow-costsolar,ortheassociatedupsidebenefitsformeetingthestretchgoals‡economicallyviableinthelate2020s,butsubjecttocapitaldevelopmentcycles^subjecttoofftakeagreementsanddevelopmentapprovalsLithium-ionbatteriesHydrogenanddirectreductionofiron‡RenewableelectricityandinertanodesExpecteddeployment^Advancementinproximalsensing,modellingandremotesensingtechnologiesLargescalesolar†SteammethanereformingwithCCSRenewableelectrolysisHigherconfidenceofachievingstretchgoalEarliestdateforachievingstretchgoalLegend9LOWEMISSIONSTECHNOLOGYSTATEMENT2021Newgovernmentactionsin2021AdvancingtheroadmapBatterychargingandhydrogenrefuellingstationsDigitalgridtosupportgrowthinwindandsolargenerationLowemissionscementtoreduceemissionsfromcementproductionLivestockfeedsupplementstoreducemethaneemissionsfromcowsandsheepOurActionsEnablinginfrastructureEmergingtechnologiesAnewcategoryforinfrastructurethatwillhelpdeploypriority,emergingandprovenlowemissionstechnologiesatcommercialscale,andsupportconsumerchoiceTwoemergingtechnologiesshowpromiseforprioritisationinfuturestatementsandwillbesupportedbyearlyinvestmentsSolar303030initiativeInfrastructureassessmentCleanhydrogenindustrialhubsVoluntaryzeroemissionsgasmarketImpactevaluationframeworkOutlinesmetricstotrackourprogressAcceleratingdeploymentofprioritylowemissionstechnologiesIdentifiesopportunitiestomeetourstretchgoalsAustralia’sresourcesopportunityinanewenergyeconomyHighlightsresourceopportunitiesforAustraliathroughtheglobaladoptionoflowemissionstechnologies10LOWEMISSIONSTECHNOLOGYSTATEMENT202111LOWEMISSIONSTECHNOLOGYSTATEMENT2021AtaglanceAbouttheLowEmissionsTechnologyStatement2021ThisisthesecondLowEmissionsTechnologyStatement(LETS2021)releasedbytheAustralianGovernment.AnnualstatementsarereleasedundertheTechnologyInvestmentRoadmap.TheroadmapisthecornerstoneofAustralia’sLong-TermEmissionsReductionPlantomeetnetzeroemissionsby2050.Itisanenduringprocesstoacceleratethedevelopmentandcommercialisationofnewandemerginglowemissionstechnologiestoreachcostparitywithexistinghighemissionstechnologies.TheAustralianGovernment’stechnology-ledapproachwillreduceemissionswithoutimposingnewcostsonhouseholds,businessesortheeconomy.PrioritylowemissionstechnologiesThefirstLowEmissionsTechnologyStatement,releasedin2020(LETS2020),identifiedfiveprioritytechnologiesandseteconomicstretchgoalsforeachone:cleanhydrogen–productionunder$2perkilogram(kg)energystorage–electricityfromstorageforfirmingunder$100permegawatthour(MWh)lowemissionsmaterials(steelandaluminium)–lowemissionssteelproductionunder$700pertonneandlowemissionsaluminiumproductionunder$2,200pertonne1carboncaptureandstorage(CCS)–carbondioxide(CO₂)compression,hubtransportandstorageunder$20pertonneofCO₂soilcarbon–soilcarbonmeasurementunder$3perhectareperyear.Economicstretchgoalsareambitiousbutrealisticgoalstobringprioritylowemissionstechnologiestocostparitywithexistinghighemissionstechnologies.1LETS2020identifiedthisprioritytechnologyas‘lowcarbonmaterials(steelandaluminium)’.Thischangehasbeenmadetoclarifythattheprioritytechnologyfocusisonlowemissionsproductionforsteelandaluminiumproductsratherthanproductsthatcontainlowelementalcarboncontent.Tobeconsistentwithotherprioritytechnologies,thelowemissionsmaterialsstretchgoalshavebeenrefinedtoreflectcosttargetsratherthanpricetargets.12LOWEMISSIONSTECHNOLOGYSTATEMENT2021LETS2021introducesultralow-costsolarelectricitygenerationasanotherprioritytechnology.Cheap,cleanelectricityisintegraltounlockingtheeconomic,employmentandabatementpotentialofotherprioritylowemissionstechnologiesandsupportingelectrificationofothersectorssuchastransport,buildingsandindustry.Wehavesetaneconomicstretchgoalforsolarelectricitygenerationat$15perMWh,orapproximatelyathirdoftoday’scosts.GovernmentactionsLETS2021alsohighlightshowthegovernmentwillsupportthedeploymentoflowemissionstechnologies:investinginresearch,development,demonstrationandearly-stagecommercialisationinvestinginenablinginfrastructureenablingvoluntaryactionandinformingchoiceforconsumersandbusinesses.LETS2021prioritisesthefollowingactions.Solar303030Thisinitiativeaimsforsolarphotovoltaic(solar)toachieve30%efficiencyat30centsperinstalledwattby2030.LedbyARENA,theinitiativewillhelpdrivedowncoststomeetthestretchgoalforthenewlyprioritisedtechnology:ultralow-costsolar.Ultralow-costcleanelectricityisalsokeytomeetingthestretchgoalsforotherprioritytechnologies,includingcleanhydrogen,lowemissionssteelandaluminium,andelectricalenergyforstorageforfirming.AssessinginfrastructureneedsTheAustralianGovernmentisalreadyconductingaNationalHydrogenInfrastructureAssessment.Buildingonthis,acomplementaryassessmentofinfrastructureneedsforotherprioritytechnologieswillbeconducted.Thiswillincludeexploringwaystoreducecostsbylocatinghydrogen,energystorage,andCCSinfrastructurenearmanufacturerssuchassteelandaluminiumcompanies.GrowingAustralia’shydrogenindustryThegovernmentisinvesting$464millioninsevencleanhydrogenindustrialhubstoconcentratedemandforhydrogeninonegeographicregiontoreducecostsandshareinformation.Thesehubswillbringhydrogenproducers,usersandexporterstogether.Theywilllowerthecostofproduction,encourageinnovationandenhanceskillsandtrainingefforts.DevelopingavoluntaryzeroemissionsgasmarketThegovernmentwilldevelopavoluntaryzeroemissionsgasmarketinAustraliatoincreaseearlydemandforcleanhydrogenandotherzeroemissionsgasesandrecogniseconsumers’voluntarypurchaseofzeroemissionsgas.Thismarketwilldriveearlydemandforcleanhydrogenandotherzeroemissionsgases.13LOWEMISSIONSTECHNOLOGYSTATEMENT2021EnablinginfrastructureLETS2021introducesthecategoryofenablinginfrastructure–infrastructurethatwillhelpdeploypriority,emergingandprovenlowemissionstechnologiesatacommercialscale,andsupportconsumerchoice.Thegovernment’sfirstenablinginfrastructureprioritiesare:batterychargingandhydrogenrefuellingstationstosupportconsumerchoiceinelectricvehiclesadigitalgridwithenhancedmanagementsystemsandcapabilitiestosupportrapidgrowthinsolarandwindgeneration.EmergingtechnologiesLETS2021updatesthegovernment’slistofemergingtechnologies.Emergingtechnologiesarelowemissionstechnologiesthathavetransformativepotential,butrequirecontinuedmonitoringofgloballearningrates,researchandinvestmenttrends.LETS2021explores,indetail,twoemerginglowemissionstechnologiesthatshowpromiseforprioritisationinfuturestatementsandwillbesupportedbyearlyinvestments:livestockfeedsupplementstoreduceagriculturalmethaneemissionslowemissionscement.AcceleratingdeploymentofprioritylowemissionstechnologiesThegovernment’sambitionistoreducethecostsofprioritylowemissionstechnologiestomeettheeconomicstretchgoalsassoonaspossible.Fortheprioritytechnologies,LETS2021:identifiestechnologydeploymentpathwaysidentifiesopportunitiestoreducethecostofeachtechnologyestimateswheneachprioritytechnologywillmeettheeconomicstretchgoal.Australia’sresourceopportunityinanewenergyeconomyLETS2021exploresfutureglobaldemandfortheresourcesneededtodeploylowemissionstechnologiesatscale,manyofwhicharefoundhereinAustralia.Batteriesandotherstoragetechnologieswilldrivemostofthedemand,butAustraliacanalsosupplytheresourcesforsolarpanels,windturbines,invertersandelectricmotors.WelookatthepotentialtogrowAustralianindustriesaroundtheseresourcesanddownstreamprocessing.ImpactevaluationframeworkLETS2021introducesanimpactevaluationframeworkfortheTechnologyInvestmentRoadmap.TheframeworkincludesthemetricswewillusetotrackprogressthroughannualLowEmissionsTechnologyStatements.14LOWEMISSIONSTECHNOLOGYSTATEMENT202115LOWEMISSIONSTECHNOLOGYSTATEMENT2021IntroductionTheAustralianGovernment’sTechnologyInvestmentRoadmapisacomprehensiveandenduringinvestmentstrategy.Itwillacceleratethedevelopmentanddeploymentofnewandemerginglowemissionstechnologies.TheroadmapisthecornerstoneofAustralia’sLong-TermEmissionsReductionPlan.OurvisionAprosperousAustralia,recognisedasagloballowemissionstechnologyleader.Australia’sbigtechnologychallengesAustralia’stechnology-ledapproachtoemissionsreductionaddressesthetechnologychallengesandopportunitiesfacingthecountry.Theseare:deliveryoflow-cost,cleanandreliableenergytohouseholdsandindustryfortransportation,heating,lightingandproductionexpandingproductionandincreasingproductivity,creatingjobsandsubstantiallyreducingemissionsfromAustralia’sprimaryindustriespreservingandexpandingonshoremanufacturingofenergy‑intensiveproductsandcapturingnewexportmarketsforlowemissionscommoditiesscalinggeologicalandbiologicalsequestrationtoprovidegloballysignificantsequestrationofCO₂.OurapproachInMay2020,thegovernmentreleasedadiscussionpaperestablishingastrategyforatechnology‑ledapproachtoreduceemissions.Thisstrategy,knownastheTechnologyInvestmentRoadmap,setanenduringprocesstoacceleratethedevelopmentandcommercialisationofnewandemerginglowemissiontechnologiesby:surveyingnewandemerginglowemissionstechnologiesacrosstheeconomyidentifyingprioritytechnologiesthroughfourfilters:abatementpotential,Australia’scomparativeadvantage,scaleofeconomicbenefitandwheregovernmentactioncanmakethemostmeaningfulimpactsettingeconomicstretchgoalsforeachprioritytechnologytohelpachievecostparitywithexistinghighemissionstechnologiesidentifyingdeploymentpathwaysforprioritytechnologiesbalancingtheoverallinvestmentinlowemissionstechnologiesmeasuringtheimpactofinvestments.16LOWEMISSIONSTECHNOLOGYSTATEMENT2021Theroadmapaimstohelplowemissionstechnologiesachievecostparitywithexistinghighemissionstechnologies.Wepublishannuallowemissionstechnologystatementsundertheroadmap(Figure1).Thesestatementsprovidetheopportunitytoreviewandrefineprioritytechnologies,andthegovernment’sinvestmentapproach,todeliverthebesteconomicandemissionsreductionoutcomesforAustralia.LETS2020wasthefirstmilestoneundertheroadmap,identifyingAustralia’sbigtechnologyopportunities,introducingfiveinitialprioritylowemissionstechnologiesandarticulatingacomprehensiveinvestmentstrategy.LETS2021buildsonthefirststatement,prioritisinganadditionaltechnology,identifyingtechnologydeploymentpathways,committingtonewactionsandoutliningtheimportanceofenablinginfrastructuretoachieveourvisionasagloballowemissionstechnologyleader.Annualstatementsensureourinvestmentprioritiesandactionsadapttochangingtechnologyandmarketdevelopments.Eachannualstatementfocusesonkeypartsoftheroadmapprocesstoefficientlyandtransparentlyreportonprogresstowardsourvision.Proventechnologieslikecoal,gas,andwindelectricity,wheredeploymentisalreadybeingdrivenbytheprivatesector,arenotthefocusoftheroadmap,butthegovernmentmayinvestwheretherearemarketfailures.Figure1:LowEmissionsTechnologyStatementsundertheenduringstrategyoftheTechnologyInvestmentRoadmapTECHNOLOGYINVESTMENTROADMAPAnenduringprocessforlowemissionstechnologyinvestments.Annuallowemissionstechnologystatementsreview,refineandevaluateinvestmentsTheroadmapisthecornerstoneofAustralia’sLong-TermEmissionsReductionPlan.203020292028202720262025202420232022LowEmissionsTechnologyStatement2020EstablishedprioritisationfilterstoassesslowemissionstechnologiesIdentifiedthefirstfiveprioritytechnologiesArticulatedacomprehensiveinvestmentframeworkLowEmissionsTechnologyStatement2021Introducesultralow-costsolarasanadditionalprioritytechnologyandstretchgoalReviewsandrefinesgovernmentactionsanddeploymentpathwaysforprioritytechnologiesIntroducesenablinginfrastructureasanewcategorytosupportpriorityandemergingtechnologies2021202017LOWEMISSIONSTECHNOLOGYSTATEMENT2021TechnologycategoriesLETS2021introducesanewtechnologycategory,enablinginfrastructure.WehavealsorefinedtheemergingtechnologiescategoryfromLETS2020andmergeditwith‘watchingbrief’technologies(Figure2).Figure2:TechnologycategoriesundertheTechnologyInvestmentRoadmapPrioritytechnologiesTechnologieswithpotentialfortransformativeeconomicandabatementimpacts,alignedwithAustralia’scomparativeadvantages,andwherethegovernmentcanmakeadifference.EnablinginfrastructureInfrastructurethatiscriticalforenablingcommercialdeploymentoflowemissionstechnologies.Thegovernment’sfirstenablinginfrastructureprioritiesarebatterychargingandhydrogenrefuellingstationstosupportconsumerchoiceinelectricvehicles,andadigitalgridwithenhancedmanagementsystemsandcapabilities,tosupportrapidgrowthinsolarandwindgeneration.EmergingtechnologiesEmergingtechnologieshavetransformativepotential,butrequirecontinuedmonitoringofgloballearningrates,researchandinvestmenttrends.LETS2021updatesthegovernment’slistofemergingtechnologies.Livestockfeedsupplementsandlowemissionscementaretwoemerginglowemissionstechnologiesthatshowpromiseforprioritisationinfuturestatementsandwillbesupportedbyearlyinvestments.PrioritylowemissionstechnologiesandeconomicstretchgoalsWeprioritiselowemissionstechnologiesbyassessingthemagainstfourfilters:Abatementpotential.Howbigarethepotentialemissionsreductionsfromthistechnology?Economicbenefit.WhatarethepotentialeconomicbenefitsforAustraliaofdeployingthistechnologyatalargescale?Benefitsincludecreatingandpreservingjobs,especiallyinregionalareas.Australia’scomparativeadvantage.DoesthistechnologyplaytoAustralia’sstrengths?Ourstrengthsincludeabundantenergyandmineralresources,skilledworkers,stronginstitutionsandtrustedtradingrelationshipswithmajorenergyconsumers.Wheregovernmentcanmakeadifference.2Willgovernmentinvestmenthelpdevelopanddeploythistechnology?Thisincludeswhethergovernmentactionwillhelpacceleratecostreductions.2Thiswaspreviouslycalled‘TechnologyReadinessLevel’18LOWEMISSIONSTECHNOLOGYSTATEMENT2021Wealsosetaneconomicstretchgoalforeachtechnology(Figure3).Theseambitious,butrealistic,goalsaimtobringprioritylowemissionstechnologiestocostparitywithexistinghighemissionstechnologies.Economicstretchgoalsalsosignaltoprivateinvestorsthatprioritylowemissionstechnologiesareoflong-termstrategicimportancetothegovernment.Anewlyprioritisedtechnology:ultralow-costsolarThisyear’sstatementaddsultralow-costsolarasaprioritytechnology.ThisisbasedonAustralia’scomparativeadvantageinsolartechnologyandtheneedtoacceleratecostreductionsincleanelectricitygeneration.Ultralow-costsolarwillunlocktheeconomic,employmentandabatementpotentialofcleanhydrogen,lowemissionssteelandaluminium,andelectricalenergyforstorageforfirming.Ultralow-costsolarwillalsoreducecostsforelectrificationofothersectorssuchastransport,buildingsandindustry.DrivingthepriceofcleanelectricitylowerwillhelpAustralianindustry,manufacturersandotherbusinessesstayinternationallycompetitivewhilereducingemissionsandsupportingthewidereconomy.Wehavesetaneconomicstretchgoalforultralow-costsolarelectricitygenerationat$15perMWh,orapproximatelyathirdoftoday’scosts.Figure3:PrioritylowemissionstechnologiesandtheireconomicstretchgoalsENERGYSTORAGEElectricityfromstorageforﬁrmingunder$100perMWhPRIORITYTECHNOLOGIESandtheireconomicstretchgoalsCLEANHYDROGENProductionunder$2perkilogramLOWEMISSIONSMATERIALSLowemissionssteelproductionunder$700pertonneandlowemissionsaluminiumproductionunder$2,200pertonneCARBONCAPTUREANDSTORAGECOcompression,hubtransportandstorageunder$20pertonneofCOSOILCARBONMeasurementunder$3perhectareperyearULTRALOW-COSTSOLARSolarelectricitygenerationat$15perMWhPrioritytechnologiesandtheireconomicstretchgoals19LOWEMISSIONSTECHNOLOGYSTATEMENT2021TrackingprogressOurtechnology-ledapproachisenduring,iterativeandadaptive.WereportourprogresseveryyearthroughannualLowEmissionsTechnologyStatements.Thisensuresourinvestmentsare:loweringthecostofprioritytechnologiesattractingco-investmentfromothershelpingaddressAustralia’sbigtechnologychallenges.Wehavedevelopedanimpactevaluationframeworktotrackprogress,informgovernmentdecisionsandmaximiseinvestmentimpacts.Theframeworktracksprogressinthreeareas:Enablingpolicyandinvestments–policiesandinvestmentsthathelpdevelopanddeploylowemissionstechnologies.Co-investmentandemploymentoutcomes–co-investmentingovernment-fundedprojectsfromtheprivatesectorandotherjurisdictions,aswellasjobssupported.Othertechnology,economicandabatementimpacts–impactsthegovernmentaimstoinfluence,butalsoinfluencedbyexternalfactors.Theseinclude:–technologydeploymentandcosts–exportssupportedbyprioritytechnologies–emissionsreductions.20LOWEMISSIONSTECHNOLOGYSTATEMENT2021OurstrategyReduceemissionsandgrowtheeconomyAustraliaisalreadyreducingemissionswhilegrowingoureconomy.Theroadmapwillbuildonthismomentumandcapturenewopportunities.Ourtechnology‑ledapproachwill:buildonourglobalreputationasatrustedexporterofenergy,resourcesandagriculturalproductssupportjobsandtakeadvantageofgrowthopportunitiesastheworldshiftstowardsloweremissionspowerthedomesticeconomywithcheap,cleanandreliableenergy.Theroadmapwillguideatleast$20billionofAustralianGovernmentinvestmentinlowemissionstechnologiesoverthedecadeto2030.Weexpecttodriveover$60billioninco-investment,whichwillresultinatleast$80billiontotalpublicandprivateinvestment,andsupport160,000jobs.DrivedowncostsAustralia’stechnology-ledapproachaimstohelpnewandemerginglowemissionstechnologiesachievecostparitywithexistinghighemissionstechnologies.Whenalternativelowemissionstechnologiescancompetewithexistingtechnologiesonprice,theywillbeadoptedatlargescaleacrosstheeconomy,significantlyreducingemissionswithoutadditionalcosts.Historyhasshownthenon-linearrelationshipbetweentechnologycostsanddeployment.Ourexperiencewithgloballysignificanttechnologiesliketransistorsandsolardemonstrateshowfallingcostsandaconcertedinnovationeffortcancatalyseanexponentialincreaseindeployment(Figure4).Achievingrapiddeploymentgrowthfortheprioritytechnologiesistheultimategoaloftheroadmap.Ittookuntil2002fortheworlddeployitsfirstgigawattofsolargeneration.Adecadelater,100gigawattshadbeendeployed.Bytheendof