Green industry urged to club together in clean energy hubs and cut transmission spend

Clean energy hubs could save money and create jobs if clusters of businesses shared transmission lines and green hydrogen pipelines, independent research shows.

Economic modelling released by think tank Beyond Zero Emissions (BZE) on Monday calls for a national clean industry hub program to accelerate investment in existing industrial areas and ignite regional decarbonisation.

Separately, a report from the independent Centre for Policy Development recommends up to $100 billion of public investment in green industry over two decades.

To remain competitive, Australia needs to urgently enable existing industry and manufacturers to strip emissions out of their commodities and products, BZE says.

Industry in four of their proposed hubs – Gladstone, Kwinana, Hunter and Bell Bay – create nearly a quarter of the total emissions under Australia’s emissions safeguard mechanism that covers the country’s biggest 215 industrial plants.

But the absence of a nationally coordinated approach, and the way the safeguard mechanism works, means that funding favours smaller projects at individual facilities and wastes taxpayer money, the report found.

“The modelling showed that by funding clusters of facilities in Gladstone and Kwinana alone could deliver an additional 50 million tonnes reduction in emissions,” BZE CEO Heidi Lee said.

Some 14 Renewable Energy Industrial Precincts (REIPs) are proposed, which could also slash the cost of rewiring the nation.

Replacing five transmission lines of 100-megawatt capacity with one 500 MW capacity line could reduce cost by almost three-quarters over a mere 100 kilometres and two-thirds for a distance of 250kms.

Building shared energy infrastructure can create an extra 200 jobs per year, an extra $2.4 billion in real economic output by 2050 and $600 million in government revenue by 2050 in the Gladstone precinct.

In Kwinana in Western Australia, an extra 460 jobs per year, $5 billion in real economic output by 2050, and $850 million in government revenue could be generated.

While governments have a wishlist that spans battery manufacturing and highly refined energy transition minerals, the Centre for Policy Development report hones in on three key industries for public investment.

That is green iron, aluminium and ammonia.

“Half the support should be targeted to just the first movers that are locking in technology that’s, frankly, not yet mature,” report author Toby Phillips told AAP.

“They are taking a hit on behalf of society and those first plants are going to struggle to compete,” he said.

Production credits are among the recommendations to cover the extra cost to get these industries established.

But subsidies should taper off over time, and taxpayer funding must not replace private investment.

The reports come on the eve of a carbon border adjustment mechanism – or tax – in Europe, which will slug tariffs on imports from countries lagging on decarbonisation.

Rather than Australia being left behind, it offers a massive opportunity, Mr Phillips said.

“As the global community starts wanting to buy commodities with lower embedded emissions, we’ve already got the ores and a natural endowment of renewable energy,” he said.

“The opportunity is, then, we become the provider of those products that the rest of the world is demanding.”