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National Battery Strategy: Australia targets ‘globally competitive producer’ status by 2035

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Australia’s first-ever National Battery Strategy aims to make the country a “globally competitive producer” of batteries and battery materials by 2035.

The strategy was published by the Commonwealth government last week (23 May) and includes over half a billion Australian dollars in funding to promote battery manufacturing opportunities along with just over AU$20 million (US$13.33 million) for R&D and workforce training.

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“We want to make more things here and with global demand for batteries set to quadruple by 2030, Australia must be a player in this field,” prime minister Anthony Albanese said as the strategy was published.

“Batteries are a critical ingredient in Australia’s clean energy mix. Together with renewable energy, green hydrogen, and critical minerals, we will meet Australia’s emission reduction targets and create a strong clean energy manufacturing industry.”

His colleague, industry and science minister Ed Husic, noted that while Australia provides around half of the global lithium supply, it produces “less than one percent of the world’s processed battery components.”

AU$523 million Battery Breakthrough Initiative

The launch comes just after Commonwealth Treasurer Jim Chalmers announced the Federal Budget 2024-2025, the centrepiece of which is Future Made in Australia—an AU$22.7 billion programme to invest in reindustrialising Australia with a focus on clean energy tech, including batteries, solar PV, electric vehicles (EVs), and hydrogen.

The National Battery Strategy is a key pillar of Future Made in Australia. The country is well-placed to leverage its availability of resources including battery materials, “strong” ESG standards, its low-risk and stable investment environment, and an early leader position in battery and energy storage research, the government claimed.

AU$523.2 million has been earmarked for the Battery Breakthrough Initiative, which will provide targeted incentives to develop battery manufacturing capabilities. The initiative will be shared among companies that have identified high-value opportunities.

There will also be AU$1.7 billion in funding over ten years for a Future Made in Australia Innovation Fund, administered by the Australian Renewable Energy Agency (ARENA), for innovation, commercialisation, pilots and demonstration projects. This will not be limited to batteries, but will also include other “priority” areas such as hydrogen and clean fuels.

A new Critical Minerals Production Tax Incentive will provide AU$7 billion from the 2027-2028 to 2040-2041 financial years, offering a refundable tax offset of 10% of eligible processing costs for critical minerals, including lithium, cobalt and graphite.

Other aspects include AU$5.6 million to support a pilot-scale manufacturing cluster, the Australian Made Battery Precinct, in partnership with the government of Queensland—which released its own battery strategy a while back.

‘Race to the top’ in clean energy investment

There is a global clean energy investment “race to the top” currently taking place, according to Tim Buckley, founder and director of Climate Energy Finance, an Australian think tank.

Speaking at the Energy Storage Summit Australia 2024 hosted last week in Sydney by our publisher Solar Media, Buckley said he sees “a huge amount of government stimulus and policy focus” coming from China, the US, and Europe.

The US Inflation Reduction Act (IRA) has pledged a trillion US dollars into kickstarting the US economy, but is crucially in response to the lead China has built up over a decade or more in areas including solar PV, batteries and EVs.

China’s response to the IRA in turn has been to “go twice as fast,” Buckley said, installing 24GW of solar and wind every month and spending US$675 billion in cleantech sectors in 2023, double what either Europe or the US invested in that time.

While China is very much the leader and will likely maintain that lead, the IRA put the US “back in the race,” the think tank director said.

Future Made in Australia is an opportunity to “leverage and extend our competitive advantages” in the country, Buckley added.

National Battery Strategy’s duration focus welcomed, more R&D funding needed, say industry sources

The strategy was welcomed by the CEO of the Australian Academy of Technology and Engineering (ATSE) as “an opportunity to shift our focus from simply exporting minerals to adding value through advanced manufacturing capabilities.”

In a media statement, ATSE CEO Kylie Walker said it could position Australia as a global leader in battery production by 2035, echoing the government’s words. The CEO also welcomed a forthcoming independent review of research funding.

Walker emphasised the need to ramp up funding in existing programmes as well as opening up new avenues through the strategy. ATSE also welcomed the strategy’s focus on ESG and circular economy measures.

Meanwhile, publicly-listed flow battery manufacturer Redflow pointed out in a statement to the Australian Securities Exchange (ASX) that the strategy recognises the importance of promoting battery storage technologies for different short-, medium- and long-duration energy storage (LDES) applications.

For this reason, and because of its direct support for battery manufacturing and R&D, Redflow—which makes a proprietary hybrid zinc-bromine flow battery technology—said it believed the National Battery Strategy announcement is “an important and potentially material development for the company”.

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