Industry heavyweights join carbon-reduction initiative

Tuesday, 28 July, 2020

Industry heavyweights join carbon-reduction initiative

Australian industry heavyweights are working together to explore pathways to emissions reduction, establishing the Australian Industry Energy Transitions Initiative (ETI).

The initiative brings together key industry stakeholders from hard-to-abate sectors to explore solutions that can help them reduce their emissions across their supply chains and increase long-term competitiveness through transitioning to clean energy solutions.

Independent not-for-profit ClimateWorks, along with co-convenors Climate-KIC and research partners CSIRO and the Rocky Mountain Institute, have undertaken preliminary research and will work with industry participants to develop a practical program to fill research gaps, identify challenges and develop projects for implementation.

The Australian Industry ETI will focus on five supply chains that include iron and steel, aluminium and bauxite, liquefied natural gas, other metals (such as lithium, copper and nickel) and chemicals including plastics, fertilisers and explosives. These sectors together represent more than a quarter of Australia’s annual greenhouse gas emissions and approximately $160 billion in exports annually.

Participating industrial companies in the two-year initiative include BHP, Woodside, BlueScope Steel, BP Australia, Orica, APA Group and Australian Gas Infrastructure Group (AGIG). Together, these participants account for 13.6% of Australian industrial emissions. They are joined by National Australia Bank, Schneider Electric, Wesfarmers Chemicals, Energy & Fertilisers and Australian Super, with more expected to join in the coming months.

The Australian Renewable Energy Agency (ARENA) is providing $300,000 in funding to assist ClimateWorks Australia in the establishment of the initiative, which is also supported by the Australian Industry Group, the Australian Industry Greenhouse Network, philanthropic donations and company contributions.

Aims of the Australian Industry ETI

The initiative aims to set Australian industry up for a successful transition to a decarbonised global economy by harnessing industry knowledge to accelerate emissions reductions across whole supply chains — in sectors where abatement has traditionally faced structural challenges.

ARENA CEO Darren Miller welcomed the initiative’s role in uniting some of Australia’s big players in industry as they seek to work towards a common goal to reduce emissions.

“Accelerating the uptake of renewable energy in the industrial sector is a critical part of helping Australia reduce our emissions. Providing industry with information and insights on energy options such as renewables and alternative fuels will also help industry meet their market needs as global demand for low-carbon products grows,” he said.

“This initiative has some ‘heavy hitters’ at the table and we’re expecting the collaboration will allow for the exchange of ideas and knowledge that will benefit across sectors and supply chains.

“Importantly, we also believe the ETI fits well with the goals of the Australian Government’s Technology Investment Roadmap, which will provide a strategic approach to future investments in low-emissions technologies,” Miller said.

Australian Industry ETI Chair Simon McKeon AO said collaboration, experimentation and shared knowledge would all sit at the heart of the initiative’s work.

“We know that we can find solutions more quickly, and start implementing them, if we’re encouraging collaborative learning and knowledge sharing, especially when it comes to new technology,” McKeon said.

“This initiative provides a platform to generate knowledge and test action through on-the-ground projects that support industry to realise the opportunities of a decarbonising global economy.”

Decarbonising supply chains

As global efforts to reduce emissions to net zero by 2050 continue and become more urgent, there is an increasing awareness that companies must understand their broader supply chains and help shape the decarbonisation approach across them.

Supply chains embody the highly complex and interconnected nature of the global economy, and include finance, investment and customer decisions, as well as operations such as the extraction of raw materials, processing and distribution. Tackling these complex systems presents additional challenges to industry.

“Emissions aren’t contained within national borders and aren’t confined to what happens within a company’s four walls. That’s why a supply chain approach is vital,” ClimateWorks CEO Anna Skarbek said.

“Globally, many countries and businesses are already moving to decarbonise supply chains in heavy industry sectors. There are huge opportunities for Australian businesses if they take a proactive approach to getting into this race.

“The good news is that the Energy Transitions Commission and others have shown that technologies can eliminate the emissions from our heavy industry supply chains. Better understanding these opportunities for Australian industry will be a key focus of the initiative.

"We’re pleased to be working with Australian industry participants to develop pathways and actions to support net zero emissions across critical supply chains of the economy.”

Orica CFO Christopher Davis said, “It’s now more important than ever that we work together with our customers and peers to accelerate action and play a role in moving the industry towards a decarbonised future.

“Supply chains in this sector can be incredibly complex and historically difficult to abate, so it’s crucial we bring together companies occupying different parts of the supply chain to work collaboratively and develop tangible, informed actions to help us move towards this goal.”

In addition to considering opportunities across the Australian economy, the Australian Industry ETI will also have a particular focus on Western Australia.

“With mining and heavy industries driving the economy in Western Australia, focusing some of our effort there will really demonstrate what is achievable nationwide,” Climate-KIC Australia CEO Chris Lee said.

“Taking a systems approach and joining up players within and across supply chains will help move past barriers that individual companies face when reducing emissions as well as support the realisation of new opportunities.”

BP Australia President Frédéric Baudry said, “BP has set an ambition to become a net zero company by 2050 or sooner, and to help the world get to net zero. Reliable and affordable energy is no longer enough. It must also be cleaner.

“In Australia we are reducing carbon in our operations and growing our low-carbon businesses, products and services. We are also actively engaging countries, cities and corporations around the world to help them decarbonise.

“We are especially excited to be partnering with the Australian Industry Energy Transitions Initiative to progress a net zero Australia by 2050.”

National Australia Bank Group Executive David Gall also expressed the importance of being part of the initiative.

“We’re delighted to be working with fellow industry participants to develop pathways and actions to support net zero emissions for heavy industry. This forms a key part of NAB’s broader commitment to the UN Principles for Responsible Banking.

“The impacts of climate change and climate-related policy are having a growing effect on our own business and the customers we support. Our customers and their communities are showing leadership, and we continue to work side by side with them over the transition journey.

“NAB is making long-term business decisions focused on resilient and sustainable principles,” Gall said.

Schneider Electric President Pacific Zone Gareth O’Reilly said, “We’re excited to bring our energy management and digital expertise to the Energy Transitions Initiative.

“The technology is available today to help heavy industry reach their sustainability and carbon emissions goals. We’re looking forward to working with these companies to help develop solutions that will work for them and their specific needs.”

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