2022,weexpect1,000gigawattstobedeployed.Thismeansthat90%ofallsolardeploymenthasoccurredinthelast10years,asthecostofsolarcellshasfallendramatically.21LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure4:DecliningcostoftechnologycancatalysewidespreaddeploymentWorkwithstategovernments,theprivatesectorandothercountriesWidespreaddeploymentoflowemissionstechnologieswillmainlybedrivenbytheprivatesector.Theroadmapaimstoattractanaverageof$3ormoreco-investmentforevery$1ofAustralianGovernmentinvestmentinthedecadeto2030.Thegovernmentisworkingwiththeprivatesectortoachievethisgoal.StatedealsarebilateralenergyandemissionsreductionagreementsthatprovideaclearwayfortheAustralianGovernment,stateandterritorygovernmentsandindustrytoengage.Theycovermutualpriorities,includinglowemissionstechnologies,andcanmaximisegovernmentandprivateco-investment.Australiaisalsoworkingcloselywithothercountriestodevelopanddeploylowemissionstechnologies,includingthroughbilateralpartnerships.This:letsusshareexpertisewithothernationssupportsinnovationthatmakeslowemissionstechnologiescheaperhelpsattractinvestment.LOWEMISSIONSTECHNOLOGYSTATEMENT202122In2020,thePrimeMinisterappointedDrAlanFinkel,Australia’sformerChiefScientist,asSpecialAdvisertotheAustralianGovernmentonLowEmissionsTechnology.DrFinkelisbrokeringinternationalpartnershipsonlowemissiontechnologies.AustraliahasalreadyannouncedpartnershipswithGermany,Japan,theRepublicofKorea,SingaporeandtheUnitedKingdom.Expandinginternationalcollaborationwillcreatenewtradeandeconomicopportunities.Itwillacceleratethedevelopmentandexpansionofinternationalsupplychainsforlowemissionstechnologiesandenergy,includingcleanhydrogenanditsderivatives.Australia’sinternationalpartnershipswilldeliverindustry-ledprojectstoreducecostsanddeploylowemissionstechnologies.ThesewillexpandlowemissionsindustriesandhelpAustraliabecomealeadingexporteroflowemissionstechnologyandenergy.Australiaisalsoengagedinmultilateralforumstoacceleratethedeploymentoflowemissionstechnologies.ThisincludesMissionInnovationwhereAustraliahasgonefromparticipatingineveryinnovationchallengetoco-leadingthenewCleanHydrogenMissionandtheNetZeroIndustryDemonstrationMission.FifteenmembercountrieshavecommittedtotheCleanHydrogenMission’sgoaltomakecleanhydrogencommerciallyviablebyreducingthecostofproductionanddelivery.TheIndustryMissionwillfostercollaborationtoseepilotsandlargescaledemonstrationsoflowemissionsheavyindustrytechnology.Partofawhole-of-governmentstrategyTheroadmapformsthecornerstoneofAustralia’sLong-TermEmissionsReductionPlan.TheroadmapcomplementsanddrawsonotherAustralianGovernmentpoliciesandstrategies,including:AustralianEnergyMarketOperator(AEMO)IntegratedSystemPlanCriticalMineralsStrategyEmissionsReductionFundFutureFuelsStrategy(forthcoming)GlobalResourcesStrategyModernManufacturingStrategyNationalEnergyProductivityPlanNationalHydrogenStrategyNationalSoilStrategyNationalWastePolicyandActionPlanPost-2025EnergyMarketReformsConsultationandcollaborationPartnershipwiththeprivateandresearchsectorsisvitaltoachievingourvision.Thegovernmenthasundertakenpublicandtargetedconsultationtoinformthedevelopmentandimplementationoftheroadmap.Publicconsultationfortheroadmapdiscussionpaperin2020receivedaround500writtensubmissions.Over150businesses,researchers,communityorganisationsandassociationsparticipatedintargetedindustryworkshops,ledbyDrAlanFinkel,andmorethan400peopleattendedanonlinewebinar.23LOWEMISSIONSTECHNOLOGYSTATEMENT2021Thisconsultation,alongwithone-on-oneindustry,academiaandcross-governmentengagement,informedthedevelopmentofLETS2020.ConsultationhascontinuedforLETS2021withtargetedindustryconsultationandnewengagementwithourinternationalpartners.Ongoingconsultationandcollaborationiskey.Achievingourvisionisnotpossiblewithoutrepeatedandmeaningfulengagement.FollowingthereleaseofLETS2021,thegovernmentwillundertakepublicandtargetedconsultationtoinformthedevelopmentofLETS2022.TechnologyInvestmentAdvisoryCouncilTheTechnologyInvestmentAdvisoryCounciladvisestheMinisterforIndustry,EnergyandEmissionsReductioninpreparingannuallowemissionstechnologystatements.Thecouncilismadeupofleadersfromscience,business,technologyandgovernment.TechnologyInvestmentAdvisoryCouncilDrAlanFinkelAO,ChairSpecialAdvisertotheAustralianGovernmentonLowEmissionsTechnologyDrewClarkeAOPSMChairoftheAustralianEnergyMarketOperatorandCSIROBoardMemberJoEvansDeputySecretaryattheDepartmentofIndustry,Science,EnergyandResourcesGrantKingChairoftheClimateChangeAuthorityDavidParkerAMChairoftheCleanEnergyRegulatorJustinPunchChairoftheAustralianRenewableEnergyAgencyBoardStevenSkalaAOChairoftheCleanEnergyFinanceCorporationBoardAlisonWatkinsNon-ExecutiveDirectoroftheReserveBankofAustraliaandChancelloroftheUniversityofTasmaniaShemaraWikramanayakeCEOofMacquarieGroupBenWilsonCEOofAustralianGasInfrastructureGroupandChairofEnergyNetworksAustralia24LOWEMISSIONSTECHNOLOGYSTATEMENT2021AustralianGovernmentinvestmentBuildingon$21billioninvestmentoverthelasttwodecadesNewgovernmentfundingannouncedforLETS2021,including:$1.7B$464MCleanhydrogenindustrialhubs$73MSoilcarbonandlivestockfeedsupplements$250MCCUShubsandtechnologies$565MInternationalpartnershipsThisincludes$54millionfrompreviousfundingannouncementsAddingtothe$1.9billionannouncedforLETS2020Co-investmentleveragedCo-investmentleveragedbygovernmentinvestmentsinthefinancialyearending30June2021$4.6BEstimatedinvestmentinrenewableenergyinAustraliain2020$9.7BthroughagenciesincludingtheARC,ARENA,theCEFC,theCER,CSIRO,DISERandNAIFinthefinancialyearending30June2021$2.5BGovernmentinvestmentcommittedtoprojectsThisincludes$1.1BinvestedinprioritytechnologiesmoreAustralianGovernmentinvestmentinlowemissionstechnologiesinthedecadeto2030,drivingmorethan$80billionoftotalpublicandprivateinvestmentandsupporting160,000jobs$20BAtleastNote:Theabovecontentreflectsyear-to-datedataforthefinancialyearended30June2021availablefromselectedgovernmentagenciesatthetimethestatementwasprepared.Wewillpublishupdatedfiguresfortotalinvestmentastheybecomeavailable.EstimatedrenewableenergyinvestmentdatafromCleanEnergyRegulator2021,QuarterlyCarbonMarketsReport–DecemberQuarter,accessed1September202125LOWEMISSIONSTECHNOLOGYSTATEMENT2021HydrogenMurrayValleyHydrogenParkAGIGARENAhasgivenconditionalapprovalfora$32milliongranttobuildacommercialscale10megawattelectrolysertoproducecleanhydrogeninWodonga,Victoria.Thiswillbeamongstthelargestintheworld.Underthisproject,10%hydrogenwillbeblendedintoexistinggaspipelinessupplying40,000homesandbusinesses,akeysteptowardsdecarbonisingAustralia’sgasnetworks.Thisisoneofthreeprojectsconditionallyapprovedfor$103.3millionintotalunderARENA’sRenewableHydrogenDeploymentFundingRound.AluminiumLowEmissionsAluminaAlcoa&RioTintoARENAprovidedan$11milliongranttoAlcoatotrialelectrificationofsteamproductionforprocessheatatitsWagerupaluminarefineryinWesternAustralia.ARENAalsoprovideda$579,000granttoRioTintotoassesstheviabilityofhydrogencalcinationatitsYarwunaluminarefineryinGladstone,Queensland.Bothprojectswillhelpdecarbonisealumina,Australia’ssixthlargestexport.CCSCarbonCapture,Use&Storage(CCUS)DevelopmentFundInLETS2020,thegovernmentsignalleditsintentiontoinvestinsupportingthecommercialisationofCCStechnologies.UndertheCCUSDevelopmentFund,$50millionwasawardedtosixbusinessestopilot,demonstrateandsupportthecommercialdeploymentofCCUStechnologies.Theseincludedirectaircaptureandremoval,captureandgeologicalstoragefrompowerplantoperations,andcaptureanduseofCO₂intheproductionofconstructionmaterials.LivestocksupplementsProgramstoreducelivestockemissionsThe$6millionMethaneEmissionsReductioninLivestockprogramsupportsresearchintotheabatementpotentialandproductivitybenefitsoflivestockfeedsupplements.The$23millionLowEmissionsSupplementstoGrazingAnimalsatScaleprogramwillhelpdeveloptechnologiestodeliverlowemissionsfeedtograzinganimals.$1millionwasalsograntedtocommerciallyproduceseaweedforlowemissionsfeed.Projectexamples26LOWEMISSIONSTECHNOLOGYSTATEMENT2021InternationalpartnershipsBuildingoncommitmentsinLETS2020,in2021theAustralianGovernmentannounced$565.8milliontoestablishinternationalpartnershipsonlowemissionstechnology.Internationalpartnershipsarekeytofindinganddevelopingthesolutionstotheworld’sclimatechallengesandreducingemissionswhilecreatingneweconomicopportunities.AustraliahasalreadyannouncedpartnershipswithGermany,Japan,theRepublicofKorea,SingaporeandtheUnitedKingdom.Thepartnershipswillfostergreatercooperationonlowemissionstechnologies.Theywillunderpinthedevelopmentofnewtechnologiesleadingtoemissionsreductions,jobcreation,lowerenergycosts,newtradeopportunitiesandgreaterinvestmentinAustralia.Internationalpartnershipswillbedeliveredthrougharangeofmechanisms,includingco-fundingappliedresearch,pilotanddemonstrationprojects,establishingsupplychains,exchangingexpertise,andbuildingindustryconnections.ProjectsandinitiativesundertheinternationalpartnershipswillcomplementeffortsacrossAustraliatoadvancelowemissionstechnologies.ThisincludestheworkofARENA,CEFC,CSIRO,stateandterritorygovernments,andprivatebusinesses.InternationalpartnershipswillbuildontheworkalreadybeingdonebytheAustralianGovernmenttoestablishsupplychainstocatalysedevelopmentofaworld‑leadinghydrogenexportindustry.Internationalpartnershipswillhelpachieve:GreaterinvestmentAdvancesinlowemissionstechnologiesEmissionsreductionJobcreationCheaperenergyExportopportunitiesExpertiseexchange27LOWEMISSIONSTECHNOLOGYSTATEMENT2021SingaporeLowEmissionsMaritimeInitiative$30millionco-investmentfromAustralia,Singaporeandindustryforpilotanddemonstrationprojectstotrialtheuseoflowemissionstechnologies,includingcleanhydrogenandammonia,inshippingandportoperations.ThisbuildsonanexistingMOUonlowemissionstechnologies.GermanyAustralia-GermanyHydrogenAccordHyGATEProgram,withcombinedinvestmentofapproximately$130millionforRD&Dprojectsalongthehydrogensupplychain.FacilitatingindustrypartnershipsondemonstrationprojectsinAustralianhydrogenhubsExploringopportunitiestosupplyhydrogenanditsderivativestoGermanyJapanLowEmissionsTechnologyPartnershipPartnershiptosupporttechnologies,including:cleanhydrogenandammonia;carboncapture,useandstorage;loweremissionsLNG;andlowemissionssteelandironore.StartofoperationsforHydrogenEnergySupplyChainproject,toproduceandexportliquefiedcleanhydrogentoKobe,Japan.UnitedKingdomAustralia–UKPartnershiponLowEmissionsSolutionsCooperationonresearchanddevelopmentacrosssixkeytechnologiesincludingcleanhydrogen;carboncaptureanduseandstorage;smallmodularreactorsincludingadvancednucleardesignsandenablingtechnologies;lowemissionsmaterialsincludinggreensteel;andsoilcarbonmeasurement.Asafirstinitiative,wewilldevelopajointindustrychallengetoincreasethecompetitivenessofindustry,reduceemissionsandsupporteconomicgrowth.RepublicofKoreaAustralia-RepublicofKoreaLowandZeroEmissionsTechnologyPartnershipCollaborationonlowandzeroemissionstechnologies,including:cleanhydrogenandcleanammonia;lowemissionsironoreandsteel;hydrogenfuelcellelectricvehicles;hydrogenpowergeneration;carboncapture,utilizationandstorage;energystorage;solar;andthecriticalmineralssupplychain.ResearchonhydrogensupplychainsbetweenKoreanandAustraliancompanies.Lowemissionssteelandironoreinitiativetoreduceemissionsacrossthesupplychain.28LOWEMISSIONSTECHNOLOGYSTATEMENT202129LOWEMISSIONSTECHNOLOGYSTATEMENT2021GovernmentactionsTheAustralianGovernment’stechnology-ledapproachwillreduceemissionswithoutimposingnewcostsonhouseholds,businessesortheeconomy.Theprivatesectorwillleadthedeploymentoflowemissionstechnologies.Thegovernment’sroleistoremovebarrierstodeploymentandincentivisevoluntaryactionandprivateinvestmentinprioritylowemissionstechnologiesby:investinginresearch,development,demonstrationandearly-stagecommercialisationinvestinginenablinginfrastructurefacilitatingvoluntaryactionandinformingchoiceforconsumersandbusinesses.Thegovernmenthascommittedtoinvestatleast$20billioninlowemissionstechnologiesby2030,todriveover$80billionoftotalpublicandprivateinvestmentoverthedecade.Thisinvestmentwillsupport160,000jobsacrossAustralia.Thisbuildsonthe$21billionofinvestmentinlowemissionstechnologiesmadebythegovernmentoverthelasttwodecades.TheTechnologyInvestmentRoadmap,bolsteredbyannuallowemissionstechnologystatements,providesacomprehensiveinvestmentstrategytoguidegovernmentinvestmentinlowemissionstechnologies.Thegovernmentannounced$1.9billioninfundingalongsideLETS2020.SincethereleaseofLETS2020,thegovernmenthasannouncedafurther$1.7billioninfundingtosupportLETS2021initiativesandtheroadmap.30LOWEMISSIONSTECHNOLOGYSTATEMENT2021InvestingintheresearchtocommercialisationpipelineSupportingresearch,development,demonstrationandearly-stagecommercialisationthroughcoinvestmentisthemainfocusoftheTechnologyInvestmentRoadmap(Figure5).Figure5:AustralianGovernmentinvestmentacrossthetechnologydevelopmentprocessAppliedR&DEarly-stageR&DMarketdemonstrationDeploymentandcommercialisationMarketgrowthDiusionARENACEFCCERAustralianResearchCouncilCooperativeResearchCentresCSIROModernManufacturingInitiativeAustralianRenewableEnergyAgencyTheAustralianRenewableEnergyAgency(ARENA)supportsinnovationandcommercialisationofrenewableenergyandlowemissiontechnologies.Itbridgesthegapbetweeninnovationandinvestmenttohelpemergingandearly-stagetechnologiesbecomecommerciallyviable.In2020,ARENA’sfundingwasextended,providingitwithanadditional$1.4billionofbaselinefundingoverthenext10years,andafurther$193milliontodeploytargetedprogramsassociatedwithtransport,industrialenergyefficiency,andregionalmicrogrids.Thisyear,thegovernmentexpandedtheroleofARENA,enablingittosupportalloftheprioritytechnologiessetoutinLETS2020.ARENAwillplayanimportantroleinstimulatinginvestmentintheprioritytechnologiesandreducingtheircostofdeployment.Sincetheroadmapwasreleasedin2020,ARENAhasprovidedfundingtosupportseveralprioritylowemissionstechnologies,includinghydrogen,energystorageandlowemissionsmaterials.Thisincludes$103millionconditionallyapprovedforthreecommercial-scalerenewablehydrogenprojectsthroughARENA’sRenewableHydrogenDeploymentFundingRound.Thesearesomeofthelargestcleanhydrogenprojectsintheworld.CleanEnergyFinanceCorporationTheCleanEnergyFinanceCorporation(CEFC)playsauniqueroleintheAustralianeconomy,workingwiththeprivatesectortodemonstratethefinancialviabilityofnear-commerciallowemissionstechnologiesandthebankabilityofnewrevenuestreams.31LOWEMISSIONSTECHNOLOGYSTATEMENT2021TheCEFCtakesacommercialapproach,providingtailoreddebtfinanceandequitytobusinessesandprojectsthat:deployprovenlowemissiontechnologiesdevelopandcommercialiseearly-stageandlate-stagecleanenergytechnologies.Sincetheroadmapwasreleased,theCEFChas:incorporatedtheroadmapintoitsfour-yearcorporateplancontinuedtoinvestinenergystoragemadeitsfirstinvestmentsinhydrogen,soilcarbonsequestrationandelectricaltransmissioninfrastructuresupportedearly-stagetechnologydevelopmentbyinvestinginstart-upcompanies.ThegovernmentandCEFCwillcontinuetoinvestigatehowtheCEFCcanfurthersupportprioritylowemissionstechnologies.CleanEnergyRegulatorTheCleanEnergyRegulator(CER)administersAustralianGovernmentschemesformeasuring,managing,reducingandoffsettingAustralia’sgreenhousegasemissions.TheseincludetheEmissionsReductionFund(ERF)andSafeguardMechanism,theRenewableEnergyTarget,theNationalGreenhouseandEnergyReportingSchemeandtheAustralianNationalRegistryofEmissionsUnits.SinceLETS2020,theCERhasdevelopedanewERFmethodtosupportCCS.TheCERisalsodevelopingcertificationframeworksandplatformstogiveconfidencetoinvestorsandconsumersasnewtechnologiesandindustriesevolve.TheseincludetheGuaranteeofOriginSchemeforHydrogen,incollaborationwiththeDepartmentofIndustry,Science,EnergyandResources,andtheAustralianCarbonExchange.AustralianResearchCouncilTheAustralianResearchCouncil(ARC)expandsknowledgeandinnovationforthebenefitoftheAustraliancommunitybyfundingthehighestqualityresearch,assessingthequality,engagementandimpactofresearch,andprovidingadviceonresearchmatters.TheARCadministersanaverageof$800millioningrantseveryyear.Grantsareawardedtoindividuals,researchteamsandlarge-scalecentresthroughtheARC’sDiscoveryProgramandLinkageProgram.DiscoveryProgramTheARC’sDiscoveryProgramsupportsindividualsandsmallteams.Itrecognisestheimportanceoffundamentalresearchtonationalinnovation.StrongfundamentalresearchcapabilitiesareessentialforAustraliatoplayaleadingroleindevelopingnewandemerginglowemissionstechnologies.LinkageProgramTheARC’sLinkageProgramsupportsnationalandinternationalpartnershipsbetweenresearchersandbusiness,industry,communityorganisationsandotherpubliclyfundedresearchagencies.Thesepartnershipshelptransferskills,knowledgeandideastosecurecommercialandotherbenefits.32LOWEMISSIONSTECHNOLOGYSTATEMENT2021LinkageProgramfundingalreadysupportslowemissionstechnologiesthroughtheIndustrialTransformationProgram.Thisprogramfundsresearchhubsandtrainingcentresincludingresearchonlowemissionstechnologiessuchassteelinnovationandenergystorage.TheLinkageProgramprovided$35millionfortheARCCentreofExcellenceforEnablingEco‑EfficientBeneficiationofMinerals.Thecentrewillworkwithacademic,industryandgovernmentpartnerstodeveloptransformationaltechnologiesformineralsbeneficiation.Thesetechnologiesareessentialformeetingglobaldemandformetals.CommonwealthScientificandIndustrialResearchOrganisationTheCommonwealthScientificandIndustrialResearchOrganisation(CSIRO)workswithuniversities,researchinstitutesandindustrytodeveloptechnologiesandsupportcommercialuptakeacrossmanyareasoftheeconomy,includinglowemissiontechnologies.CSIRO’srelevantresearchareasincludecleanhydrogenproduction,energystorage,industrialdecarbonisationandagriculturalemissionreduction.CSIROhasalsoestablishedamission-drivenmultidisciplinaryscienceandresearchprogramtodrivemajordemonstrationandinvestmentactivitiesinareasofhighimportancetoAustralia.CSIRO’smissionsinclude:theHydrogenIndustryMission,whichaimstodemonstratecommercialuptakepathwaysforcleanhydrogenproductionandend-usemarkets.theTowardsNetZeroMission,whichwillfocusontechnologyuptakepathwaystoachievelowemissionoutcomesforAustralianindustry,agricultureandregionalcommunities.theplannedCriticalEnergyMetalsMission,whichwillaimtoincreaseeconomicvaluefromtheenergytransitionbytransformingourmineralresourcesintohigher-valueproductsandcreatingnewmanufacturingjobsandexport-readytechnologies.33LOWEMISSIONSTECHNOLOGYSTATEMENT2021CooperativeResearchCentresThegovernmentsupportsindustry-ledcollaborativeresearchthroughgrantsundertheCooperativeResearchCentres(CRC)Program.CRCshaveestablishedprojectsinareasofcompetitivestrengththatalignwithgovernmentpriorities,includingdevelopinganddeployingprioritylowemissionstechnologies:TheHeavyIndustryLow-carbonTransition(HILT)CRCwillreceive$39millioninAustralianGovernmentgrantfundingover10yearstodevelopAustralia’sheavyindustriesandde-riskthetechnologypathwaysforaprofitabletransitiontointernationally-competitiveproductionoflow-carbonproducts.Partnerswillcontributeafurther$176milliontotheCRC.TheFutureFuelsCRCwillreceive$26millioninAustralianGovernmentgrantfundingoversevenyearstohelpadaptgaspipelinesandstoragesystemstooperateinalow-carboneconomyusingfuelssuchashydrogenandbiogas.Partnerswillcontributeafurther$64milliontotheCRC.TheReliableAffordableCleanEnergy(RACE)for2030CRCwillreceive$69millioninAustralianGovernmentgrantfundingover10yearstoreducecoststobusiness,enhancereliability,cutcarbonemissions,improveenergyaffordabilityanddevelopAustralianenergytechnologybusinesses.Partnerswillcontributeafurther$279milliontotheCRC.ThegovernmentwillcontinueengagingwithCRCsonindustry-ledresearchintolowemissionstechnologiesandenablinginfrastructure.34LOWEMISSIONSTECHNOLOGYSTATEMENT2021ModernManufacturingInitiativeThe$1.3billionModernManufacturingInitiative(MMI)supportsprojectsfrommarketdemonstrationthroughtocommercialscale-up.Thisincludestranslatinghigh-qualityresearchintomarketableproducts,integratingintermediateproductsintonewdomesticandglobalvaluechains,enteringnewmarketsandcreatingtransformationalbusiness-to-businessandbusiness‑to-researchcollaborations.TheRecyclingandCleanEnergyNationalManufacturingPriorityroadmapishelpingtoguideindustryengagementandco-investmentundertheMMI.IthighlightsmanufacturingopportunitiesforAustraliainhydrogentechnologies,batteries,next-generationphotovoltaicmodules,andlowemissionsmetals,amongotherproducts.SupportingAustralianmanufacturerstopursuecompetitive,high-valuemanufacturingopportunitiesintheseareasbuildsonandextendsthegovernment’sbroadersupportforlowemissionstechnologies.InvestinginenablinginfrastructureThegovernmentissupportingsharedinfrastructuretofacilitatethevoluntaryandcommercially‑drivenuptakeoflowemissionstechnologies.ThisincludessupportforseveraltransmissionprojectsidentifiedbyAEMO’sIntegratedSystemPlantofulfilNationalElectricityMarketcost,securityandreliabilityexpectations.Upto$250millionhasbeencommittedforearlyworkstoprogressthreeimportantnewtransmissionlines:MarinusLinkbetweenTasmaniaandVictoriaProjectEnergyConnectbetweenSouthAustraliaandNewSouthWalesVictoriatoNewSouthWalesInterconnectorWest.3EnablinginfrastructureLETS2021introducesthecategoryof‘enablinginfrastructure’–infrastructurethatis:fundamentaltoalowemissionseconomyneededforAustraliatodeploypriority,emergingandprovenlowemissionstechnologiesatalargescale.Enablinginfrastructuremustbeavailableattherighttimetosupportcommercialinvestment,helpdeliverlow-costenergyandgiveconsumersmorechoiceinlowemissionstechnologies.Thegovernment’sfirstenablinginfrastructureprioritiesare:batterychargingandhydrogenrefuellingstationstosupportconsumerchoiceinelectricvehiclesadigitalgridwithenhancedmanagementsystemsandcapabilitiestosupportrapidgrowthinsolarandwindgeneration.3Thisisinadditiontoa$56milliongranttosupportMarinusLinkin2019.ItalsofollowsajointcommitmentbetweentheAustralianandNewSouthWalesgovernmentsin2020tounderwriteupto$66millionand$102millioninearlyworksfortheHumeLinkandQueensland-NewSouthWalesinterconnector(QNI)upgradetransmissionprojects.35LOWEMISSIONSTECHNOLOGYSTATEMENT2021ElectricvehiclechargingandrefuellinginfrastructureBatteryelectricvehicles(BEVs)andfuel-cellelectricvehicles(FCEVs)willbecomepricecompetitiveoverthenextfivetotenyearsastheworld’slargestvehiclemanufacturersincreasinglycommittotheirdevelopment.InvestmentisrequiredtoprepareforarapidincreaseinthenumberofconsumerschoosingBEVsandFCEVs,andtoensureenoughchargingandrefuellingstationsaremadeavailabletomeetdemand.Thegovernmentissupportingtherolloutofbatterychargingandhydrogenrefuellingstationsthroughthe$71.9millionFutureFuelsFund.Thegovernment’sfirstroundoftheFutureFuelsFund,administeredbyARENA,hasprovided$24.5millionoffundingtofiveapplicantsacross19projects.These19projectswilldeliver403newfastchargingstations,eachcapableofchargingatleasttwovehiclesconcurrentlyat50kWorgreater.4,5IntegrationofbatterychargingandhydrogenrefuellingstationsintoAustralia’senergynetworksneedstobewellplannedandmanagedtoensurethenetworkoperatesefficiently.Goodplanningandmanagement,facilitatedbyelectricitymarketandnetworkreforms,willhelprealiseopportunitiessuchasshiftingdemandtotakeadvantageofperiodsofexcess,low-costsupply.Thiswillalsolowercostsforconsumersbysharingthecostoftheelectricitynetwork,whiledeliveringbroaderbenefitsincludingemissionsreduction,fuelsecurityandimprovedairquality.Inaddition,thegovernmentwillinvestigatesupportforsmartchargingtechnologytobringforwardthebestoutcomesforBEVmotoristsandtheelectricitygrid.Well-integratedBEVchargingwillimprovesystemsecurityandreliability,reducecostsforBEVownersanddelivervaluetoallotherenergyconsumersthroughbetterutilisationoftheelectricitytransmissionanddistributionsystems.DigitalgridAustralianeedstosupportanelectricitysystemincreasinglypoweredbyvariablerenewablegenerationinordertodeliverlow-cost,cleanandreliableelectricity.Australiaisalreadyworldleadinginthisregard,withthehighestsolarcapacityperpersonintheworldandthehighestcombinedwindandsolarcapacityofanycountryoutsideEurope.6AnenhancedoperatingsystemisrequiredfortheAustralianElectricityMarketOperator(AEMO),togetherwithmarketparticipantssuchasgenerators,networksandpolicymakers,tocontinuetomanagetheelectricitygridinawaythatiseffective,efficient,secureandreliable.Thegovernmentissupportinganinitialinvestmentof$13million,throughmorethan$2millionfromARENA,tohelpAEMOdevelopthisoperatingsystem.ThegovernmentwillcontinuetobuildonexistingworkbyAEMOtosupporttheongoingexpansionofanenhancedoperatingsystem,toensureafullsuiteofdigitalcapabilitiesneededtomanagehighpenetrationofvariablerenewablesovertime.Investmentinadigitalgridthatcomplementstheelectricitymarket’sIntegratedSystemPlanandpost-2025reformswillallowAustraliatofullybenefitfromtheemissionsreductionsofferedbytherenewablesrevolution.4ABEVwitha75kilowatt-hour(kWh)batterytakesapproximately30hourstochargefromemptytofullona2.4kWdomesticslowcharger,1.5hoursona50kWfastcharger,andjust15minutesona350kWfastcharger.Inpracticeittakeslonger,becausethepowerisprogressivelycutbackduringchargingtopreventthebatteryfromoverheating.5ToensuremaximumconvenienceforAustraliandrivers,carewillbetakentoensurethatfundedfastchargingstationsarefittedwiththeType2ACplugthatisnowstandardonallnewAustralianBEVsandthatallBEVmodelsaresupported.6InternationalRenewableEnergyAgency2021,RenewableCapacityStatistics2021,accessed5August2021BuildingontheNationalHydrogenInfrastructureAssessmentWearedevelopingaNationalHydrogenInfrastructureAssessmenttoguidegovernmentandprivatesectorinvestmentincleanhydrogenastheindustrygrows.Wewillfollowthiswithacomplementaryassessmentofinfrastructureneedsforotherprioritytechnologies.Thisincludesidentifyingopportunitiestoreducecostsbylocatinghydrogen,energystorage,andCCSinfrastructurenearsteelandaluminiummanufacturers.Buildingonthehydrogeninfrastructureassessmentwillhelpdevelopanefficientlong-termframeworkforcleanhydrogenindustrialhubs.CleanHydrogenIndustrialHubsProgramThroughtheCleanHydrogenIndustrialHubsprogram,thegovernmentisinvesting$464milliontoacceleratethedevelopmentofanAustraliancleanhydrogenindustry.Cleanhydrogenindustrialhubsseektoconcentratedemandforhydrogeninonegeographicregion,therebyhelpingtoreducecostsandshareinformation.Cleanhydrogenindustrialhubswillco-locateusers,producersandpotentialexporters,allowingthemtobothleverageindustrial,energyandtransportresourcesandstimulateinvestment,innovationandworkforceskillsdevelopmentinourregions.ThenewcleanhydrogenindustrialhubsprogramwillbuildAustralia’spotentialtosupplydomesticusersandinternationaltradingpartnerswithlow-costcleanenergy,andwillhelptocapitaliseonglobalinterestininvestinginAustralianhydrogenopportunities.CooperationonhydrogenformspartofnewlowemissionstechnologypartnershipswithGermany,Japan,theRepublicofKorea,SingaporeandtheUnitedKingdomannouncedthisyear.Australia’sHydrogenAccordwithGermanyincludesacommitmenttofacilitatingindustry-to-industrycooperationondemonstrationprojectsinAustralianhydrogenhubs.Cleanhydrogenindustrialhubswillprovideopportunitiesforsectorcouplingthroughco‑locationofnewenergyresources,lowemissionstechnologies,manufacturing,andpotentialexportindustries.Thesehubswillbenefitfromtheregions’establishedinfrastructure,transportmechanismsandworkforces.Thegovernmenthasidentifiedthefollowinglocationsashighlyprospectivehydrogenhublocations:BellBay(TAS)Darwin(NT)EyrePeninsula(Whyalla,SA)Gladstone(QLD)HunterValley(NSW)LaTrobeValley(VIC)Pilbara(WA).36LOWEMISSIONSTECHNOLOGYSTATEMENT202137LOWEMISSIONSTECHNOLOGYSTATEMENT2021CommunityengagementTorealisetheeconomicandemploymentbenefitsfromemerginglowemissionsindustries,communitiesmustbegiventheopportunitytoparticipateinandshapethedevelopment.Earlyandongoingengagement,includingwithTraditionalOwners,willbekeytounderstandingcommunityvalues,concernsandaspirationsaslowemissionstechnologysectorsgrow.Factorsincludingtheperceivedcosts,risksandbenefits,fairness,andawarenessofadverseconsequencesallimpacttheoverallacceptanceandsupportfornewtechnologies.7Buildingpartnershipswithcommunitiesovertimethroughcollaborationisessential,includingthrough:clearlycommunicatingcosts,risksandbenefitsmanagingexpectationsandcommunicatingrealistictimeframesensuringbenefitsarefairlydistributedensuringnationallyconsistentmessagingaboutlowemissionstechnologies.8Communitiesmayhavedifferentattitudestoatechnologydependingontheirinteractionswithit.Earningcitizens’acceptanceforalowemissionstechnologyplacedneartheirhomesrequiresadifferentengagementprocesstoaremotelyplacedlowemissionstechnology.9Thegovernmentwillcontinuetoworkwithindustryandcommunitiestounderstandhowdifferentgroupsmaybeimpactedbythedevelopmentoflowemissionstechnologiesandtopromotebest‑practiceengagement.AustralianEnergyInfrastructureCommissionerTheAustralianEnergyInfrastructureCommissioner,anindependentroleappointedbythegovernment,receivesandreferscomplaintsfromconcernedcommunityresidentsaboutwindfarms,large-scalesolar,energystoragefacilitiesandnewmajortransmissionprojects.TheCommissioneralsopromotesbestpracticesforindustryandgovernmenttoadoptwhenplanningandoperatingtheseprojects.7AustralianCouncilofLearnedAcademies2021,AustralianEnergyTransitionResearchPlan,accessed4August20218AshworthP,WittK,FergusonM,SehicS2019,Developingcommunitytrustinhydrogen,accessed4August20219AustralianCouncilofLearnedAcademies2021,AustralianEnergyTransitionResearchPlan,accessed4August202138LOWEMISSIONSTECHNOLOGYSTATEMENT2021FacilitatingvoluntaryactionandinformingconsumerchoiceThegovernmentwillpromotevoluntaryactionandprovideclearinformationtohelpconsumersandbusinesseschooselowemissionstechnologies,includingthroughtheexistingEmissionsReductionFund,certificationsandstandards,andtheproposedVoluntaryZeroEmissionsGasMarket.EmissionsReductionFundTheEmissionsReductionFund(ERF)encouragesvoluntaryactiontoreduceemissions,providingfinancialincentivesforfarmers,businessesandcommunitiestoundertakevoluntaryprojectsthatstorecarbonoravoidemissionsandprovideeconomicbenefits.Itisoneoftheworld’slargestoffsetprograms,havingdeliveredmorethan100milliontonnesofabatement,andunderpinnedbyarigorousframeworktoensuretheintegrityoftheabatementgenerated.Underthefund,theCERissuesAustralianCarbonCreditUnits(ACCUs)toprojectsthatstorecarbonorreduceemissionsusingapprovedmethods.AnACCUisequivalenttoonetonneofCO₂-estoredoravoided.Onceearned,anACCUcanbesold,kept,orretired.GovernmentpurchasesofACCUs,combinedwithgrowingdemandfrombusinessandconsumersseekingtoreduceemissions,cancreatestrongvoluntarymarkets.Thesemarketscanstimulateearlydemandforlowemissionsproductsandtechnologies.TheERFnowhasover1,000projectsdeliveringcarbonabatementbenefitsacrossAustraliaandhascontractedatotalof209milliontonnesofCO₂-eabatement.ContractsundertheERFwilldeliverover$2billiontoruralandregionalcommunities,withover$640millionalreadydelivered.TheCERadministerstheERFanddevelopsERFmethods.ERFmethodsareindependentlyassessedbeforebeingmadebytheMinistertoprovidetransparencyandcertaintytopurchasersandconsumers.39LOWEMISSIONSTECHNOLOGYSTATEMENT2021Newmethodsforotherlowemissionstechnologiescouldfast-tracktheabilityofprojectproponentstogeneratetradeablecarboncredits.Throughthe2020–21Budget,thegovernmentprovided$40millionofnewfundingtoacceleratethedevelopmentofnewERFmethodstofiveperyear.SupportinglowemissionstechnologiesthroughtheERFAnewCCSmethod,releasedinSeptember2021,willenableACCUstobeearnedforeverytonneofemissionsavoidedthroughCCSERFprojects.Itwillhelpdrivevoluntaryemissionsreductionsacrosshard-to-abatesectorsincludingcement,naturalgasprocessingandsteelproduction.ThenewCCSmethodwillalsosupportcleanhydrogenproductionandthecreationofCCShubs.AnewmethodforsoilcarbonsequestrationisunderdevelopmenttomakeiteasierforfarmerstodevelopandgetsupportforprojectsundertheERF.Forthefirsttime,itwillallowmodelledestimatesofsoilcarbonchangetobeused,incombinationwithmeasurementapproaches,whichisexpectedtomateriallyreducecostsandincreasereturns.ThemethodwasreleasedforpublicconsultationinSeptember2021andisexpectedtobefinalisedbytheendof2021.Soilcarbonprojectsareattractingstronginterest,makingupaquarterofallnewprojectregistrationsin2021.ThegovernmentwilldevelopafurtherfivenewERFmethodsin2022.TheseincludemethodsalignedwithprioritytechnologiesandenablinginfrastructureinLETS2021including:electricvehiclechargingandrefuellinginfrastructure,cleanhydrogen,andcarboncapture,useandstorage.ClimateActiveClimateActiveisanongoingpartnershipbetweentheAustralianGovernmentandAustralianbusinessestodrivevoluntaryclimateaction.Certificationisawardedtobusinessesthatcrediblyreachnetzeroemissionsagainstabestpracticecarbonaccountingstandardbymeasuring,reducingandoffsettingemissions.ClimateActiveisdevelopingnewoptionstorecognisevoluntaryclimateaction,including:wherealloffsetsusedinacarbonneutralcertificationareACCUswherealltheelectricityusedismatchedwithrenewables.ClimateActiveisalsoconsideringotherformsofrecognition,includingforsubstantialandverifiedemissionsreductionachievements.CertificationandstandardsTransparentcertificationandstandardscanincreaseconfidenceinlowemissionsenergy,productsandmaterials.ThegovernmentwillcontinuetoworkwithindustrypartnersandothercountriestoensureAustraliancertificationandstandardsareconsistentandrecognisedaroundtheworld.OurcurrentworkonhydrogencertificationwillpavethewayforothertechnologieslikelowemissionsmaterialsandCCS.HydrogenGuaranteeofOriginSchemeThegovernmentisdevelopingaGuaranteeofOriginschemeforhydrogen–avitalsteptoprovidemarketswiththetransparentinformationneededforfutureglobaltradeinthisnewcleanenergy.Theschemewillprovidehydrogenconsumers,whethertheyarenationalgovernments,companiesorindividuals,withdataonhowandwherethehydrogentheypurchaseisproduced.Mostimportant,itwilldocumentthequantityofcarbondioxideemissionsassociatedwiththeproductionofeachtonneofhydrogen.Itwillalsoincludethetechnologyandenergysourceusedtoproducethehydrogen.InJune2021,thegovernmentreleasedadiscussionpaper,AHydrogenGuaranteeofOriginSchemeforAustralia,outliningaproposeddesignforadomesticscheme.AustraliaistakingaleadroleintheProductionAnalysisTaskforceoftheInternationalPartnershipforHydrogenandFuelCellsintheEconomy(IPHE).Thisinvolvesdevelopinganinternationallyagreedmethodologytodeterminethewell-to-gateemissionsfromdifferenthydrogenproductionpathways.TheIPHEisfocusedondevelopingacommonbasisforcalculatingtheemissionsintensityofhydrogentofacilitatecomparisonacrosscountries,ratherthandevelopingarbitrarydefinitionsofzeroorlowemissionshydrogen.Australia’sproposedGuaranteeofOriginschemealignswiththedevelopingIPHEmethodology.Thegovernmenthasannounced$9.7milliontohelptrialtheGuaranteeofOriginschemeinAustralia.WeexpecttheCleanEnergyRegulatortoconductthesetrials.40LOWEMISSIONSTECHNOLOGYSTATEMENT202141LOWEMISSIONSTECHNOLOGYSTATEMENT2021VoluntaryzeroemissionsgasmarketThegovernmentwillworkwithindustry,consumersandstateandterritorygovernmentsoverthenext12monthstodevelopavoluntaryzeroemissionsgasmarketinAustralia.Thismarketwilldriveearlydemandforcleanhydrogenandotherzeroemissionsgasesandrecogniseconsumers’voluntarypurchaseofzeroemissiongas.Fosteringthismarketwillalsoprovidetherevenuecleanhydrogenproducersneedtoscaleupquicklytobringdownproductioncostsclosertothe$2perkgstretchgoal.Certificationandstandards(suchastheHydrogenGuaranteeofOriginscheme)willprovidethetransparencyandtraceabilityneededforazeroemissionsgasmarket.TheNationalHydrogenStrategyincludesactionstoamendtheNationalGasLaw(andrelevantjurisdictionallawsandregulations)sothathydrogenandzeroemissionsgasblendscanbeinjectedintoAustraliangasnetworks.BiomethaneERFMethodBiomethaneisalowemissionsnaturalgassubstituteproducedbycapturingandrefiningorganicwastemethaneemissions.Biomethanecanbeinjectedintothenaturalgasdistributiongrid,orusedasadirectsubstitutefornaturalgasinotherindustrialanddomesticapplications.Asbiomethaneiscreatedfrombio-basedwastestreams,itresultsinsignificantlyloweremissionsthannaturalgas.Inlate2020,thegovernmentprioritisedthedevelopmentofanERFmethodtoenableprojectstoearnACCUsforgeneratingandusingbiomethane.Themethodisexpectedtobefinalisedincomingmonths.42LOWEMISSIONSTECHNOLOGYSTATEMENT202143LOWEMISSIONSTECHNOLOGYSTATEMENT2021PrioritytechnologiesExistingprioritytechnologiesPrioritytechnologiesarethefocusforgovernmentinvestment.ThefollowingfiveprioritylowemissionstechnologiesandeconomicstretchgoalswereintroducedinLETS2020.Accompanyingeconomicstretchgoalsareambitiousbutrealisticgoalstobringprioritylowemissionstechnologiestocostparitywithexistinghighemissionstechnologies.Prioritytechnologiesareselectedbasedonabatementpotential,scaleofeconomicbenefit,Australia’scomparativeadvantageandresponsivenesstogovernmentinvestment.CleanhydrogenStretchgoal:productionunder$2perkg.Cleanhydrogenisatransformativefuelthatcanbeusedtopowervehicles,generateheatandelectricity,andserveasafeedstockinindustrialapplications.Italsoallowsfortheexportofrenewableandlowemissionsenergy,eitherascleanhydrogenorahydrogenderivativesuchascleanammonia.Australia’scompetitiveadvantages–abundantlandandsolarandwindenergy,extensivecarbonstoragereservoirs,andexcellentreputationasatrustedenergyexporter–meanwearewellpositionedtobeaworldleadingcleanhydrogenproducer.EnergystorageStretchgoal:electricityfromstorageforfirmingunder$100perMWh.Grid-scaleelectricalenergystoragewillbeanessentialelementofAustralia’sfutureelectricitysystem.Broaddeploymentofelectricalenergystoragewillfacilitatefurtherintegrationoflow-costsolarandwindelectricityinthegrid.Energystoragewillprovidesystemsecurityservicesandbeasourceofreliable,dispatchableelectricity,andreducepressureonelectricitypricesbymeetingpeaksinconsumerdemand.LowemissionsmaterialsStretchgoal:lowemissionssteelproductionunder$700pertonneandlowemissionsaluminiumproductionunder$2,200pertonne.SteelandaluminiumareimportantglobalcommoditiesandthousandsofpeopleareemployedintheseindustriesinAustralia,manyinregionalareas.Australiacanhelptounlockthetechnologiesthatwillreduceemissionsfromthesesectorsacrossthesupplychain,fromminingtorefinedproducts.44LOWEMISSIONSTECHNOLOGYSTATEMENT2021CarboncaptureandstorageStretchgoal:CO₂compression,hubtransport,andstorageunder$20pertonneofCO₂.Large-scaledeploymentofCCSwillunderpinnewlowemissionsindustries(includinghydrogen)andprovideapotentialdecarbonisationpathwayforhard-to-abateindustriessuchasnaturalgasprocessingandcement.AustraliahasacomparativeadvantageinCO₂transportandstorage,withanumberofsourcesofCO₂locatedclosetosuitablegeologicalstoragebasinsandwithestablishedpipelineeasementsbetweenthetwo.SoilcarbonStretchgoal:soilcarbonmeasurementunder$3perhectareperyear.Australiahasuntappedpotentialasagloballysignificantsourceofcarbonsequestrationinoursoils.Offsetscreatedbysoilcarbonprojectscanprovideavaluableadditionalrevenuestreamforfarmers,andprovidedecarbonisationpathwaysfornewandexistingindustries,whilepreservingandcreatingjobs.Furthermore,increasingthesoilcarbonconcentration(intheformoforganicmaterial)mayimprovefarmproductivityandcropyieldsthroughbetternutrientandwaterretention,boostingresiliencetodroughtanderosion.Anewlyprioritisedtechnology–ultralow-costsolarThisyear,weintroduceultralow-costsolarasasixthprioritytechnology,withaneconomicstretchgoalforsolarelectricitygenerationat$15perMWh,orapproximatelyathirdoftoday’scosts.Low-cost,cleanelectricityiskeytoreducingthecostsofotherprioritylowemissionstechnologies.Itwillunlockeconomic,employmentandabatementpotentialforcleanhydrogen,lowemissionssteelandaluminium,andelectricalenergystorageforfirming.Low-costelectricitywillalsobeimportantforoperatingcompressorsusedinCCS.Achieving$15perMWhforsolarelectricitygenerationcouldhelpdelivertheworld’slowestcostcleanelectricity,enablingAustralianmanufacturersandbusinessestostaycompetitiveandsupportthewidereconomy.AdvancesinsolartechnologywillreducethecostofunfirmedelectricitysupplyinAustralia.Achievementofthisstretchgoalwouldseereductionsinthecostofsolaroutpacereductionsinwindenergy,enhancingasourceofAustraliancomparativeadvantage.Highpenetrationlevelsofultralow-costsolarelectricityinourgridwillrequirethesuccessfulimplementationofotherprioritytechnologies,enablinginfrastructureandmarketreforms,includingenergystorage,thedigitalgridandrecognitionoftheimportanceofdispatchablecapacityinelectricitymarkets.Inthemeantime,Australia’sexistingthermalgenerationfleetwillcontinueanessentialroleinmeetingcustomerandgridfirmingneeds.45LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australia’scomparativeadvantageAnnualsolarirradiationinAustraliaisthehighestpersquaremetreintheworld,andwehavesignificantland-masssuitableforlarge-scalesolardevelopments,andproximitytolargeandgrowingmarkets.10Australia’sresearchershaveplayedaworld-leadingroleinthedevelopmentofcommerciallyviablesolartechnologies,goingbacktothe1960s.Australiandevelopedpassivatedemitterrearcell(PERC)technologyisusedin90%oftoday’sglobalsolarphotovoltaic(PV)manufacturing.Ouruniversitiesandcompaniescontinuetodevelopcutting-edgetechnologytoincreasecellefficiencyandreducecost.Economicstretchgoal–ultralow-costsolarelectricitygenerationat$15perMWhSolarelectricitygenerationat$15perMWhwouldfast-trackAustralia’sabilitytomeetthecleanhydrogenstretchgoalofproductionunder$2perkg,andincreaseourcompetitivenessinhydrogenexportmarkets.11Itwouldalsosupportcost-competitiveproductionoflowemissionssteelandaluminium,anddirectaircaptureofCO₂(anemergingtechnology).The$15perMWhstretchgoalforultralow-costsolarhasbeensettakingintoconsiderationcurrentandprojectedcostsforutility-scalesolarelectricity,andalignmentwithinternationalbenchmarks.12,13,14Thestretchgoalassumesutility-scalesolarPVwithoutnetworkorfirmingcosts,andwithoutsubsidies.15Solar303030Reachingthestretchgoalwillrequirefurtherinnovationintheefficiencyofsolarmodulesandoptimisationoflargescaledeployment.Thegovernmentwillworktowardachieving30%moduleefficiencyat30centsperinstalledwattby2030.AustraliaiswellpositionedtodrivethenextphaseofcostreductionsinsolarPVthroughatwo‑prongedapproachacrosssolarcellR&D,andinnovationinassemblyanddeploymentmethods.Inparticular,therearetwosignificantleverstofacilitatecostreductionsforsolarelectricity:improvingmoduleefficiencyfromabout22%to30%reducingbalanceofplantcostsbyapproximately70%.10GeoscienceAustralia,SolarEnergy,accessed9August202111Cleanhydrogenproductionunder$2perkgrequirescleanelectricityataround$20perMWh,howevertoincreaseAustralia’scompetitivenessinhydrogenexports,productioncostscloserto$1perkgwillultimatelyberequired,necessitatinglowerelectricitycosts.12BloombergNEF,1H2021LCOEUpdate,accessed9August202113GrahamP,HaywardJ,FosterJ,HavasL2021,GenCost2020–21:Finalreport,CSIRO,accessed5August202114USOfficeofEnergyEfficiency&RenewableEnergy,SolarEnergyTechnologiesOfficeUpdated2030GoalsforUtility-ScalePhotovoltaics,accessed9August202115Otherassumptionsinclude:25%capacityfactor,5.9%WACC,and25yearoperatinglife.46LOWEMISSIONSTECHNOLOGYSTATEMENT202147LOWEMISSIONSTECHNOLOGYSTATEMENT2021EnablinginfrastructureEnablinginfrastructureisanewcategoryinLETS2021,identifyingtechnologiesandinfrastructurethatareessentialforenablingcommercialdeploymentoflowemissionstechnologiesandsupportingconsumerchoice.Thegovernmentwilltakestrategicandtargetedactiontoensureenablinginfrastructureareavailabletosupportcommercialinvestmentandconsumeruptake.Governmentactionwillalsobefocusedonensuringenergyaffordabilityforbusinessesandconsumers.Thegovernment’sfirstenablinginfrastructureprioritiesare:batterychargingandhydrogenrefuellingstationstosupportconsumerchoiceinelectricvehiclesadigitalgridwithenhancedmanagementsystemsandcapabilitiestosupportrapidgrowthinsolarandwindgeneration.ElectricvehiclechargingandrefuellinginfrastructureElectricvehiclesTherearebroadlytwotypesofelectricvehicles(EVs):Batteryelectricvehicles(BEVs)areelectricvehiclesthatexclusivelyuseelectrochemicalenergystoredinrechargeablebatterypackstopoweroneormoreelectricmotors,withnosecondarysourceofpropulsion.BEVsrequirebatterychargingtorestoretheelectricalenergyinthebatterybyconnectingittoapowersupply.Hydrogenfuelcellelectricvehicles(FCEVs)areelectricvehiclesthatuseelectricityfromafuelcellpoweredbycompressedhydrogen.FCEVsrequirehydrogenrefuellingstationstorefilltheFCEVshydrogentanksinmuchthesamewayasaconventionalpetrolordieselvehicle.ThevoluntaryuptakeofBEVsandFCEVsbyconsumersandbusinessesinAustraliahasbeenhamperedby:highervehicleupfrontcostslimiteddeploymentofpublicchargingandrefuellingstationslackofmodelvariety.48LOWEMISSIONSTECHNOLOGYSTATEMENT2021Globaladvanceswillseeelectricvehiclesreachcostparitywithinternalcombustionenginevehicles,potentiallyaroundthemiddleofthisdecade.16However,themarketislikelytosupplytoofewchargersforBEVsinruralandregionalareasduetoalowerpopulationdensityandslowerincreaseindemand.Morechargersareneededtofill‘chargingblackspots’acrossmetropolitan,regionalandruralAustralia.HydrogenrefuellingstationswillneedtodevelopinlinewithFCEVdeploymenttoensurecommercialviabilityinAustralia.ThegovernmentisbackingbatterychargingandhydrogenrefuellingstationstoenablegreaterconsumerchoiceandsupportdemandforelectricvehiclesinAustralia.Thegovernmenthascreatedthe$71.9millionFutureFuelsFundtosupportbusinessestointegratenewtechnologyvehiclesintotheirfleetsanddeliverbatterychargingandrefuellingstationsacrosscapitalcitiesandkeyregionalcentres,helpingtoimprovemotoristconfidence.InJuly2021,ARENA,onbehalfoftheAustralianGovernment,announced$24.5millionoffundingforroundoneoftheFutureFuelsFund.Thisinvestmentwillbuild403fastchargingstationsforbatteryelectricvehiclesin‘chargingblackspots’aroundthecountry,including:Sydney,Newcastle,CentralCoast,Wollongong,Melbourne,Geelong,Brisbane,GoldCoast,SunshineCoast,Perth,Adelaide,Canberra,HobartandDarwin.16McKinsey2019,Makingelectricvehiclesprofitable,accessed9August202149LOWEMISSIONSTECHNOLOGYSTATEMENT2021Furtherinvestmentwillberequiredtoprepareforarapidincreaseinthenumberofconsumerschoosingelectricvehicles,includingto:increaseavailabilityofpublicbatterychargingandhydrogenrefuellingstationsensurethatelectricitynetworkscanhandletheincreaseinchargingfromhouseholdsandbusinesses.Asdemandforvehiclechargingincreases,wewillneedtoconsiderpossibleimpactsonelectricitygridsecurityandreliability.ThegovernmentiscontinuingtoworkdirectlywiththestatesandterritoriesandthroughtheEnergyMinistersMeetingtoenableandincentiviseBEVchargingthatwilleffectivelyandefficientlyintegrateBEVsintotheNationalElectricityMarket.SmartchargingforoptimisedgridintegrationFastcharginginfrastructurewillbeessentialforlong-rangeBEVdrivingacrossAustralia.However,estimatessuggest75%ofchargingwilloccurathome.17Increasednumbersofelectricvehiclesbeingchargedathomeatpeaktimescouldoverloadexistingelectricitynetworks,andrequireinvestmentindistributionnetworks,whichwouldbebornebyallnetworkusers.InvestmentinlowpowersmartcharginginfrastructurewillberequiredtooptimisegridintegrationofBEVs.Whencoordinatedandmanagedeffectivelybyaggregatorsandgridoperators,BEVchargingoffersanewformofflexibledemandthatcouldsupportthesecurity,reliabilityandaffordabilityoftheelectricitysystemforallenergyusers.Deploymentofsmartchargerswillminimisetheneedtofurtherinvestinnetworkupgrades.DigitalgridAustralia’selectricitysystemisexperiencingrapidgrowthindistributedandgrid-scalerenewablegeneration.Atthesametime,coal-firedpowerplantsareprogressivelyretiring.Thesechangeswilldelivercontinuingdeepemissionreductionsintheelectricitysector,supportfordecarbonisationinon-gridindustrialsectorsandtheemergenceofacleanhydrogenindustry.LETS2020prioritisedstoragetofirmrenewableelectricityasacriticaltechnologytosupportthistransition.ThetransformationofAustralia’selectricitysystemismakingtheplanning,investmentandoperationofthegridmorecomplex.Existingsoftwaresystemsandcapabilitieswerenotdesignedtocaterforlargeamountsofvariablerenewablegeneration.AnenhanceddigitaloperatingsystemisimperativefortheAustralianElectricityMarketOperator(AEMO),togetherwithmarketparticipantssuchasgenerators,networksandpolicymakers,tocontinuetomanageachanginggridinawaythatis:effectiveefficientsecurereliable.AEMOisworldleadinginrespondingtothesechangingneeds,andhasalreadybeguntodevelopthisoperatingsystem.Thishasinvolvedtakingamodularcloud-basedapproachthatwillenablethesystemtobebuiltinaprogressiveandadaptiveway.Aninitialinvestmentof$13million,includingmorethan$2millionfromARENA,isalreadyunderwaytodevelopafoundationmoduleanda17McKinsey2018,Chargingahead:Electric-vehicleinfrastructuredemand,accessed9Aug2021connectionsmodule.Thefoundationmodulecreatesa‘digitaltwin’oftheNationalElectricityMarketattransmissionscale,includingeverygrid-connectedsolarandwindfarminthesystem,toenablehigh-resolutiongridsimulationsahundredtimesfasterthanbefore.Theconnectionsmodulewillhelpintegratesolar,windandstoragefasterandatlowercostbyallowingmodellingagainstthewideareanetworkwhilstprotectingintellectualpropertyofexistingassetsthatareconnectedtothegrid.Thegovernmentwillsupporttheongoingexpansionofanenhancedoperatingsystem,toensurethefullsuiteofcapabilitiesneededtomanagehighlevelsofvariableanddistributedelectricitygenerationareavailableovertime.ThenextpriorityidentifiedbyAEMOisthedevelopmentofadistributionsystemmodule.ThismodulewillallowvariousdistributionnetworksandAEMOtointegratedistributedenergyresourcesanddistributionnetworkswiththetransmission-levelsysteminthegridsimulation.Inpartnershipwiththedistributionbusinesses,thiswillhelpmanagegenerationfromrooftopsolar,firmingfromresidentialandcommunitybatteries,electricvehiclechargingandenergysecurity.Thiswillbeparticularlyusefulforrooftopsolar,theoutputofwhichisweatherdependent.Othertoolsandcapabilitiesforfuturedevelopmentcouldinclude:similarmodulesfortheWesternAustralianelectricitymarketpredictingoperationalconstraintsfromrenewablestoinformelectricitymarketoperationsandinvestmentslinkingreal-timegridoperatingdatawiththesimulatedgridadoptionofprecisionweatherforecastingforplanningintegrationofgassystemsandmarketsaccuratefrequencyresponsemodelling.50LOWEMISSIONSTECHNOLOGYSTATEMENT202151LOWEMISSIONSTECHNOLOGYSTATEMENT2021Enhancedoperatingsystemswillunderpinthegridcontrolroomsofthefutureacrosstheworld.ForAEMOandpolicymakers,thesesystemsarecriticaltotheplanning,designandoperationoffutureelectricitygridsandmarkets.TheywillassistintheefficientdevelopmentoftheNationalElectricityMarketthroughtheIntegratedSystemPlan,andpost-2025reforms.Thesesystemswillalsoreduceuncertaintyandriskfordevelopersandinvestors,andfacilitatecapitalflows.AEMOisnottheonlysystemoperatorfacingthetechnicalchallengesposedbyhigherpenetrationofdistributedandvariablerenewableelectricity.Leadingsystemoperatorsaroundtheworldarenowbeginningtoprioritisethedevelopmentofnewoperatingsystemssuchasthese.AEMOiscurrentlyoneoftheinternationalleadersinthisarea.AsafoundationmemberoftheGlobalPowerSystemTransformation(G-PST)consortium,andwithgovernmentsupport,AEMOwillcontinuetocollaboratewithothergridoperatorsinthedevelopmentofadvanceddigitalgrids.G-PSTConsortiumTheG-PSTisaninternationalgroupofelectricitysystemoperatorscollaboratingwithleadinginternationalresearcherstoacceleratethetransitiontolowemissions,low-cost,secureandreliablepowersystems.TheG-PSTrepresentsamajorglobalcommitmenttoimplementingtechnologiesandapproachestopermanentlyreduceemissionstrajectories,whilesimultaneouslyimprovinggridreliability,resilience,andsecurity.AEMOisafoundingmemberoftheG-PSTand,withCSIRO,leadstheAustralianresearchdelegationcontributingtotheConsortium.52LOWEMISSIONSTECHNOLOGYSTATEMENT202153LOWEMISSIONSTECHNOLOGYSTATEMENT2021EmergingtechnologiesEmergingtechnologieshavetransformativepotential,butrequirecontinualmonitoringofgloballearningrates,andresearchandinvestmenttrends(Figure6).Thiscategoryincludestechnologiesatanearlystageorwheredevelopmentsaredrivenprimarilyoverseas.TheAustralianGovernmentmonitorsemergingtechnologiestoseeiftheycanhelpaddressAustralia’sbigtechnologychallenges.Thesechallengesinclude:reducingemissionsexpandingAustralia’sprimaryandmanufacturingindustriessupportingjobscapturingexportopportunitiesforlowemissioncommodities.InLETS2021,wehighlighttwoemergingtechnologiesthatshowpromiseforfutureprioritisationandcouldhelpaddressAustralia’semissionschallenges.Thegovernmentwillundertakefurtheranalysisonthepotentialofthesetechnologiesandpromoteearlyinvestmentstosupporttheirdevelopment.Theyare:livestockfeedsupplementslowemissionscement.WealsolookbrieflyatthreeotheremergingtechnologiesfromthelistinFigure6.54LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure6:Emergingtechnologies55LOWEMISSIONSTECHNOLOGYSTATEMENT2021LivestockfeedsupplementsAustraliaisoneoftheworld’stopfiveexportersofredmeatandinthetoptenformilk.Inthe12monthsended30June2019,theredmeatandlivestockindustrysupported189,000directjobsand245,000indirectjobs.18Emissionsfromentericmethane–producedbymicrobialfermentationinruminantanimals–were46milliontonnesCO2-ein2020,around10%ofAustralia’stotalemissions.19TheAustralianredmeatindustryhascommittedtobecomingcarbonneutralby2030.20Thiswillrequirenewtechnologiesthatreduceentericmethaneemissionsfromlivestock.NewlivestockfeedsupplementssuchasAsparagopsisseaweedandtheorganiccompound3-nitrooxypropanol(3-NOP)couldreduceemissionsandimprovemeatyields.21Bioactivecompoundsinthesefeedsupplementsinterruptmethane-formingbacterialprocessesintheanimal’sdigestivesystem,therebysubstantiallyreducingtheformationofmethane.Inaddition,foodenergythatwouldotherwisebelosttofuellingbacterialmethaneproductionismadeavailabletobeabsorbedbytheanimal,leadingtofastergrowthratesandconsequentcostsavingsforthefarmer.Asparagopsissupplementshavedemonstratedpotentialemissionsreductionsofover80%.22AustraliancompanyFutureFeedownstheglobalintellectualpropertyfortheAsparagopsisfeedsupplement,whichwasdevelopedbyCSIRO,MeatandLivestockAustralia,andJamesCookUniversity.18MeatandLivestockAustralia2020,StateoftheIndustryReport2020,accessed4August202119DepartmentofIndustry,Science,EnergyandResources2020,Australia’semissionsprojections2020,accessed5August202120MeatandLivestockAustralia2020,TheAustralianRedMeatIndustry’sCarbonNeutralby2030Roadmap,accessed4August202121BlackJL,DavisonTM,BoxI2021,MethaneEmissionsfromRuminantsinAustralia:MitigationPotentialandApplicabilityofMitigationStrategies,Animals,11,951,accessed5August202122RoqueBM,VenegasM,KinleyRD,deNysR,DuarteTL,YangX,etal.2021,Redseaweed(Asparagopsistaxiformis)supplementationreducesentericmethanebyover80percentinbeefsteers,PLoSONE16(3):e0247820,accessed5August202156LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australia’slivestockemissionscoulddeclinebyoversevenmilliontonnesCO₂-eayeariflivestockfeedtechnologiesthatreduceemissionsbyanaverageof75%weredeliveredto:abouthalfofAustralia’scattleinfeedlotsanddairyfarms15%ofgrazingcattleandsheep.Furtherdevelopmentandvalidationofthesesupplementsatacommercialscalecouldleadtovoluntaryadoptionacrosstheindustry.ThiswouldseeAustraliaprosperinmarketsforlowemissionsmeatanddairyproducts,supportingindustrygrowth,internationalcompetitivenessandjobs.Itcouldalsohelpcreateadomesticseaweedindustrywithadditionaleconomicandcarbonsequestrationbenefits.23,24Initially,livestockfeedsupplementswillbemoreeffectiveinplaceswheredeliverycanbecontrolled,likefeedlotsanddairyfarms.Emissionsreductionswillbesignificantlyhigherifsupplementscanbereliablydeliveredtothedispersedgrazingherdsthatmakeup95%ofAustralia’slivestock.Thegovernmentisinvesting$30.7millionoversixyearstowardspromisingfeedtechnologies:$6millionfortheMethaneEmissionsReductioninLivestockprogramtosupportresearchintotheabatementpotentialandproductivitybenefitsoflivestockfeedtechnologies$23millionfortheLowEmissionsSupplementstoGrazingAnimalsatScaleprogramtohelpdeveloptechnologiestodeliverlowemissionsfeedsupplementstograzinganimals$1.7milliontoscale-upproductionofAsparagopsis.25Thisinvestmentwillhelpusunderstandhowfeedtechnologiesimproveproductivityandreduceemissions,andfast-tracksolutionstodeliverfeedsupplementstograzinganimals.ItmayalsoinformframeworksunderClimateActiveandtheEmissionsReductionFundtorecognisereducedemissionsfromfeedtechnologies.Thiswillhelplivestockfarmersdiversifytheirrevenuesbyparticipatinginvoluntarycarbonmarkets.LowemissionscementConcrete,ofwhichthekeyingredientiscement,isthemostwidelyusedconstructionmaterialintheworld.TheAustraliancementandconcreteindustrysupports18,000directand80,000indirectjobs.26Theconcretevaluechaininvolves:mininglimestone,clayandsandtomakeclinker,whichgivescementitsbindingpropertiesproducingclinkerinhightemperaturekilnsproducingcementfromgroundclinkerandothermaterialsmixingcement,waterandaggregatestomakeconcrete.23AgriFuturesAustralia2020,AustralianSeaweedIndustryBlueprint–ABlueprintforGrowth,accessed5August202124DuarteCM,WuJ,XiaoX,BruhnA,Krause-JensenD2017,CanSeaweedFarmingPlayaRoleinClimateChangeMitigationandAdaptation?,Front.Mar.Sci.4:100.doi:10.3389/fmars.2017.00100,accessed5August202125Thisincludesa$1millionAcceleratingCommercialisationgrantundertheEntrepreneurs’Programtoscale-upproductionandsupportthecommercialisationofAsparagopsis,anda$675,000grantfromthe$30millionCommercialisationFundtoestablishaprocessingandmanufacturingfacilityforthisseaweedproduct.26Cement,Concrete&AggregatesAustralia,Concrete,Quarry&CementIndustriesinAustralia,accessed5August202157LOWEMISSIONSTECHNOLOGYSTATEMENT2021Carbondioxideisreleasedasaby-productwhenconvertinglimestoneintoclinker.Theclinkerproductionstepaccountsfor60%oftheemissionsfromcementproduction.Fuelstoheatthekilnsaccountfor30%andelectricityusemakesuptheremaining10%.27EmissionsfromAustralia’scementproductionwerefivemilliontonnesCO₂einthetwelvemonthsended30June2019,beingjustover1%ofAustralia’stotalemissionsinthatperiod.28TheAustraliancementindustryhasalreadyreducedannualemissionsbyover20%since2010.29Anumberofsolutionscouldhelpfurtherreduceemissionsassociatedwithcementproduction.Theseincludetheuseofrenewableelectricity,improvingenergyefficiencyandclinkersubstitution.Inaddition,CCS–aprioritylowemissionstechnology–willplayaparticularlyimportantrolebecausethereleaseofCO₂isaninherentoutputofthechemicalreactionthatconvertslimestoneintoclinker.CapturingtheCO₂andstoringorusingitiscurrentlytheonlyviableeliminationpathway.27CementIndustryFederation2020,AustralianCementReport2020,accessed5August2021at:http://cement.org.au/wp-content/uploads/2020/08/CIF-Industry-Report-2020.pdf28Thisincludesscope1(processandthermal)and2(electricity)emissions.29CementIndustryFederation2020,AustralianCementReport2020,accessed5August202158LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australiaiswellplacedtodevelopalowemissionscementindustrythankstoour:strongresearchanddevelopmentcapabilitiespotentialforcleancheapenergy,andCCS.Thegovernmentisalreadyinvestinginlowemissionscement.Thisincludesover$75millionforcooperativeresearchcentres(CRCs)liketheSmartCreteCRC,Building4.0CRCandLowCarbonLivingCRC.30TheCEFCfinancescommercialandindustrialbuildingprojectsthatreduceembodiedcarbonbyusingloweremissionscement.Forexample,in2021theCEFCprovided$95millionfortheRoeHighwayLogisticsParkinPerth,whichwilluselowemissionsconcretethatcanreduceemissionsbyupto42%comparedtotraditionalconcrete.Thegovernment’sinvestmentinprioritytechnologieslikeelectricalenergystorageandCCSalsosupportsemissionsreductionsatvariouspointsalongthevaluechain.OtheremergingtechnologiesHeatpumpsEmissionsfromtheburningoffuelsforheat,steamorpressuremadeup20%ofAustralia’sgreenhousegasemissionsin2020.31Morecommonlyknownasreverse-cycleairconditioning,heatpumpscanbeusedtoprovideheatingandcoolinginresidential,commercialandindustrialapplications.Forheating,theyuseelectricitytoconcentrateandmoveheatfromacold‘source’toahot‘sink’,toproducehotair,hotwaterorsteam.30$21millionforSmartCrete,$28millionforBuilding4.0,$28millionforLowCarbonLiving31DepartmentofIndustry,Science,EnergyandResources2020,Australia’semissionsprojections2020,accessed5August202159LOWEMISSIONSTECHNOLOGYSTATEMENT2021Theprincipaladvantageofheatpumpsoverincumbenttechnologiesistheirefficiency.Thisismeasuredbytheco-efficientofperformance(COP),theratiobetweenelectricalenergyusedandheatproduced.Foreveryunitofenergyinput,heatpumpscandelivermultipleunitsofthermalenergy.Forexample,heatpumpsforresidentialspaceheatingcanhaveaCOPfrom3to6,whileincumbenttechnologiessuchasgas-firedboilersarelessthan1.32DirectaircaptureDirectaircapture(DAC)isanearly-stagetechnologythatuseseitherchemicalsolutionsorsolidadsorptionfilterstocapturecarbondioxidedirectlyfromtheair.ThecapturedCO₂couldthenbeused,orcompressedandstoredingeologicalformations.DACistechnicallyfeasible.However,itisexpensivebecausecarbondioxideismuchlessconcentratedintheaircomparedwiththeconcentrationinindustrialfluegases.EstimatesofcapturecostscurrentlyrangefromUS$100toUS$1,000pertonneofCO₂-e.33AfewsmallDACplantsareoperatingcommerciallyinEuropeandNorthAmerica,andtwolargescalefacilitiesarebeingdevelopedintheUSandIceland.InterestinDAChasbeengrowing,butthetechnologyneedsmoresupporttodemonstrateitsviabilityatlargerscales.AustraliancompanySouthernGreenGasisdevelopingAustralia’sfirstsolar-poweredDACunits.ThetechnologyisbasedonsmallmodularunitsthatcancaptureaboutatonneofCO₂peryear.Forsignificantcapture,thesesmall,modularunitswillbeneededinthemillions.TheycanbemanufacturedinAustralia,creatingjobsforAustralians.34SmallmodularreactorsSmallmodularreactors(SMR)aremodernnuclearreactorsthataresmall(lessthan300MW)comparedwithconventionalnuclearreactors(greaterthan1000MW).TheirsmallsizemeansSMRscanbemanufacturedefficientlyinfactoriesanddeployedtomeetlocalneeds.Theyhavepotentialtobeaggregatedtoscaleupgenerationcapacitytomeetlarge-scaleelectricitydemand.ThetechnologyandeconomicsofSMRsarestillevolving.FurtherinnovationanddemandcouldreducethecostofbuildingandoperatingSMRs,whichcouldprovidezero-emissionselectricityandsupportgridreliability.SMRscouldbecomeanoptionforAustraliaifthereisbipartisansupporttoliftAustralia’sbanonnuclearenergy.Inthemeantime,thereareopportunitiesforAustraliatosupportthecontinueddevelopmentofthistechnologyandcontributetheexpertiseoftheAustralianNuclearScienceandTechnologyOrganisation(ANSTO)totheseefforts.TheAustralia-UKPartnershiponLowEmissionsSolutionsincludesacommitmenttocooperateonresearchanddevelopmentforSMRs,includingadvancednucleardesignsandenablingtechnologiessuchasadvancedmaterialsandwasteprocessing.3532EnergyEfficiencyCouncil,Backtobasics:heatpumps,accessed5August202133InternationalEnergyAgency,DirectAirCapture,accessed5August202134SouthernGreenGas,NegativeEmissions:Australia’sJobsCreating,RenewableEnergyExportIndustry,accessed5August202135MinisterTaylor2021,Australia-UKpartnershiptodrivelowemissionssolutions,MediaRelease29July2021,accessed1September202160LOWEMISSIONSTECHNOLOGYSTATEMENT202161LOWEMISSIONSTECHNOLOGYSTATEMENT2021AcceleratingdeploymentofprioritylowemissionstechnologiesThegovernmenthasexaminedpossibledeploymentpathwaysfortheprioritylowemissionstechnologies,focusingon:identifyinginvestmentswiththegreatestimpactoncostreductionestimatingtimeframesforwhentheeconomicstretchgoalsarelikelytobemet.36AchievingoureconomicstretchgoalsThegovernment’sambitionistoreducethecostsofprioritylowemissionstechnologiestomeettheeconomicstretchgoalsassoonaspossible.Wehaveassessedwhenthestretchgoalsmaybeachievedundera‘hightechnologyscenario’,recognisingthatthepaceofreachingthesegoalswilldependonarangeoffactors,including:technologicaladvancescapitalandfinancingrequirementsapprovalandconstructiontimeframesglobaluptake.The‘hightechnologyscenario’assumesacceleratedglobaluptakeofnewandemerginglowemissionstechnologies,drivenby:publicinvestmentsandpoliciesthatreduceriskforprivateinvestorsashiftinconsumerpreferencestowardslowemissionssupplychainsprivateinvestmentsconsistentwithanaverageglobaltemperatureriseofnomorethan2°C.36ThisworkforthefiveprioritiesfromLETS2020wassupportedbyanalysisfromMcKinseyandCompany.Initialanalysisfortheultralow-costsolarwassupportedbyworkfromARENA,AEMOandtheDepartmentofIndustry,Science,EnergyandResources.InputpriceassumptionsforelectricitypriceswerebasedonCSIRO2020,GenCostreport2019-20,accessed5August2021;CommoditiespriceswerebasedonDepartmentofIndustry,Science,EnergyandResources2020,Australia’semissionsprojections2020,accessed5August2021,andWorldBankprojections.62LOWEMISSIONSTECHNOLOGYSTATEMENT2021Arangeisgivenfortheestimatedtimeframeofachievingeacheconomicstretchgoal,startingwiththeearliestdateitcouldbemet.Confidenceofreachingthestretchgoalincreasestowardstheendoftherange(Figure7).Figure7:Projectedtimelineforachievingeconomicstretchgoals2020202520302035204020452050CleanhydrogenCleanhydrogenproductionunder$2perkilogramUltralow-costsolarSolarelectricitygenerationat$15perMWhEnergystorageElectricityfromstorageforfirmingunder$100perMWhLowemissionssteelLowemissionssteelproductionunder$700pertonne(basedonthemarginalcost)LowemissionsaluminiumLowemissionsaluminiumunder$2,200pertonne(basedonthemarginalcost)CarboncaptureandstorageCO2compression,hubtransportandstorageforunder$20pertonneofCO2SoilcarbonSoilorganiccarbonmeasurementunder$3perhectareperyearcleanhydrogenproducedfromnaturalgaswithemissionscapturedandstoredpermanentlyundergroundistechnicallyandeconomicallyfeasible,butsubjecttoofftakeagreements,developmentapprovalsandtheadoptionofahydrogenGuaranteeofOriginscheme†priceassumptionsfortheotherprioritytechnologiesdon’tyetincludethereductioninelectricitypricesexpectedfromultralow-costsolar,ortheassociatedupsidebenefitsformeetingthestretchgoals‡economicallyviableinthelate2020s,butsubjecttocapitaldevelopmentcycles^subjecttoofftakeagreementsanddevelopmentapprovalsLithium-ionbatteriesHydrogenanddirectreductionofiron‡RenewableelectricityandinertanodesExpecteddeployment^Advancementinproximalsensing,modellingandremotesensingtechnologiesLargescalesolar†SteammethanereformingwithCCSRenewableelectrolysisHigherconfidenceofachievingstretchgoalEarliestdateforachievingstretchgoalLegend63LOWEMISSIONSTECHNOLOGYSTATEMENT2021EmissionsreductionthroughdeploymentofprioritylowemissionstechnologyTheTechnologyInvestmentRoadmapisthecornerstoneofAustralia’sLong-TermEmissionsReductionPlan.Technologywillbekeytoreducingemissionswhileensuringtheeconomygrowsandjobsarecreated(Figure8).Figure8:PrioritytechnologycontributiontomeetingAustralia’snetzeroby2050target2005Reductionstodate(2020)TechnologyInvestmentRoadmap-20%-40%100%GlobaltechnologytrendsInternationalanddomesticosets-15%-15%FurthertechnologybreakthroughsNetzeroby2050-10%to-20%Theprioritytechnologies(identifiedinLETS2020andLETS2021)couldcontributearound40%oftheannualemissionsreductionsneededtoachievenetzeroemissionsby2050.Globaltechnologytrends,suchaselectrificationoftransportcoulddeliveratleastafurther15%oftheannualreductionsrequired.Offsetswillplayacrucialroleinclosingthegaptowardsnetzero.ModellingfortheLong-TermEmissionsReductionPlanshowsthatmodestcontributionsfromlandsectorsequestrationandtargetedpurchasesofinternationaloffsetsallowAustraliatoreduceitsnetemissionstoaround85%below2005levels.TherearearangeofwaysthatAustraliacanclosetheremaininggaptonetzeroemissionsby2050.Futuretechnologydevelopmentsandmarketsareinherentlyuncertain,anditispossiblethattechnologycostswillfallfasterthananticipatedforsometechnologies,andnewanddisruptivetechnologiesmayemerge.Theroadmapwillmonitorlowemissionstechnologydevelopmentsthroughannualstatements.Inadditiontoactionstosupportlowemissionstechnologies,thegovernmentisalsodrivingemissionsreductionsthroughotherinitiatives,includingtheEmissionsReductionFundandClimateActive.Thegovernment’sLong-TermEmissionsReductionPlansetsoutouractionsforreducingemissionsacrosstheeconomy.64LOWEMISSIONSTECHNOLOGYSTATEMENT2021Aswellasreducingourownemissions,meetingthestretchgoalsforourprioritytechnologieswillcontributetotheglobaltaskofreducingemissionsthroughlowemissionsexportsandadvancinginnovation.CleanhydrogenStretchgoal:cleanhydrogenproductionunder$2perkgPotentialforcleanhydrogeninAustraliaAustraliahastheopportunitytobecomeaworld-leadingcleanhydrogenproducerandexporter.Cleanhydrogenwillhelpdecarbonise‘hard-to-abate’sectorsthroughapplicationslike:heavyhaulagefuelcellelectricvehiclescleanammoniaasachemicalfeedstockformakingfertiliser,fuelforshipping,andco-firingforelectricitygenerationincountrieslikeJapan.thermalenergyforindustrialapplicationschemicalreductionofironoretohotbriquettediron.65LOWEMISSIONSTECHNOLOGYSTATEMENT2021Cleanhydrogenforfuelcellelectricvehiclesislikelytobeoneoftheearliestapplicationstoreachbreakevencostwithconventionalfuels,onthebasisofkilometresdriven.Productionofcleanammoniaislikelytoreachcostparitywithfossil-fuelbasedammoniaproductionbeforecleanhydrogenwillreachcostparityagainstnaturalgasforindustrialheating,onagigajouleequivalentbasis.Cleanhydrogenblendingintonaturalgashastheimportantbenefitofbuildingearlyproductionscalethatcanthensupportdemandfromotherusecases.Gascustomersmaywelcometheopportunitytopurchasezeroemissionsgasatasmallpremium.Cleanhydrogencanalsohelpfirmtheelectricitygrid.Electrolysersforproductionareaflexibleload,whichcanberampedupanddowntomatchrenewableelectricitysupplyandprovideothergrid-supportservices,includingpotentialforfrequencyregulation.Thisfacilitatestheincorporationofeverlargerquantitiesofdistributedandvariablerenewableelectricityinthegrid,whilemaintainingsystemsecurity.Countriesacrosstheworldrecognisethatreducingthecostofcleanhydrogenproductionisessentialforwidespreaduptake.37,38TheUSgovernmentisaimingtoreducethecostsofcleanhydrogenproductionby80%toUS$1perkginonedecade.TheAustralianGovernmentisprovidingsignificantinvestmenttounlockhydrogenforkeysectorsandsupportthegrowthofourhydrogenindustry.Akeyfocusofthegovernmentistobuilddomesticdemandandexportopportunitiesthroughthedevelopmentofregionalhydrogenhubs.Thiswillhelptheindustrybuildscale,whichiscriticalforbringingcostsdownandbecomingagloballycompetitivesupplier.Hubswillalsohelptheindustrytoreduceinfrastructurecosts,encourageinnovation,andenhanceskillsandtrainingefforts.Toactivatetheseopportunities,theAustralianGovernmentisinvesting$464millionintothefirststepsforthedevelopmentofuptosevenhydrogenhubsinregionalAustralia.DeploymentpathwaysandcostdriversAvarietyofmethodsarebeingexploredfortheproductionofcleanhydrogen.Thethreemainmethodsunderconsiderationare