Image caption, SunDrive’s Maia Schweizer thinks Australia has what it takes to become a solar panel manufacturing hub

  • Author, Hanna Ritchie
  • Role, BBC News, Sydney

Hidden among dense bushland on the outskirts of Sydney’s south lies a sprawling facility that houses a technological breakthrough.

It is here that the Australian company SunDrive Solar makes its “special sauce”: a new – top secret – formula that it claims has solved “a problem of very high value”.

The big innovation? Finding a way to replace the silver used in solar cells with copper, which was previously thought impossible.

“Silver is expensive, scarce and environmentally disastrous, and it limits the amount of solar energy that can be deployed around the world,” explains Chief Commercial Officer Maia Schweizer.

“Copper is also in high demand, but it is a thousand times more abundant and a hundred times cheaper.”

The start-up is one of the beneficiaries of the government’s Future Made in Australia plan – a set of policies aimed at turning the country into a “renewable energy superpower” by investing in green industries from home soil.

But some experts question whether the $22.7 billion package, which includes tax breaks, loans and start-up grants, is enough to achieve these lofty ambitions.

And climate scientists say if Australia wants to be a major player in the net-zero transition, the country must stop selling fossil fuels.

Australia’s economy has long been powered by natural resources such as coal, gas and iron ore.

But the crucial minerals – many of which form the basis for crucial low-emission technologies – are crudely exported and refined abroad, mainly by China.

It’s a trade model that has earned Australia a reputation as the quarry of the world, and has seen the country miss out on a significant portion of change further down the supply chain.

Lithium – used in the batteries that store renewable energy and power electric vehicles – is one example.

Despite being responsible for more than half of the world’s supply, Australia has just 0.5% of the $57 billion global lithium battery market, according to the country’s national science agency.

The Future Made in Australia policy – ​​which was formally announced in April – seeks to change that by offering tax breaks and loans to companies that want to process critical minerals at home.

The administration argues this is a national security priority as countries examine their trade dependence on Beijing and try to protect themselves from supply chain shocks.

“This is not old-fashioned protectionism or isolationism – it is the new competition,” Prime Minister Anthony Albanese said when announcing the plan.

“We must aim high, be bold and build big, to match the scale of the opportunity before us.”

Image caption, Alpha HPA is building one of the world’s largest alumina refineries in Queensland

Queensland-based Alpha HPA is one of the companies the government has engaged to implement its vision.

Like SunDrive, it sees itself as a disruptor, due to its ability to create ultra-high purity aluminum products (used in things like semiconductors and iPhones) with a lower carbon footprint than foreign competitors.

Thanks to a A$400 million federal loan, the company is building one of the world’s largest alumina refineries near the coastal city of Gladstone, which the company says will create hundreds of local jobs.

It’s a huge source of pride as there is still skepticism about whether Australia can make things after decades of outsourcing its manufacturing to China, says Rob Williamson, Alpha HPA’s chief operating officer.

“Anyone who says we don’t have people in this country to do that [this work] just don’t try,” he adds.

SunDrive makes a similar journey.

Without government support, Ms. Schweizer says, the company might have moved abroad.

Instead, it wants to transform one of the country’s oldest coal-fired power stations into a gigantic production center for solar panels.

Currently, one in three Australian households have solar panels, the highest rate in the world, yet only 1% is made locally – with China responsible for more than 80% of global production.

“For every mineral you need to make a solar panel, we have one of the three largest reserves in the world,” Ms. Schweizer explains.

“Now there’s the possibility of the end-to-end value chain making landfall in Australia for the first time, which is super, super exciting.”

The Made in Australia pledge has received support from the country’s leading trade bodies in the renewable energy sector, who say the investments could be “game changing”.

“It’s a big opportunity for us to export climate solutions to the world, rather than climate problems,” said John Grimes, head of the Smart Energy Council.

But some climate experts warn that gas is being “seriously undermined” by the government’s recent decision to defend gas until 2050 and beyond, despite global calls to quickly phase out fossil fuels.

“We’re sending a very mixed message to investors,” said Polly Hemming, director of the Australia Institute’s climate and energy program.

Image caption, Alpha HPA already produces a range of ultra-high purity aluminum materials

“This government has continued to approve new gas and coal projects; she has flown to Japan, India, Korea and Vietnam to secure long-term markets for gas and coal.

“If we really wanted to be a green energy superpower, we wouldn’t be ruthlessly looking for customers for our fossil fuels,” she says.

One of the country’s leading climate scientists agrees.

“There is a very deep contradiction at the heart of both policies,” says Prof. Bill Hare, CEO of Climate Analytics and author of numerous UN reports on climate change.

“The future made in Australia [plan] plays second fiddle in the government’s gas strategy.”

To understand how, Ms. Hemming says, you have to “follow the money.”

According to an analysis by her think tank, state and federal governments spent A$14.5 billion last year alone on subsidizing the use of fossil fuels across Australia, and that amount is only expected to rise, according to budget estimates.

By contrast, she says the $13.7 billion earmarked for processing crucial minerals and incubating Australia’s nascent green hydrogen industry “isn’t real money”.

That’s because it will take the form of tax breaks over the course of a decade, which cannot be cashed in on production until 2027 – a model that policymakers say will ensure taxpayers’ money isn’t wasted.

But all green hydrogen projects – many of which are led by the country’s largest mining and energy companies – have yet to be built. And the incentives could be scrapped before they get off the ground if there is a change in government.

“It’s like I’m simultaneously implementing a healthy eating and junk food policy at home and telling my kids, ‘You can now get $10 a week if you keep eating junk food,’” says Ms. Hemming.

“Or, ‘I’ll give you two dollars in 2027 if you switch to broccoli.’ What do you think they’ll prioritize?”

Some energy experts have also cast doubt on the business rationale behind green hydrogen, as the industry is still in its infancy and full of unknowns.

Others fear it could divert investment from the renewable energy sources that have already proven their worth, resulting in delayed climate action.

But Mr Grimes says green hydrogen will play a vital role in “stripping emissions” from Australia’s carbon-intensive mining sector – as companies look for cheap green fuel sources to sustain their operations.

And in the bigger picture, he argues that the government’s new green investments should be assessed as “a first milestone” and not as an end point.

“The government knows that if Australia does not quickly move beyond exporting coal, gas and iron ore, Australia risks becoming the Kodak economy of the future: a big deal one day and completely irrelevant the next.”

Image source, Getty Images

Image caption, The Australian economy has been focused on exporting raw materials for years

Australia is not the only country looking to position itself as the engine room of the new green economy.

Dozens of countries are coming up with ambitious proposals, such as the European Union’s Green Deal or America’s gigantic Inflation Reduction Act.

According to the International Energy Agency, policymakers worldwide have already invested more than $2 trillion in clean energy initiatives since 2020.

But Australia has some compelling natural advantages, including enviable wind and solar energy capabilities, repositories of critical minerals and rare earth elements, and a strong mining infrastructure network that can be reused.

If used correctly, all the experts the BBC spoke to agreed that it has every chance of securing its place as a critical green trading partner among allies.

However, achieving this goal, they say, will require even greater investment, especially in research and development, which is currently at its lowest level in 30 years.

And they have warned that the government cannot afford to drag its feet – a point that Mr Albanese himself has addressed directly.

“We have to get started. We have unlimited potential, but we don’t have unlimited time.

“If we don’t seize this moment, it will pass. If we don’t seize this opportunity, we won’t get another one. If we do nothing to shape the future, the future will shape us.”

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