Research backed by some of Australia's biggest players says the country can cut 88 per cent of heavy industry emissions. 

Major industrial regions – including the Pilbara, Kwinana, Hunter, Illawarra and Gladstone – have the natural resources, workforce and baseline infrastructure that can be expanded to support Australia’s net zero transition, according to a report released today.

The report - which is backed by 18 of Australia’s largest companies - shows it is possible for these five regions to achieve an 88 per cent reduction in their current emissions, which together account for about one-eighth of Australia’s total emissions. 

This is the equivalent to 70 MtCO2e of abatement, or to removing all emissions from cars and light commercial vehicles across Australia.

Industrial regions can contribute to reaching state and national net zero emissions targets by 2050, while driving employment growth and building Australia’s climate resilience, the experts say. 

The ‘Setting up industrial regions for net zero’ report is the result of a two-year collaboration between some of Australia’s largest companies, as part of the Australian Industry Energy Transitions Initiative (Australian Industry ETI)

“Through this analysis of the decarbonisation potential of five important industrial regions where Australian Industry ETI participants are active, we have gained invaluable insights into the opportunities and on-the-ground challenges in the net zero transition,” said Australian Industry ETI Chair, Simon McKeon AO, Chancellor of Monash University, former CSIRO Chairman and former Australian of the Year.

“Australia can remain competitive in a decarbonising global economy. But this will require coordinated efforts across industry, governments and communities and also the finance and energy sectors. It will also need the alignment of policy, regulations and programs to create clear goals and investment confidence.”

The report finds Australia’s industrial regions can capitalise on global demand for low-carbon products and energy exports.

“This is achievable if we rapidly deploy existing technology solutions, and support the development and demonstration of emerging opportunities through more proactive regional coordination and collaboration,” says Climateworks CEO Anna Skarbek.

The report reveals the scale of renewable energy required to decarbonise five industry supply chains in the Pilbara, Kwinana, Hunter, Illawarra and Gladstone would be an additional 25-47 per cent of Australia’s total electricity generation, or 68.3 to 125.9 TWh of energy.

“This will require an unprecedented transformation of the energy system,” said Ms Skarbek.

“Governments will have a significant role to play in achieving this, with supportive policy, programs and support for regional leadership efforts, especially in infrastructure which is an enabler of decarbonisation.”

The required renewable energy infrastructure, green hydrogen and energy storage has the potential to create job opportunities for 178,000 to 372,000 Australians. The investment in these regions and enabling infrastructure will be in the order of $50 to $100 billion, the report finds.

The report calls for targets for industrial regions to facilitate planning and action, and guide decision making for the long-term transition. 

It also calls for coordinated planning and development of multi-user infrastructure and the co-development of regional decarbonisation roadmaps.

The formation of clustered industrial precincts could be a key opportunity for Australian industry and in regions where hard-to-abate sectors are concentrated.

The 18 initiative participants represent approximately 30 per cent of the ASX100 market value. They include Australian Gas Infrastructure Group, APA Group, Aurecon, AustralianSuper, BHP, BlueScope Steel, BP Australia, Cbus, the Clean Energy Finance Corporation, Fortescue Metals Group, HSBC, Orica, National Australia Bank, Rio Tinto, Schneider Electric, Wesfarmers Chemicals, Energy & Fertilisers, Westpac and Woodside Energy.