(Figure9):renewableelectrolysissteammethanereformingwithCCScoalgasificationwithCCS.37HydrogenCouncil2020,Pathtohydrogencompetitiveness,Acostperspective,accessed5August202138InternationalEnergyAgency2019,TheFutureofHydrogen,accessed5August202166LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure9:CleanhydrogenproductionmethodsgasiﬁerCCSElectrolysisSteammethanereforming+CCSCoalgasiﬁcation+CCSsteammethanereformercoalwaterwaterrenewableelectricitywaterelectrolyseroxygenCCSnaturalgashydrogencarbondioxide67LOWEMISSIONSTECHNOLOGYSTATEMENT2021GuaranteeofOriginschemeAdomesticHydrogenGuaranteeofOriginschemewillbeestablishedtomeasureandtrackimportantcharacteristicsofhowandwherehydrogenisproduced,includingdirectandupstreamcarbondioxideandmethaneemissions,andtheproductionenergysourceandtechnology.Alltechnologiestoproducecleanhydrogenwillbeconsideredunderthescheme.Thiswillenablecustomerswhobuycleanhydrogeninthefuturetohavetheinformationtheyneedtochoosetheproductbestsuitedtotheirneeds.RenewableelectrolysisSteepreductionsinthecostsofrenewableelectricityandelectrolyserscouldmakeelectrolysisthecheapestwaytoproducecleanhydrogenassoonas2028(Figure10).Whilerenewableelectricitycostsareprojectedtofall,thegovernmentwilldriveacceleratedcostreductionthroughthenewlyprioritisedtechnology,ultralow-costsolar,supportedbytheSolar303030initiative.Cheaperandmoreefficientelectrolyserswillprimarilybedrivenbyindustry,withgovernmentprovidingsupportforearlyprojectstoestablishsupplychainsanddrivescale.Figure10:Electrolytichydrogenproductioncostbreakdownunderahightechnologyscenario012345ElectricityElectrolyserRemainingoperationandmaintenance205020302021YearProductioncosts($perkg)TherenewableelectricitygenerationrequiredtoproducehydrogenforexportwillbemuchlargerthanAustralia’scurrentelectricityproductioncapacityandrequiresignificantinvestment.Forexample,ahydrogenexportindustrysupplyingthesameamountofenergyasAustralia’scurrentliquefiednaturalgasexportswouldneedapproximately2,200TWhofelectricity.ThisiseighttimesAustralia’stotalelectricitygenerationfor2019.39SteammethanereformingwithCCSandcoalgasificationwithCCSOuranalysisshowsthatcleanhydrogenfromnaturalgaswithemissionscapturedandpermanentlystoredundergroundcouldachievethestretchgoalnow.DeploymentofhydrogenproductionfromsteammethanereformingwithCCSinAustraliais39FinkelA2021,GettingtoZero:Australia’sEnergyTransition,QuarterlyEssayIssue8168LOWEMISSIONSTECHNOLOGYSTATEMENT2021subjecttodevelopmentofCCSbasins,securinglow-costgas,offtakeagreements,developmentapprovalsandtheadoptionoftheHydrogenGuaranteeofOrigincertificationscheme.Shouldthesebeachieved,thecleanhydrogenstretchgoalcouldbemetasearlyas2025.NaturalgaspriceshavethelargestimpactonthecostofcleanhydrogenproducedfromsteammethanereformingandCCS.WhileFigure11assumes$5pergigajouleofgas(i.e.gasavailableatthecostofproduction,fromlowcostsources),foreveryadditional$1pergigajouleingascosts,weestimatethecostofproducingcleanhydrogenincreasesbyaround13centsperkg.Forexample,ifgascostsaproducer$5pergigajoulein2050,thecostofproducingcleanhydrogenfromgaswouldbeapproximately$1.40perkg.Ifgascosts$7pergigajouleinthesameyear,thecostofproducingcleanhydrogenfromgaswouldbeapproximately$1.70perkg,stillbelowthe$2perkgstretchgoal.ThedistancefromthehydrogenproductionsitetoasuitableCCSreservoirwillalsoaffectcosts.Othercostdriversarethehighlevelofcarbondioxidecapturerequiredtomeetcustomerexpectationsforcleanhydrogenandthecostofminimisingsourcesofupstreamemissions.Practically,cleanhydrogenproducedfromcoalorgaswillsupportthedevelopmentofearlydemandopportunitiesandpositionAustraliatobeanearlygloballeaderinhydrogenproduction.Whilecleanhydrogenproducedthroughelectrolysisissignificantlymoreexpensivein2021,itscostsareexpectedtofallrapidlyandwilllikelyachieveparitywithcleanhydrogenfromcoalwithCCSinthelate2020sorgaswithCCSaround2030.ConsistentwiththeprinciplesoutlinedinAustralia’sLongTermEmissionsReductionPlan,theGovernmentwillsupportallformsofcleanhydrogenproductionandleaveituptocustomers,whetherdomesticorinternational,tochoosetheirpreferredproductionsource.Toinformcustomerchoice,thegovernmentisdevelopingaGuaranteeofOriginschemeforhydrogen.Theschemewillprovidehydrogencustomerswithdataonhowandwherethehydrogentheypurchaseisproduced.Mostimportantly,itwilldocumentthequantityofcarbondioxideemissionsassociatedwiththeproductionofeachtonneofhydrogen.Figure11:CostbreakdownofhydrogenproductionfromsteammethanereformingwithCCSunderahightechnologyscenarioGasElectricityRemainingoperationandmaintenancePlantcapitalBalanceofplantCCS00.501.001.502.00202120302050Productioncosts($perkg)Year69LOWEMISSIONSTECHNOLOGYSTATEMENT2021HydrogenEnergySupplyChainProjectTheHydrogenEnergySupplyChain(HESC)Projectisaworld-firstcollaborationbetweenAustraliaandJapan.ThisinnovativeprojectwillproduceandtransportliquefiedhydrogenfromtheLatrobeValleyinVictoriatoKobeinJapan.Thisisthefirsttimethatliquefiedhydrogenwillbetransportedbetweencontinents.Thepilotinvolves:creatinghydrogengasbygasifyingLatrobeValleybrowncoaltransportingthegastothePortofHastings,whereitisliquefiedshippingtheliquefiedhydrogentoKobe.ThepilotstartedoperationsinMarch2021.ThefirstshipmentofhydrogentoJapanisexpectedtooccurbetweenOctober2021andMarch2022.Ifthepilotissuccessful,then,subjecttoestablishinganofftakeagreement,thenextphaseofHESCwillbeacommercial-scalefacility.Thisfacilitywillusecarboncapture(atahighcapturerate)andstoragetoproduceclean,economicallyviablehydrogenfromcoal.HESCissupportedbyindustrypartnersandgovernmentsinbothcountries.AsthemostadvancedcoalgasificationwithCCSprojectinAustralia,HESCislikelytobethefirstabletomeetthestretchgoalforthistypeofhydrogenproduction.Ultralow-costsolarStretchgoal:solarelectricitygenerationat$15perMWhPotentialforultralow-costsolarinAustraliaUltralow-costsolarislikelytodeliversignificantcostreductionsforcleanelectricity.Thiswillbenecessarytounlocktheeconomic,employmentandabatementpotentialforcleanhydrogen,lowemissionssteelandaluminium,andelectricalenergystorageforfirming.Low-costelectricitywillalsobeimportantforoperatingcompressorsusedinCCS.Ultralow-costsolarwillalsoreducecostsforelectrificationofothersectorssuchastransport,buildingsandindustry.DrivingthepriceofcleanelectricitylowerwillhelpAustralianindustry,manufacturersandotherbusinessesstayinternationallycompetitivewhilereducingemissionsandsupportingthewidereconomy.DeploymentpathwaysandcostdriversSolarmoduletechnologyhasexhibitedthemostrapidcostdeclineofanylowemissionstechnologyinrecenttimes,fromanaveragewholesalemodulesellingpriceofUS$4.12perwattin2008toUS$0.17perwattin2020.Thisrepresentsa96%costreductionover12years.40Enhancingthemoduleefficiencyfromthecurrentvalueofabout22%toabout30%overthenextdecadewillbeessentialfordrivingdownthecostofsolarelectricitygeneration(Figure12).Assumingcontinuationofthecurrentlowfinancingcosts,and25-yearservicelifeofthemodules,higherefficiencywilldirectlycontributetolowerlevelisedcostsofelectricity(LCOE).40GreenM2021,SolarPriceForecasts&ImplicationsforAustralia,accessed25August202170LOWEMISSIONSTECHNOLOGYSTATEMENT2021AchievingimprovedmoduleefficiencywillrequirefurtherR&Dintomanyaspectsofsolarcelldesign.Thisincludesthetypeofdopingofthesiliconinthecells,thecellstructure,andthedevelopmentoftandemsolarcellsinwhichtheuseoftwoormorephotovoltaiclayersbettermatchesthespectrumofsunlight.Candidatesfortheadditionalphotovoltaiclayersincludeperovskitesandkesterites.Furtherreductionsintheinstalledcostofsolarwillcomefromreducingthebalanceofsystemcosts.Overthepast10years,asmodulecostshavedeclined,thefractionrepresentedbythebalanceofsystemcostshasincreasedfromabout50%oftheinstalledcostin2010toabout70%,andthusisakeytargetforfurtherreductions.Keyopportunitiesforbringingdownbalanceofsystemcostsinclude:loweringthecostofconstructionmaterialsbyusinglessorusingcheapermaterialsincreasingthesolarmodulesizeincreasingthecellandmoduleefficiencyincreasingthescaleofsolarfarmslowercostinvertershighthroughputdeploymentmethodologies.Achievementofthe$15perMWhstretchgoalwillbeunderpinnedbytheARENASolar303030initiative’sgoaltoachieve30%moduleefficiencyand30centsperinstalledwattby2030.ARENAwillbuildonitshistoricinvestmentinAustraliansolartechnologydevelopmentanddeploymenttoshapetheR&Dpush,throughfundingstrategicprojectinitiatives.71LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure12:Installedcostofsolarelectricitygeneration0.001.002.003.004.00BalanceofsystemModules2030Goal2020Actual2010ActualYear$4.00perwatt$1.00perwatt$0.30perwatt75%70%Installedcost($perwatt)EnergystorageStretchgoal:electricityfromstorageforfirming(availableondemandforeighthours)atunder$100perMWh.PotentialforenergystorageinAustraliaEmissionsfromelectricityinAustraliahavebeenfallingsince2016asmorerenewablegenerationentersthemarket.Almostallnewelectricitygenerationcapacityinthepastfewyearshascomefromsolarandwind.Australiahasthehighestsolarcapacityperperson(686watts)intheworld.41Italsohasthehighestcombinedwindandsolarcapacityperperson(1054watts)ofanycountryoutsideEurope.42CapturingthefullpotentialofAustralia’srenewableenergyresourcesrequiresenergystoragetechnologies.Thesetechnologiesstoreelectricalenergyduringtimesofpeaksupplyanddispatchitondemand.Dependingonthetechnology,theymayalsoprovidearangeofessentialsystemsecurityservices.Increasedelectricitygenerationfromsolarandwind,combinedwithgrid-scaleenergystorage,isessentialfordecarbonisingotheremissions-intensivesectorsliketransport,industrialprocessesandbuildingheating.Electricalenergystorageisoneofseveralapproachesforbalancingelectricitysupplyanddemand.Otherpossibleapproachesare:overbuildingvariablerenewableelectricitycapacity(withexcessenergy‘spilled’orusedtoproducecleanhydrogen)buildingmoretransmissionbetweenstatesandrenewableenergyzonesbuildingpeakingcapacity,usedtofillgenerationgaps,suchasgaspeakinggenerationwithpotentialhydrogenfuelblendingaheadof100%hydrogenfuel41InternationalRenewableEnergyAgency2021,RenewableCapacityStatistics2021,accessed5August202142InternationalRenewableEnergyAgency2021,RenewableCapacityStatistics2021,accessed5August202172LOWEMISSIONSTECHNOLOGYSTATEMENT2021demandresponse,whereenergyusersareincentivisedtoreducetheirenergyuseduringpeakdemandperiodsbuildinglow-emissionsdispatchablecapacity,forexample,AllamCyclegenerationwithCCS,orsmallmodularreactors.Acombinationoftheseapproachesisexpectedtoresultinthelowestsystemcost,withtheoptimalmixdetermininghowmuchstorageisrequired.Australia’sexistingthermalgenerationfleetwillcontinuetoplayanessentialroleinprovidingaffordableandreliablepowerinthedecadesahead.Themostpressingneedforstorageisfordurationsofseveralhours,suchasforstoringsolarenergyinthemiddleofthedaytouseintheevening.43Grid-scalebatteriesarethemostcost‑effectivestoragetechnologyonthistimescaleandwillbethemainstoragetechnologyused.Inthelongerterm,asmoresolarandwindisaddedtothegrid,longerdurationstorage,knownas‘deepstorage’,willbeneededforon-demanddispatchforintervalsofdaysorweeks,to:manageinfrequentweathereventsthatlastfordaysorweekscoverseasonalshortfalls.Thegovernmentisalreadyinvestinginpumpedhydroprojects,includingSnowyHydro2.0andBatteryoftheNation,whichwillprovidedeepstorageathighcapacityandlongduration.CoordinatedinvestmentfromARENAandtheCEFCwillunlocknewandemergingdeepstoragetechnologies.Anexampleishydrogenstorage,whereelectricityisusedtomakehydrogenwhenrenewablesareabundant.Thehydrogen,isthenstoredforweeksormonthsandusedtogenerateelectricitywhenrenewableelectricityisscarce.Deployingdeepstoragetechnologiescould:complementhydrogenhubinfrastructureprovideenergysecurityforhigh-useindustrialandregionalareas(aswellassupportingtheNationalElectricityMarket)providedual-purposestoragefacilitiesforhydrogenexport.Therightregulatoryandmarketlandscapewillencourageinvestmentindeepstorage.Aspartofitspost-2025electricitymarketdesign,theEnergySecurityBoardhasprovidedadviceonchangestotheNationalElectricityMarkettofacilitateinvestmentintherightmixofresources,includingdispatchablestoragecapacity.ToalargeextentthiswillbeachievedthroughtheRetailerReliabilityObligation.Deepstoragewillbeexaminedfurtherinthe2022LowEmissionsTechnologyStatement.43CSIRO2017,LowEmissionsTechnologyRoadmap,accessed9August202173LOWEMISSIONSTECHNOLOGYSTATEMENT2021DeploymentpathwaysandcostdriversAnevolvingmixofstoragetechnologiescouldbeintegratedintothemarkettoprovidesystemsecurityandreliability(Figure13).Thesetechnologiesprovidedispatchablecleanelectricityoverdifferentdurations.Lithium-ionbatterieswilllikelybethemainstoragetechnologytomanagedailyshortfallsinanelectricitysystemdominatedbysolarandwindgeneration.Figure13:UtilityscaleenergystoragetechnologiesLithiumIonBatteriesLi-ionbatterypack(containerisedandclimatecontrolled)BatterycontrolsystemHydrogenstorageStorageIonexchangemembraneStorageupperreservoirpumppumpinggeneratinglowerreservoircontrolstationElectrolyser12HydrogenstorageFuelcellsPumpedhydro3Flowbattery4GridsolarandwindelectricityEndusersofﬁrmedelectricityInterconnectionInverterandConverterElectronicsturbineWater74LOWEMISSIONSTECHNOLOGYSTATEMENT2021Lithium-ionbatteriesLithium-ionbatteriesarethecheapestformofgrid-scalebatterystoragecurrentlyavailable.Costsareexpectedtofallfurtherthankstomanufacturingscaleupdrivenbytherapidlygrowingelectricvehiclesmarket.Underahightechnologyscenario,thecostofelectricityfromstorageforlithium-ionbatteriesisexpectedtodeclinefrom$170perMWhin2021tobelow$100perMWhoveraneight-hourdurationasearlyas2025.Thiscostreductionisduetoimprovedcellchemistries.Thecostofbatterycellsismainlydrivenbyoverseasdevelopments.However,domesticengineering,procurementandconstructioncostsdependonlocaldemand.Australiacanreducethesecostsbysupportingscaleupofbatteryinstallationsandlearningbydoing.OtherstoragetechnologiesAstheneedfordeepstoragegrows,otherbatterytechnologieslikezincbromidebatteriesmayplayamoreimportantrole.Cleanhydrogenmaybecomeaviableoptionforseasonalstoragetobalancerenewablegeneration.Hydrogencanbeusedinfuelcells,orinturbinestogenerateelectricity.Solarthermalenergyisanotherstoragetechnologythatcanprovidedeepstorageorbeusedforhigh-temperatureindustrialprocessheatapplications.Thesetechnologieswillcomplementexistingpumped-hydroenergystorageandgas-firedelectricitygeneration,andcouldbecomecheaperastheirscaleandefficiencyincreases.Futurestatementswillmonitorthedevelopmentofemergingstoragetechnologies.InnovativebatterytechnologiesZincbromidebatteriesofferanumberofadvantagesoverotherstoragetechnologies.Theycanbedischargedcompletely,arelong-lastingandtheyarefireproof.Inaddition,unlikesomeotherbatterymaterials,zincandbrominearecheapandreadilyavailablethroughouttheworld.AustralianinnovatorsarepositioningAustraliatoplayanimportantroleinabattery-poweredworld.In2021Australia’sRedflowmadeitsbiggesteverflowbatterysaletoabioenergyplantinCalifornia.ThedealiswortharoundUS$1.2milliontotheQueenslandcompany.Anaergia’sRialtoBioenergyFacilityinSanBernadinowillinstallnearly200ofRedflow’s10kWhzincbromidebatteriesinamicrogridtostorebioenergyfromtheRialtoplantanddischargeitintotheelectricitygridwhendemandpeaksintheafternoonandevening.Sydney’sGelionTechnologieshasre-imaginedtheinternalchemistryofthezincbromidebatterytoimplementanon-flowformat.BasedonresearchattheUniversityofSydney,Gelion’sbatteriesstoreenergyusingapatentedgel.Thegelenablesgreaterefficiencythroughenhancediontransport,leadingtoincreasedbatterylifeanddecreasedchargingtime,andallowsthebatterytobehighlyscalableandportable.Gelion’spatentedgelchemistryalsoreducescomplexity,priceandservicingcosts,whilemaintainingthefireproofandhightemperaturesafetycharacteristicsaswellastherecyclabilityofzincbromidechemistry.Gelion’sbatteryformatandmethodofconstructionareverysimilartoleadacidbatteries,enablingGeliontopartnerwithexistingmanufacturersworldwideforlowcostproduction.75LOWEMISSIONSTECHNOLOGYSTATEMENT2021LowemissionsmaterialsSteelandaluminiumproductionaccountsforaround40milliontonnesCO₂-eofdomesticemissionseachyear(approximately8%ofAustralia’sannualemissions).44Likecleanhydrogen,lowemissionsmaterialscouldseeAustraliaexportrenewableenergyasembodiedenergy.45ToproducelowemissionsmaterialsinAustralia,weneedlowcost:firmedrenewableelectricitycleanhydrogen.LowemissionscementisanemergingtechnologythatcouldhelpaddressAustralia’semissionschallenges.Itwillbeconsideredforfutureprioritisationasalowemissionsmaterial.LowemissionssteelStretchgoal:lowemissionssteelproductionunder$700pertonne(basedonmarginalcost).46PotentialforlowemissionssteelinAustraliaAustraliaonlyproduces0.3%oftheworld’sprimarysteel.Butitistheworld’slargestexporterofironore,with53%oftheglobalexportmarket.47Australianindustryhasacompetitiveadvantagetocaptureagreatershareofthesteelvaluechain.Exportingupstreammaterialforsteelproductioncouldalsoprovidejobsinregionalareas.Potentialexportsinclude:ironoreminedwithzeroemissionsequipmentandtransportedonzeroemissionstrainsandshipsvalue-addedproductslikebeneficiatedoresandhotbriquettediron.Theseexportswillhelpdecarboniseglobalsteelsupplychainsandreduceglobalemissions.44DepartmentofIndustry,Science,EnergyandResources2020,NationalGreenhouseAccounts2019,accessed10August202145AnalysisbyMcKinsey&CompanypreparedfortheDepartmentofIndustry,Science,EnergyandResources.46Inthisstatement,thestretchgoalforlowemissionssteelhasbeenrevisedfromtheaveragemarketpriceofhotrolledsteelintheLondonMetalsExchange($900pertonne)totheaveragecostofproduction($700pertonne).Theproductioncostdoesnottakeintoaccountthecostofcapital.Materialchangesinrawmaterialcostsmayrequirethestretchgoalstobeupdatedovertime.47AnalysisbyMcKinsey&CompanypreparedfortheDepartmentofIndustry,Science,EnergyandResources.76LOWEMISSIONSTECHNOLOGYSTATEMENT2021Deploymentpathwaysandcostdrivers48Lowemissionssteelcanbeproducedby:addingCCStothetraditionalblastfurnaceandbasicoxygenfurnaceprocess49directreductionofironandanelectricarcfurnace(DRI-EAF),fuelledbynaturalgas(withCCS)orcleanhydrogen.Moltenoxideelectrolysiscouldalsoproducelowemissionssteelifitcanbeprovenatcommercialscale(Figure14).50Figure14:LowemissionssteelproductionmethodsironoremetallurgicalcoalsinteringplantblastfurnacebasicoxygenfurnacesinterpigironironoreironoreCCSCCSBlastfurnace,BasicOxygenFurnace+CCSpelletisingprocessdirectreductionplantmoltenoxideelectrolysisplantelectricarcfurnaceironoreDirectreducediron(DRI)pelletsrenewableelectricityDirectreductionofironwithelectricarcfurnace,usinghydrogenMoltenoxideelectrolysiselectricarcfurnaceliquidironrenewableelectricityrenewableelectricity48Costbreakdownsarenotincludedforlowemissionssteelduetothecommercial-in-confidencenatureofinformationandthelimitednumberofsteelmakersinAustralia.49Figure14showstheprocesscommencingwithironorefines.50EnergyTransitionsCommission2018,Reachingnet-zerocarbonemissionsfromhard-to-abatesectorsbymid-century,accessed5August202177LOWEMISSIONSTECHNOLOGYSTATEMENT2021DRI-EAFcouldbecompetitiveonamarginalcostbasisasearlyas2030,ascleanhydrogenandrenewableelectricitybecomecheaper.However,capitalcostsarethemainbarriertoDRI-EAFsteelplantsinAustralia.Inthenearerterm,steelproducerswilllikelyreduceblastfurnaceandbasicoxygenfurnaceemissionsbyimprovingenergyefficiency.Earlierstagesofthesteelsupplychainmayoffermoreimmediateopportunities.Australia’sironoreexportscouldsupplyfutureglobalDRI-EAFmarketsifweinvestinnewprocessinginfrastructure.Thiscouldinclude:processinghematiteoreintoahighergradeproductexpandingmagnetiteoreproductionandprocessing.AustraliacouldalsoproducehotbriquettedironthatisgloballycompetitivewithscrapsteelandotherEAFfeedstocks.Ironorerequiresadditionalprocessing(beneficiation)foruseinDRIandhotbriquettedironproduction.Researchbodies,includingCSIROandtheHeavyIndustryLow-carbonTransition(HILT)CooperativeResearchCentre,arelookingatwaystoproducelowemissionsfeedstock.Thecostofbeneficiation,combinedwithuncertainglobalpricing,mayencourageAustraliancompaniestouselowemissionstechnologiesthatcanprocessexistingoreswithoutfurtherbeneficiation.Thegovernmentwillwatchthedevelopmentofthese,includingthepotentialformoltenoxideelectrolysis.LowemissionsaluminiumStretchgoal:lowemissionsaluminiumproductionunder$2,200pertonne(basedonmarginalcost).51PotentialforlowemissionsaluminiumWhileAustralia’sshareofglobalaluminiumproductionismodest(lessthan3%),wearetheworld’slargestproducerofbauxite.Mostofourbauxiteisprocessedintoalumina,andwearetheworld’slargestaluminaexporter.52Lowemissionsaluminiumisexpectedtobecomethechoiceofinternationalpurchasers.53Australiaiswellplacedtoreduceemissionsthroughoutthesupplychain,includingaluminarefiningandaluminiumsmelting(Figure15).Wecouldmaintainourworldleadingpositionbytransitioningtobecometheworld’slargestexporteroflowemissionsalumina.51Inthisstatement,thestretchgoalforlowemissionsaluminiumhasbeenrevisedfromtheaveragemarketpriceintheLondonMetalsExchange($2,700pertonne)totheaveragecostofproduction($2,200pertonne).Theproductioncostdoesnottakeintoaccountthecostofcapital.Significantchangesinrawmaterialcostsmayrequirethestretchgoalstobeupdatedovertime.52AustralianAluminiumCouncil,AustralianIndustry,accessed5August202153DepartmentofIndustry,Science,EnergyandResources2021,ResourcesandEnergyQuarterlyMarch2021,accessed12May202178LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure15:HowlowemissionsaluminiumisproducedbauxiteBauxiteminingAluminareﬁningAluminiumsmeltingelectrolysisminingrenewableelectricitydigestion,clariﬁcation,precipitation,calcinationaluminiumingotsaluminainertanodeDeploymentpathwaysandcostdriversAluminiumsmeltingAluminiumsmeltingisthemostenergy-intensiveandemissions-intensivestepofaluminiumproduction.TwentymilliontonnesCO₂-ewasproducedfromaluminiumsmeltingin2020.Usingrenewableelectricitywouldeliminate90%oftheemissionsfromAustralia’saluminiumsmelters.Thecaveatisthattherenewableelectricitysupplymustbefirmedbecausealuminiumsmelterscannottoleratedipsoroutagesintheelectricitysupplyofmorethananhourortwo.Thelast10%canbeeliminatedbyreplacingthecarbonanodesconsumedduringsmeltingwithinertanodes.Lowemissionsaluminiumproductioncouldbecostcompetitiveonamarginalcostbasiswithcurrentaluminiumproductionmethodsassoonas2035.Thiswouldbedrivenbysubstantialcostreductionsinrenewableelectricityandelectricitystorage(Figure16).AluminarefiningAluminarefiningproduced14milliontonnesCO₂-eofdomesticemissionsin2020.Aluminarefiningofferssignificantopportunitiestoreduceemissions.Cleanelectricityorcleanhydrogencouldbeusedinsteadoffossilfuelstoproducesteamandheat.WithsupportfromARENA,theindustryisinvestigatingwhetherthesetechnologiescanbeusedatAustralianrefineries.Butclean,cheap,reliableelectricityisessentialtomakethemeconomicallyviable.Australiaisalreadyamajoraluminaexporter.Seizingtheseopportunitieswillhelpuscapturefuturemarketsforlowemissionsaluminaandaluminium.79LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure16:Lowemissionsaluminiumcostbreakdownunderahightechnologyscenario05001,0001,5002,0002,5003,000¢Alumina¢Electricity¢Anodematerials¢Operation&maintenance205020302021Year$pertonneCarboncaptureandstorageStretchgoal:CO₂compression,hubtransportandstorageforunder$20pertonneofCO₂.54PotentialforCCSinAustraliaLarge-scaleCCSdeploymentinAustraliawouldhelpdecarboniseheavyindustriesandproducecleanhydrogen.Australia’scompetitiveadvantageinCCScomesfromourgeologicalstoragebasins,manyofwhichareclosetoindustriesthatemithighlyconcentratedstreamsofpureCO₂.TheGippsland,Surat,andCooperBasins,togetherwiththePetrelandBarrowsub-basinshostcarbonstoragesitesatanadvancedstageofdevelopment,andeachhavegenuineindustryinterestandsupport(Figure17).Thecombinedstoragecapacityatfourofthesekeylocations(Gippsland,Surat,andCooperBasins,andthePetrelsub-basin)isover20billiontonnes.5554ThestretchgoalassumesCO₂istransportedwithinahubdistanceoflessthan100km.55EstimatesbyGeoscienceAustralia.80LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure17:ProspectiveCO2storagesitesinAustraliaPetrelsub-basinBarrowsub-basinCooperBasinGippslandBasinSuratBasinPloverandElangformationsToolacheeformationPipelineroutesaresourcedfromtheGPinfopetroleumdatabase.PrecipicesandstoneLatrobegroupGorgonMoombaAdvancedCOstorageCOstorage–2050CCSprojectlocationGaspipelineProposedpipelineCarbonNetCTSCoTheAustralianGovernmentisundertakingfurtheranalysistoinformAustralia’spotentialtostoreCO2inourbasinsasthisvarieswidelydependingonbasincharacteristicsandinjectionrates.AnalysisbytheIntergovernmentalPanelonClimateChangeandtheInternationalEnergyAgencyconcludedthattheParisgoalswon’tbemetwithoutgeologicalcarbondioxidestorage.56TheUSandUKgovernmentsareinvestingincarboncapture,useandstorage(CCUS)technologiestosupportbroaderdecarbonisationefforts.Thegovernmentrecognisestheimportanceofcarboncaptureanduse(CCU)technologiesincomplementingCCS,supportingnewindustriesandreducingemissions.CSIRO’sCO₂UtilisationRoadmapidentifiesopportunitiesinAustralia’sfoodandbeveragesindustry,thecreationoflowemissionsbuildingproductsandmaterials,andtheexportoflowemissionschemicalsandfuels.5756IntergovernmentalPanelonClimateChange2019,MitigationPathwaysCompatiblewith1.5°CintheContextofSustainableDevelopment,accessed9August2021;InternationalEnergyAgency2019,ExploringCleanEnergyPathways:TheroleofCO₂storage,accessed10August202157CSIRO2021,CO₂UtilisationRoadmap,accessed24August202181LOWEMISSIONSTECHNOLOGYSTATEMENT2021CCUapplicationsThroughits$50millionCCUSDevelopmentFund,theAustralianGovernmenthasinvestedinseveralinnovativeprojectstocaptureprocessemissionsandunlockcommercialvalueandlargepotentialmarkets,including:$14.6milliontoMineralCarbonationInternational.ThecompanyisbuildingamobileplantshowcasinghowCO₂canbecapturedandusedtoproducemanufacturingandconstructionmaterials,includingcomponentsofcementandconcrete.Theplantwillcaptureupto3,000tonnesofCO₂peryearfromanindustrialfacilityinNewcastle.ThepilotprojectwilldemonstratethecommercialpotentialofCCUtechnology.$2.4milliontoBoraltodevelopacheaptechnologytocaptureanduseCO₂.TheprojectwilluseCO₂toincreasethequalityandmarketvalueofconstructionmaterialslikerecycledconcrete,masonryandsteelslagaggregates.TheAustralianGovernmentisinvestingover$250millionfrom2021to2030to:establishCCUShubssupportresearch,developmentandcommercialisationofCCUStechnologies.Thisbuildson$50millionCCUSDevelopmentFundannouncedinthe2020-21Budget.CCShubsarelocationswithaclusterofrelevantindustries.Theyencouragelarge-scaledeploymentofCCSbysharinginfrastructure,helpingreducecostsforindustry.DeploymentpathwaysandcostdriversThecostofCO₂transportandstoragedependson:distancetoasuitablereservoirtransportmodegeologicalstoragecharacteristics.ThecostofCO₂compression,hubtransportandstoragecouldbecloseto$20pertonne,ifhighvolumesofconcentratedstreamsofCO₂areclusteredwithin100kmofwell-developedreservoirs.58FacilitiesthathavestarteddevelopingprojectscouldimplementCCSasearlyas2025.59Storagecostsvarysignificantlybasedonreservoircharacteristics,including:thelevelofexistinggeologicaldata,andextentofadditionalappraisaldrillingrequiredgeologicalcomplexity,suchaspermeabilityandporositydepthofformation,whichaffectsconstructioncosts.Storagecostsforoffshorereservoirsaremoreexpensivedueto:higherexplorationcostsmorecomplexengineeringthecomplexityofservicingoffshoreoperations.58AnalysisbyMcKinsey&CompanypreparedfortheDepartmentofIndustry,Science,EnergyandResources.59Subjecttosecuringofftakeagreementsanddevelopmentapprovals.82LOWEMISSIONSTECHNOLOGYSTATEMENT2021ApplicationsforCCSDeploymentofCCSiscriticalinapplicationslikecementproduction,wheretherearefewothersolutionstocompletelyeliminateemissions.OtherpromisingapplicationsforCCSare:CO₂removalinnaturalgasprocessingcleanhydrogenfromfossilfuelsAllamcycleelectricitygenerationfromnaturalgas.Thisisdueto:highcaptureefficienciesatrelativelylowcost,duetoconcentratedstreamsofCO₂thepotentialtolocatetheseapplicationsinCCShubsnearageologicalbasin.Inthelongterm,providinglong-termstorageofCO₂forDirectAirCaptureandRemovalisanotherpromisingapplicationofCCS.83LOWEMISSIONSTECHNOLOGYSTATEMENT2021SoilcarbonStretchgoal:soilcarbonmeasurementunder$3perhectareperyearPotentialforsoilcarboninAustraliaIncreasingorganiccarbonconcentrationsinsoilcanoffsetemissionsfromhard-to-abatesectorslikeagriculture,industryandaviation.Soilcarbonprojectscangenerateoffsetsthatprovideadditionalincomeforfarmerswhileimprovingagriculturalproductivityandsoilresilience(Figure18).Australiaisaworldleaderinsoilcarbonmeasurement.Butsoilcarbonstocksvarywithsoiltype,climateandmanagementpractices,evenwithinasinglepaddock.Withcurrentinformation,itisdifficulttopredicttherateofsoilcarbonuptakeforagivenlandscapeandmanagementpractice.Understandingthisvariabilityandaccuratelymeasuringsoilcarbonconcentrationcurrentlyrequiresexpensiveandlabour-intensivephysicalsampling.Technologiesthatmakeitcheaperandeasiertomeasuresoilcarbonconcentrationwillencouragemoresequestrationactivities.Cheapersoilcarbonmeasurementwillalsosupportbest-practicelandmanagementandnationalsoilcarbonsequestrationstrategies.84LOWEMISSIONSTECHNOLOGYSTATEMENT2021Thegovernmentisacceleratingthedeploymentofsoilcarbonmeasurementtechnologiesbyfundingresearchanddevelopment:The$50millionNationalSoilCarbonInnovationChallengewillidentifyandfast-tracklow-cost,accuratetechnologicalsolutionsformeasuringsoilorganiccarbon.The$8millionSoilCarbonDataProgramsupportspartnershipsbetweenscientists,industryandlandholderstodevelopandvalidatemeasurementapproaches.The$215millionNationalSoilStrategyishelpingfarmersmonitor,understandandmakebetterdecisionsabouttheirsoils’health,productivityandsequestrationpotential.TheCEFCisinvestingintheagriculturaltechnologysectortobuildtheindustry’scapabilities.TheCSIRO,ruralresearchanddevelopmentcorporations,andtheCRCforHighPerformanceSoilsareinvestinginagriculturalinnovations,includingsoilcarbonmeasurement.TheERFalsoprovidesincentivesforsoilcarbonsequestration.TohelpERFprojectsgetstarted,paymentsofupto$5,000areavailabletohelpwithupfrontcostsofsoilsampling.TheCleanEnergyRegulatorisalsodevelopinganewsoilcarbonERFmethodthatletsprojectssupplementdirectsamplingwithmodel-basedapproaches.DeploymentpathwaysandcostdriversFigure18:SoilorganiccarbonisabalanceofcarboninputsandoutputsAtmosphericCO2DecompositionSoilfaunaandmicrobesHumusRespirationPhotosynthesisPlantrootsPlantrootsSoilorganiccarbonismadeupoflivingorganicmattersuchasroots,faunaandmicrobes,aswellasorganicmatteratvariousstagesofdecomposition,includingdeadroots,humusandcropresidues.85LOWEMISSIONSTECHNOLOGYSTATEMENT2021Technologiestomeasuresoilorganiccarbonstocksinclude:physicalmeasurementmodellingremotesensing.Themostpracticalpathwaytolowcostmeasurementwillrequireanappropriatemixtureofthesetechnologiesfortheenvironmentalandlandmanagementcontext.PhysicalmeasurementLabour-intensivefieldsamplingfollowedbylabanalysisiscurrentlythestandardsoilcarbonmeasurementmethod.Butalternativein-fieldanalysisinvolvingtechnologiessuchasinfra‑redscanningarebecomingmoreaccessible.Developingtoolsthatusethesetechnologieswillsignificantlylowerthecostofphysicalmeasurement.ModellingandremotesensingModellingandremotesensingtechnologiescanbeusedtoestimatesoilcarbonconcentrations.Asthesenon-contactapproachesimprove,theneedforphysicalmeasurementtosupportprecisemeasurementwillreduce.Achievingthestretchgoalassumesthat,withadvancesinmodellingandremotesensing,reliablemeasurementwillbepossiblewithphysicaltestingoccurringasinfrequentlyasonceevery10years.Assumingearlydeploymentofmodellingandremotesensingtechnologies,thecostofsoilcarbonmeasurementcouldbereducedtolessthan$3perhectareperyearbefore2030.Thestretchgoalcouldbeachievedasearlyas2025forlandareasgreaterthan2000hectares.86LOWEMISSIONSTECHNOLOGYSTATEMENT202187LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australia’sresourcesopportunityinanewenergyeconomyTheTechnologyInvestmentRoadmap’smissionistoidentifyandincentivisethedevelopmentanddeploymentoftechnologiesthatreduceemissionsorsequesterhard-to-abateemissions.Theglobaldeploymentofzeroemissionselectricityandhydrogen,lowemissionsmaterialsandenergystoragesolutionswilldependonlarge-scaleproductionoflowemissionstechnologiessuchasbatteries,electrolysers,fuelcells,solarpanels,electricvehicles,electricmotorsandwindturbines.These,inturn,willrequiretheexpansionofminingandprocessingtoprovidethematerialsfromwhichtheywillbebuilt.Thischapterisacomplementtothemainthemeoftheroadmap,togiveconsiderationtotheresourcesthatarerequiredtosupporttheglobaltransitiontoanewenergyeconomy.Itidentifiestheincreaseddemandformetalsandmineralsrequiredtoproducelowemissionstechnologies,andconsiderstheopportunitiesforAustraliatherein.Australiahaslargereservesofrelevantmetalsandminerals,including:lithiumnickelcopperuraniumcobaltmanganesevanadiumrareearthsgraphitebauxite.60Wealsohaveaworld-leadingmining-equipmenttechnologyandservices(METS)sectorandareclosetothegrowingIndo-Pacificmarket.ThismeansAustraliaiswellpositionedtoexpandourresourcesandenergycommodityexportmarketasdemandsurges.60DepartmentofIndustry,Science,EnergyandResources2021,GlobalResourcesStatement,accessed5August202188LOWEMISSIONSTECHNOLOGYSTATEMENT2021Bycarefullymanagingenvironmentalandsocialimpacts,Australiacanbuildonexistingindustriesandcreatenewones.TheseindustrieswilldevelopalongsideAustralia’sexistingenergyandresourceindustriessuchascoalandliquefiednaturalgas(LNG),whicharemajorcontributorstooureconomy.Coalandgaswillcontinuetohaveanimportantroleintheworld’senergymixforyearstocome.61InJune2021,theAustralianGovernmentreleasedAustralia’sGlobalResourcesStatement,amilestoneofitsGlobalResourcesStrategy.TheGlobalResourcesStatementpromotesAustralia’svisiontofurtherstrengthenourresourcesandenergysectorsbydiversifyingourexportmarkets.Thegovernmentisalsoensuringthecompetitivenessofourcriticalmineralsexportsanddownstreamprocessingcapabilitiesthrough:theCriticalMineralsFacilitationOfficetheModernManufacturingStrategy.FuturedemandformineralsandlowemissionsfuelsTheInternationalEnergyAgency(IEA)hasconductedmodellingofemissionsreductionsusingtwokeyscenarios.TheStatedPoliciesScenariosetsouttheoutcomeofexistingpolicyframeworksandtoday’sannouncedpolicyintentions,whereastheSustainableDevelopmentScenariofocussesonwhatwouldberequiredinatrajectoryconsistentwithmeetingtheParisAgreementgoals.TheIEApredictedthatundertheStatedPoliciesScenario,mineralrequirementsforlowemissionstechnologieswilldoubleby2040,andcouldalmostquadrupleinthesametimeperiodundertheSustainableDevelopmentScenario(Figure19).62TheIEAalsoprojectsincreasingdemandforlowemissionsfuels,includinghydrogen,anduraniumfornuclearelectricity.6361InternationalEnergyAgency2020,WorldEnergyOutlook2020,accessed5August202162InternationalEnergyAgency2021,Theroleofcriticalmineralsintheenergytransition,accessed5August202163InternationalEnergyAgency2021,WorldEnergyOutlook2021,accessed21October202189LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australia’sexportpotentialFigure19:TotalmineraldemandtomanufacturelowemissionstechnologiesunderIEA’sStatedPoliciesandSustainableDevelopmentScenarios20402030204020302020051015252030StatedPoliciesScenarioSustainableDevelopmentScenarioYearTotalmineraldemand(Mt)OtherlowcarbonpowergenerationNuclearEVsandbatterystorageElectricitynetworksHydrogenWindSolarPVThroughAustralia’sGlobalResourcesStrategy,thegovernmentisworkingtoexpandandstrengthenourresourcesexportmarkets.Thisincludesseekingnewtradingopportunitieswithpartnersinourregionthoughexistingbilateralrelationships,aswellasforgingnewconnections.Australia’snewenergytechnologiesandmineralsresourceswillbekeytofacilitatingtheglobalenergytransition.Weareareliable,responsibleandreadyplayertosupportourpartnerstoachievetheiremissionsreductiontargets.TheOfficeoftheChiefEconomistoftheDepartmentofIndustry,Science,EnergyandResourceshasanalysedAustralia’scompetitivenessintheevolvingglobalmarketandourpotentialexportrevenuesunderthescenariosofgradualandrapidtransitiontolowemissionstechnologies.64TheanalysisshowsthatAustraliaiswellpositionedtosupplyasignificantshareoftheglobaldemandforminerals,metalsandfuels,including:lithiumnickelcopperuraniumcleanhydrogenMineralsandmetalsLithiumLithium-ionbatteriesforelectricvehiclesandstationarystoragemayseedemandforlithiumincrease11-foldoverthenext30years.6564Analysisassumesrapiduptakeoflowemissionstechnologies,consistentwithanaveragetemperatureriselimitedto2°CintheIEA’s2020WorldEnergyOutlookSustainableDevelopmentScenario.65BloombergNewEnergyFinance202190LOWEMISSIONSTECHNOLOGYSTATEMENT2021Australiaistheworld’slargestlithiumproducerandhastheworld’ssecond-largestlithiumreserves.ChileandChinaarethenextlargestexporters,andAustralia’slithiumexportsarelargerthanthesumofboth.66Combinedwithcheapenergyandlargescaleprojectexpertise,ourlithiumreservesgiveAustraliaacompetitiveadvantageinquicklyscalinguplithiumproduction.67Underascenarioofgradualtransitiontolowemissionstechnologies,Australiacouldgrowitsestimatedannualrevenuefromlithiumexportsbymorethan12-foldon2020levelsto$14billionby2050.Underarapidtransitionscenario,annualrevenuecouldgrowmorethan17-foldto$19billionby2050.68Thiswouldamountto62%ofa$31billionglobalexportindustry.Australia’sannualrevenuecouldgrowfurthertoasmuchas$34billionby2050ifcurrenthighcommodityspotpricesaremaintainedandAustraliafurtherrefinesallthelithiumitproduces.69NickelNickel’sincreasingglobaldemandismainlyduetoitsuseintheproductionoflithium-ionbatteries.Demandfornickelisprojectedtoincreasefivefoldoverthenext30years.70Australiaistheworld’ssixthlargestproducerofnickelandhastheworld’ssecond-largestnickelreserves.Indonesia,thePhilippinesandRussiaarethethreelargestexportersofnickel.71Giventhelimitednickelreservesaroundtheworld,Australiaiswellplacedtocapturealargershareoftheglobalmarket.Australia’sannualnickelexportrevenueisprojectedtoincreasethree-foldto$12billionunderascenarioofgradualtransitiontolowemissionstechnologies,orfive-foldto$22billionby2050underarapidtransitionscenario.72Thelatterwouldmakeup15%ofa$150billionglobalexportindustry.Ifcurrenthighspotpricesweretopersistovertheoutlook,Australia’sannualrevenuecouldgrowtoasmuchas$31billionby2050.7366UnitedStatesGeologicalSurvey2021,MineralCommoditySummaries2021,accessed9August202167UnitedStatesGeologicalSurvey2020,MineralCommoditySummaries2020,accessed5August202168DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.Figuresareinreal2020dollarterms.69DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.Figuresareinreal2020dollarterms.70BloombergNewEnergyFinance202171UnitedStatesGeologicalSurvey2020,MineralCommoditySummaries2020,accessed5August202172DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.73DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.Figuresareinreal2020dollarterms.91LOWEMISSIONSTECHNOLOGYSTATEMENT2021CopperCopper’sconductivitymakesitessentialforthewiresandcomponentsin:electricitynetworksstationarystorageelectricvehiclessolarandwindpowergeneration.Australiahastheworld’ssecondlargestcopperreserves.74Australiaiscurrentlythethirdlargestexporterofcopper,afterChileandPeru.75Thealreadywidescaleofcopperuseacrossinfrastructureandtechnology,meansthatanygrowthincopperdemandstemmingfromlowemissionstechnologiesisnotexpectedtobeaslargeasthatforothermaterials.Additionally,duetohighrecyclingrates,increasesinthedemandforminedcopperislikelytobemoderate.Australiaisexpectedtoremaingloballycompetitive,withhigherexportvolumescompensatingforlowerexportprices.Underbothgradualandrapidtransitionscenarios,Australiacouldgrowitsestimatedannualrevenuefromminedcopperexportstoaround$8billionby2050.76Thiswouldamountto10%ofan$80billionglobalexportindustry.Ifcurrenthighspotpricesweretopersistovertheoutlook,Australia’sannualrevenuewouldgrowto$19billionby2050.77OthermineralsandmetalsAustraliawillcontinuetobeamajorexporterofironore,aluminaandaluminium.Demandforaluminiumwillgrowduetotheneedforlightweightmaterialinelectricvehiclesandthesupportstructuresforsolarpanels.78Australiaiscurrentlytheworld’slargestexporterofironore,withBrazilandSouthAfricabeingthenextlargest.79Largequantitiesofsteelwillberequiredforconstructionoflowemissionsfacilities.Asanexample,ithasbeen74GeoscienceAustralia2021,Australia’sIdentifiedMineralResources2020,accessed15October202175DepartmentofIndustry,Science,EnergyandResources2021,ResourcesandEnergyQuarterly,June2021,accessed9August202176DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.77DepartmentofIndustry,Science,EnergyandResources2021,OfficeoftheChiefEconomistanalysis.Figuresareinreal2020dollarterms.78DepartmentofIndustry,Science,EnergyandResources2021,ResourcesandEnergyQuarterly,June2021,accessed9August202179DepartmentofIndustry,Science,EnergyandResources2021,ResourcesandEnergyQuarterly,June2021,accessed9August202192LOWEMISSIONSTECHNOLOGYSTATEMENT2021estimatedthatsteelrepresentsupto80%ofallthematerialmassusedtoconstructawindturbine.80ThelargestglobalsteelexportersareChina,Russia,andJapan.81Australiacouldalsoseestronggrowthintheexportofrareearthelementslikecobalt,graphiteandvanadium.82FuelsTheIEApredictsthatnaturalgas,coalandoilwillbeanimportantpartoftheworld’sfuelmixformanyyears.83Inparticular,globalnaturalgasdemandisprojectedtoincreaseinthecomingyears.84AustraliaisanestablishedglobalsupplierofLNGandcoal.85Manyofourgasproducersandexportersareexploringsolutionstoreduceemissionsacrosstheirsupplychains.ThismeansAustraliaiswellpositionedtoremainasupplierofchoicefornaturalgas.Meanwhile,growingdemandforlowemissionsfuelscreatesthepotentialforourresourcessectortodiversifyourexportsbysupplyingcleanhydrogenanduranium.80POSCO2016,SteelSolutionsinWindPower,accessed1September202181WorldSteelAssociation2021,2021WorldSteelinFigures,accessed9August202182DepartmentofIndustry,Science,EnergyandResources2021,OutlookforSelectedCriticalMineralsinAustralia,accessed9August202183InternationalEnergyAgency2021,WorldEnergyOutlook2021,accessed21October202184InternationalEnergyAgency2021,WorldEnergyOutlook2021,accessed21October202185DepartmentofIndustry,Science,EnergyandResources2021,GlobalResourcesStatement,accessed5August202193LOWEMISSIONSTECHNOLOGYSTATEMENT2021AustralianIndustryEnergyTransitionsInitiativeSupportedbya$2millionARENAgrant,andconvenedbyClimateWorksAustraliaandClimate‑KICAustralia,theAustralianIndustryEnergyTransitionsInitiativeismadeupof16majorindustrialandfinancecompanies.Theyinclude:AustralianGasInfrastructureGroupBHPBlueScopeSteelBPAustraliaFortescueMetalsGroupRioTintoWesfarmersChemicalsEnergyandFertilisersWoodside.Itsgoalistoreducesupplychainemissionsinsomeofourmostimportant,buthardesttoabate,industrialsectors,including:liquefiednaturalgas,chemicals,steel,aluminium,andothermetalslikecopper,nickelandlithium.Thecompaniesareidentifyinghowtheirsectorscantransitiontonet-zeroemissions.Thegroup’searlyresearchshowsthatexistingoremergingtechnologiescanaddressalmostalloftheemissionsintheseindustries’supplychains.Bysharingknowledgeandcollaboratingonaction,thisinitiativewillhelpAustralia’sheavyindustriesbegloballeadersintheshifttoanet-zeroeconomy.94LOWEMISSIONSTECHNOLOGYSTATEMENT2021UraniumAlluraniumproducedinAustraliaisexported.Itusedasfuelfornuclearpowerplants.Nuclearpowercanhelpzero-emissionselectrificationbycomplementinghighlevelsofsolarandwindgeneration.TheIEAestimatesthatnuclearpowergenerationwillneedtodoubleoverthenext30yearstoachievenetzeroemissions.Attainmentofthistargetwillbedeterminedbypolicydecisionsamongcountriescurrentlyconsideringnuclearenergyprograms,aswellasbypotentialimprovementsinnuclearpowertechnology.Increaseddemandforuraniumwilllikelybedrivenbythedeploymentofsmallmodularreactors.Nuclearplantsneedarelativelysmallamountofuraniumtorun,sotheworld’sknownuraniumreservescanfulfiltheanticipateddemand.86Australiahasthelargestreservesofuranium,witharoundone-thirdoftheworld’suraniumreserves,andisthethirdlargestproducerafterKazakhstanandCanada.87Wealsohavemultipleminesunderrevieworindevelopment.ThismeansAustraliacanexpanditsmarketshareandexportvalue.Ourannualrevenuefromuraniumexportsisexpectedtoincreasefrom$0.8billionnowtojustunder$900millionby2050underagradualtransitionscenario,or$1.3billionby2050underarapidtransitionscenario.88Thelatteris13%ofa$10billionglobaluraniumminingindustry.CleanhydrogenCleanhydrogenandcleanammoniacanreduceemissionswhenenergyneedscan’teasilybemetbyelectricity.Australiaiswellplacedtobecomeahydrogensuperpower.Inarecentanalysis,WoodMacKenzieestimatedAustralia’shydrogenexportindustrytobebetween$70and$130billion(US$50–US$90billion)by2050.89Value-addingopportunitiesMostmineralshaveacomplexvaluechain.Theygothroughseveralstagesofprocessingandconversionbetweentheminesiteandthepointtheyareused.Eachstepsignificantlyincreasesthevalueoftheproduct.Forexample,itisestimatedthatin2025thegloballithiumminingproductionwillbeworth$26billion,comparedwiththerefiningandprocessingindustryworth$63billionandbatterypackassemblyindustryestimatedtobeworth$1.7trillion(Figure20).90Globalmineralprocessingandrefiningoperationsaregenerallyheavilyconcentratedandvulnerabletodisruption.Withincreasingconcernabouttherisksofgeographicconcentrationofsupplychains,Australiaofferssecurityandreliabilityforcustomerslookingtodiversifytheirsupply.86InternationalEnergyAgency2021,WorldEnergyOutlook2021,accessed21October202187NuclearEnergyAgencyandInternationalAtomicEnergyAgency2020,Uranium2020:Resources,ProductionandDemand,accessed9August202188InternationalEnergyAgency2021,NetZeroby2050,accessed9August202189WoodMacKenzie2021,Greenpivot:CanAustraliamasterthehydrogentrade90FutureBatteryIndustriesCRC2020,Li-ionbatterycathodemanufactureinAustralia–ascenesettingreport,accessed6September202195LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure20:ProjectedvalueoflithiumbatteryvaluechainMineandconcentrateIn2025:ReﬁneandprocessElectrochemicalproductionBatterycellproductionBatterypackassemblyAustraliahas0%of$550billionindustryAustraliahas0%of$1.7trillionindustryAustraliahas0%of$385billionindustryAustraliahas4%of$63billionindustryAustraliahas38%of$26billionindustryAustralia’sCriticalMineralsStrategyhighlightsourpotentialtoleadtheworldincriticalmineralexploration,extraction,productionandprocessing.91AccordingtotheFutureChargereportfromAccenture,developmentofmoreonshorematerialsprocessingandupstreambatteryproductionhasthepotentialtocreateover34,000jobsandcontribute$7.4billionannuallytoAustralia’seconomyin2030.92Inlightofthesestrategicadvantagesandopportunitiesforoureconomy,resourcestechnologyandcriticalmineralsprocessinghasbeenidentifiedasaNationalManufacturingPriorityunderAustralia’sModernManufacturingStrategy.The$1.3billionModernManufacturingInitiative,acentrepieceofthestrategy,willsupportthescalingupoflocaldownstreamprocessingandvalueaddingofcriticalminerals,aswellascommercialisingandmanufacturingcuttingedgetechnologiesthatdriveproductivityandsustainabilityoftheresourcessector.SovereignmanufacturingcapabilityinAustraliaAustraliaproducesmanyofthemineralsneededforbatteries,includingcobalt,manganeseandlithium.Combinedwithouroutstandingmanufacturingcapabilities,thismeansAustraliaiswell‑placedtomeettheworld’sincreasingdemandforbatterystorage.BasedinPerth,LithiumAustraliawantstoethicallyandsustainablysupplythegloballithiumbatteryindustry.Thecompanyusesproprietarytechnologiestomoreefficientlyextractlithium.Italsoproducescathodematerialsforbatteriesandisdevelopingawaytorecycleallthemetalsfromoldlithium-ionbatteries.Ontheothersideofthecountry,NSW’sEnergyRenaissancedesignsandmanufactureslithium‑ionbatteriesoptimisedforhotclimates.Thecompany’stough,flexible‘superStorage’platformusesaproprietarybatterymanagementsystemforbetterefficiency,safetyandsecurity.Allproductsaremadeatthe‘RenaissanceOne’advancedmanufacturinghubnearNewcastle.91DepartmentofIndustry,Science,EnergyandResources2019,Australia’sCriticalMineralsStrategy,accessed9August202192Accenture2021,FutureCharge–BuildingAustralia’sBatteryIndustries,accessed9August202196LOWEMISSIONSTECHNOLOGYSTATEMENT202197LOWEMISSIONSTECHNOLOGYSTATEMENT2021ImpactevaluationframeworkLETS2020committedtodevelopinganimpactevaluationframeworkfortheTechnologyInvestmentRoadmap.Theimpactevaluationframeworkwill:provideaclearandtransparentwayoftrackingandreportingontheroadmap’sprogressinformgovernmentdecisionstomaximisetheimpactofpoliciesandinvestmentsinlowemissionstechnologies.Figure21showsthepathwayfromthegovernment’spoliciesandinvestmentstotheirintendedimpacts.Thepathwayhasthreestages,whichalignwiththegoalsandtargetsinLETS2020:Enablingpoliciesandinvestments.Thesearegovernmentpoliciesandinvestmentsthatsupportlowemissionstechnologydevelopmentanddeployment.Co-investmentandemploymentoutcomes.Theseincludeco‑investmentingovernment-fundedprojectsfromtheprivatesectorandotherjurisdictions,aswellasjobssupported.Othertechnology,economicandabatementimpacts.Impactsthegovernmentaimstoinfluence,butwhicharealsoinfluencedbyexternalfactors.Theseinclude:–technologydeploymentandcosts–exportssupportedbyprioritytechnologies–reducedemissions.Themainlong-termimpactwewilltrackisprogresstowardstheeconomicstretchgoalsforprioritytechnologies.Technologycostswilltakeseveralyearstoreduce,soprivatesectorco-investmentisanimportantleadingmetricforprogressinthemeantime.Weaimtoattractanaverageofover$3ofco-investmentforevery$1ofAustralianGovernmentinvestmentoverthedecadeto2030,whichisexpectedtobeatleast$20billion.Lowercoinvestmentmaymeantheprivatesectorhaslessconfidenceinthetechnologyorthatpolicysettingsneedreview.Significantlyhighercoinvestmentcouldmeantechnologieshavebecomecommerciallymature.Thiswouldmeangovernmentinvestmentcouldbeprioritisedelsewhere.Wewillreportourprogresseveryyearinannualstatements,withindividualmetricstobecoveredtotheextentthatdataisavailable.Tosupportthisreporting,wewillcollectdatafromallrelevantAustralianGovernmentagenciesandalsoestablishdatasupplyagreementswithcoreinvestmentandregulatoryagencies,includingARENA,CEFCandCER.The‘AustralianGovernmentinvestment’sectionoftheintroductionchapterincludesprogressupdatesonsomemetricsforthe12monthsending30June2021.Theimpactevaluationframeworkwillbecontinuallyreviewedandrefinedinlinewiththeroadmap’sadaptiveapproach.98LOWEMISSIONSTECHNOLOGYSTATEMENT2021Figure21:ImpactevaluationframeworkENABLINGPOLICIESANDINVESTMENTS1.1GovernmentfundingallocatedtolowemissionstechnologiesMetric:$committedorexpended1.2EnablingpoliciesdeliveredNarrative:Progressonpoliciestosupportprioritylowemissionstechnologies1.3InternationalpartnershipsestablishedNarrative:ProgressoninternationalpartnershipsforprioritylowemissionstechnologiesCO-INVESTMENTANDEMPLOYMENTOUTCOMES2.1Co-investmentleveragedTarget:Over$3leveragedper$1ofAustralianGovernmentfundingMetric:$co-investmentcommittedtolowemissionstechnologies2.2InvestmentprojectoutcomesachievedNarrative:Outcomesachievedforselectedinvestmentprojectsineachprioritytechnologyarea(casestudies)Metric:JobssupportedbygovernmentinvestmentinlowemissiontechnologiesOTHERTECHNOLOGY,ECONOMICANDABATEMENTIMPACTS3.1DecreasedcostsforprioritytechnologiesinAustraliaMetrics:a)Hydrogen–Costofproducingcleanhydrogen(target:$2perkg)b)Ultralow-costsolar–Levelisedcostofelectricityfromsolar(target:$15perMWh)c)Storage-Costofelectricityfromstorageforfirming(target:$100perMWh)d)Steel&aluminium-Averagecostsforlowemissionssteelandaluminium(targets:$700pertonneforsteel,$2,200pertonneforaluminium)e)Carboncaptureandstorage-AveragecostforCO₂compression,transportandstorage(target:$20pertonne)f)Soilcarbonmeasurement–Averagecostofmeasuringsoilcarbon(target:$3perhectareperyear)3.2IncreaseddeploymentofprioritytechnologiesinAustraliaMetrics:a)Hydrogen:Totalcleanhydrogenproductioncapacity(tonnesperyear)andannualproduction(tonnes)b)Ultralow-costsolar:Installedcapacity(MW)forlarge-scalesolarc)Storage:•NEMandWEMinstalledcapacity(GW)andaverageduration(hours)fordailystorageandfordeepstorage•Annualamount(GWh)andshare(%)oftotalelectricitygenerationfromlargescalesolarandwindd)Steel&aluminium:Annualvolume(tonnes)andvalues($)oflowemissionssteel,aluminium,improvedironoreandaluminaproducedinAustraliae)Carboncaptureandstorage:TotalCCScapacity(tonnesperyear)operationalinAustraliaf)Soilcarbonmeasurement:•ERFprojectsregisteredundernewsoilcarbonmethod•Volumeofabatement(tonnes)3.3ExportssupportedbyprioritytechnologiesMetrics:a)Hydrogen:Annualvolume(tonnes)andvalue($)ofcleanhydrogenandrelatedexports(eg:ammonia)b)Steel&aluminium:Annualvolume(tonnes)andvalue($)oflowemissionssteel,aluminium,improvedironoreandaluminaexports3.4EmissionsreductionssupportedbyprioritytechnologiesMetrics&narrative:ActualandprojectedprogressofAustralia’sannualemissions(tonnes),relevanttothecontributionofprioritytechnologies

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