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As global pressures mount to transition to cleaner energy, Australia stands at a pivotal moment in its journey towards decarbonisation.
The country’s vast reserves of critical minerals are key to this effort, but it's clear that leveraging partnerships with global cleantech power houses, particularly China, is essential to lead in a decarbonising world.
Australia has committed to ambitious targets in its pursuit of a cleaner energy future. The nation aims to achieve 82% renewable electricity by 2030, a significant leap from the 32.5% it reached in 2022. (Fletcher,2024)
This shift towards renewable energy is supported by its substantial natural resources, including lithium, nickel, and other critical minerals necessary for technologies like solar panels, batteries, and electric vehicles (EVs).
To assist with these efforts, the Australian government has outlined a comprehensive Critical Minerals Strategy for 2023-2030, allocating $2 billion to develop its critical minerals sector. (Korolev and Fengshi Wu, 2024)
This strategy aims to reduce dependency on China by strengthening ties with "like-minded" countries such as the US,Japan, and India.
However, despite these measures, Australia acknowledges that maintaining ties with China remains crucial for its clean energy transition due to China's dominance in global mineral processing and manufacturing.
China plays a dominant role in the global supply chain for critical minerals, refining 68% of nickel, 40% of copper, 59% of lithium, and 73% of cobalt. It also leads in battery cell manufacturing, producing 70% of cathodes, 85% of anodes, and holds 78% of the world's cell manufacturing capacity for EV batteries.(Castillo and Purdy, 2022)
This dominance positions China as a critical player in the midstream and downstream processes of mineral supply chains, making it indispensable to any global decarbonisation strategy.
China’s role as a clean energy powerhouse extends beyond mineral processing. It is the world's largest producer of solar panels and wind turbines and has the largest carbon market globally. These advancements have not only driven down the costs of renewable technologies but also placed China in a prime position to invest in global manufacturing to support the energy transition.
Australia's short-term goal is to achieve 82% renewable electricity by 2030. This represents a substantial increase from its current level, where renewables accounted for approximately 32.5% of the country's electricity generation in 2022. (Fletcher, 2024)
This target is to be achieved by increasing investments in solar, wind, and battery storage technologies.
Australia aims to reach net-zero emissions by 2050. This long-term commitment was formalised in 2021 and involves transitioning from fossil fuel dependency to cleaner energy sources, focusing on renewables, green hydrogen, and carbon capture technologies. (Lucy O'Connor, 2024)
Achieving net-zero will require a significant overhaul of the country's energy infrastructure, as well as large-scale investments in new technologies and emission reduction initiatives.
For Australia to lead in a decarbonising world, it must navigate a complex landscape of alliances and supply chains.
Balancing its strategic interests between the U.S. and China will be crucial. Embracing China as a cleantech powerhouse, while also diversifying its partnerships, can ensure that Australia not only meets its ambitious renewable energy targets but also cements its role as a global leader in the clean energy transition.
éthica capital, Green Bond Corporation SARL (GBC) and Carbon Capital Corporation (CCC)
éthica capital, Green Bond Corporation SARL (GBC) and Carbon Capital Corporation (CCC) form part of The Green Bond Corporation Group (GBC Group). Combining deep expertise and global thought leadership in sustainable finance, infrastructure development and carbon-based financing that aligns with your environmental and humanitarian goals, empowering your business to achieve greater success and create a meaningful positive impact.
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