What's in the Budget's pathway to net zero?
Last night, Treasurer Josh Frydenberg delivered the 2021–22 Budget, announcing that the economy is “roaring back to life” with investments in aged care, childcare and mental health. But what was in it for sustainability and tackling climate change?
$1.6 billion allocated to fund priority technologies, including clean hydrogen and energy storage and $58.6 million to support an expansion of the gas industry.
The federal government announced that Australia is on the pathway to net zero and that its goal is to get there preferably by 2050. It also confirmed its commitment to ‘gas-fired’ recovery from the COVID-19 pandemic in this year’s Budget.
Global Compact Network Australia Executive Director Kylie Porter said: “We recognise the challenges posed for both government and business in a swift and unplanned transition to clean energy. However, the focus of the Budget allocation towards gas is not a long-term sustainable energy source. Additionally, without effective technologies to reduce emissions, a gas-led recovery will increase Australia’s overall greenhouse gas emissions and potentially lead to another wave of stranded assets.”
Jeff Olling, Global Chief of Stakeholder Relations at iugis, said he was disappointed with the lack of focus the Budget has given to the renewable energy sector. “It is clear that businesses and consumers are keen to drive a sustainable-led recovery, with our research commissioned by YouGov last year finding business owners feel it’s important for them to adopt more sustainable practices to aid economic recovery in Australia following COVID-19. The same research showed one in three consumers are now more concerned about sustainability than pre COVID. This indicates a clear mandate for us to do more to fight climate change; however, we need the government to provide the right investment signals to give confidence and certainty to be able to make investments in a green and digital transition.
“Other jurisdictions are moving at rapid pace to reduce emissions. The EU is considering a ‘carbon border adjustment mechanism’ to level the playing field for those countries that don’t transition to greener infrastructure. This could have trade implications for Australian businesses who seek to trade in Europe. Our counterparts in Germany are also planning a new green financing strategy to incentivise capital towards environmental projects. Add this to commitments to cut emissions by the US and the UK by 2030 and 2035, we are in serious danger of being left behind.
“A gas-led recovery isn’t addressing the main issues we have today and has no long-term economic or environmental reason to be investing. We encourage the government to reset our approach towards renewables if we are serious about reducing our carbon emissions.”
Materials and recycling
$78 million funding allocated for waste and resource recovery initiatives, the bulk of which is directed towards diverting organic waste from landfill (thus also addressing emissions reduction).
The government is investing $11 million to support Australia’s recycling industry, including an additional $5.9 million over four years from 2021–22 for the National Product Stewardship Investment Fund and $5 million over three years from 2021–22 to help small businesses adopt the Australasian Recycling label.
With organic waste, the government is investing $67 million over four years from 2021–22 to enhance organic waste facilities and support community education to reduce food waste going to landfill.
Olling said while he welcomed the government’s announcement of new funding for the environment and its commitment to upgrading our recycling capabilities to reduce waste to landfill, “we are deeply concerned that incentives to reduce food waste are again overlooked in this year’s Budget”.
$316.7 million of funding to help industry and businesses reduce their emissions through voluntary action and adopting low-emissions technologies.
Kevin Nesdale, General Manager, Power Distribution at Eaton ANZ, said: “This is a promising step to take a technology‑focused approach to reducing emissions; however, if this is the intent, then the energy sector must accelerate efforts to mitigate the dangers of sulfur hexafluoride (SF6), the most harmful greenhouse gas. It is 23,500 times more potent than CO2 and stays in the atmosphere for 3200 years, but is widely used in the electrical industry within switchgear, from large thermal power stations to renewable generation to electrical sub-stations, to insulate and switch electricity.
“Last year, the EU released a report detailing the alternatives to SF6 in switchgear and related equipment in a bid to phase out the gas as part of the EU’s mission to cut harmful greenhouse gas emissions by two-thirds between 2014 and 2030. While international markets are making strides to leverage SF6-free technology, [so] now must Australia, otherwise we risk seeing this hugely hazardous and unintended consequence of the green energy boom continue to negatively impact international efforts to manage global warming.
“The Budget speaks of a nation that will play a leading global role by partnering with other nations to accelerate the commercialisation of low-emissions technologies. So, now’s the time to make this a reality and set the scene for SF6-free technology and become the norm for the industry.”
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