Energy and net zero in the 2022 election: cutting the chaff and understanding what it means for your business
Energy briefing update - March 2022
Energy and climate have long been highly contentious topics in Australian politics. But as we enter the 2022 federal election cycle, the tides have turned: all major parties are now committed to net zero by 2050.
This sentiment is shared by the private sector, with net zero commitments from businesses being announced thick and fast – 55 of Australia’s 150 largest companies have committed to net zero by 2050. For these businesses, and those that are contemplating making net zero commitments, understanding how government will support businesses in this transition is crucial to ensuring these pledges can actually be achieved.
So where do the major parties and independents sit?
The Liberal National Coalition
The Liberal and National parties have put “technology not taxes” at the heart of their plan to address emissions reductions. The Long-Term Emissions Reduction Plan, released in 2021, relies on rolling out low-carbon technologies including renewables and energy efficiency. This is supported by the Low Emissions Technology Commercialisation Fund, which will support Australian companies developing such technologies through capital investments from the Clean Energy Finance Corporation (CEFC) and private sector investors. This will support businesses that export energy and minerals, as well as those that provide energy services
But what does the Coalition have in store for businesses looking to reduce their energy consumption? In a recent First Fuel podcast, the Assistant Minister to the Minister for Industry, Energy and Emissions Reduction, Tim Wilson MP, noted the importance of partnering with industrial producers to drive down emissions, taking sector-specific approaches rather than applying “one-size-fits-all” solution. Wilson also said that spreading awareness of the benefits of energy efficiency measures across individuals and businesses is a critical driver of change.
The Coalition have made no specific commitments to supporting businesses with reducing energy costs, but, as previously announced, are wanting to expand the temporary full expensing tax incentive to 30 June 2023. These tax incentives can be used for energy upgrades, as highlighted in Leveraging tax incentives to improve energy performance: a guide for Australian businesses investing in smart energy management.
Listen to the full conversation about the Coalition’s approach here.
Australian Labor Party
The Australian Labor Party has a keen focus on energy in their election platform, particularly on growing jobs in renewable energy and upgrading the transmission grid. The party recently released its Powering Australia plan, which has reduction of both emissions and energy costs at its core. While a pared back policy platform compared to what they took to the 2019 election, the plan supports businesses with switching fleets to electric vehicles and achieving net zero via the Safeguard Mechanism, as recommended by the Business Council of Australia.
In a recent First Fuel podcast, the ALP’s Shadow Minister for Climate Change and Energy, Chris Bowen MP, shared his view that the energy transition is the “biggest economic change since the industrial revolution.” Bowen referred to this change not as a threat, but as a huge opportunity for Australia. He emphasised how cutting costs with energy management builds the business case for transitioning to net zero. He also noted that the benefits of investing in energy efficiency measures now outweigh the costs of the change.
Listen to the Shadow Minister discuss the opportunities of the energy transition here.
Australian Greens
The Australian Greens have several policy proposals regarding emissions reduction and transitioning to renewables. Their policies are driven by public investment in generation, storage, and developing the grid, as outlined in the Greens’ Fight for the Future plan released in March 2021.
The Greens have a goal of hitting net zero emissions by 2035, with a government-supported shift to 100 per cent renewable energy. The Greens also advocate for smarter energy management and investment in technology to help reduce overall energy costs for businesses and individuals.
Adam Bandt MP, Leader of the Australian Greens and spokesperson on the Climate Emergency, Energy, Employment and Workplace Relations, recently spoke about the crucial role of energy efficiency and demand management in the climate and energy transition on a First Fuel podcast. He emphasised that any energy policy should support workers across sectors to thrive through the transition to net zero, including by providing training programs. However, no specific policies or programs to support businesses have been announced.
Listen to the interview in full here.
The independents
This election will see a substantial number of independents running on a climate ticket. Independents, by definition, have varying views on multiple topics, but with movements like Climate 200 backing more and more independents to create “a Federal Parliament where a clear majority of MPs back decisive, science-based climate action,” there have never been so many independents campaigning on the same issue.
Zali Steggall OAM, the Federal Member for Warringah, has led the charge in this regard, having first introduced a climate change bill to Parliament in 2020. The bill lays out a proposed plan for reaching net zero emissions by 2050 through implementing a national climate adaptation and mitigation framework.
Steggall was interviewed on the First Fuel podcast in early March, where she noted that tabling the Bill again will be her first priority post-election to speed up climate action. She called for continuing the temporary full expensing (asset write-off) tax incentive introduced during COVID beyond FY23 - but only where it is used for “building the sustainability and energy efficiency of a business” and lowering their energy costs.
Businesses interested in leveraging tax incentives to improve energy performance can learn how by reading the guide for Australian businesses investing in smart energy management.
Following the interview, Stegall laid out a five-step plan to achieving net zero, which includes supporting industry with halving emissions by 2030. Like the ALP, she calls for expanding and tightening the Safeguard Mechanism and establishing an ‘Electrifying Industry Fund’ to help industry shift to renewable electricity and feedstock.
Listen to the conversation in full here.
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About Navigating a dynamic energy landscape
There is an enormous amount of information on energy in the public domain, yet it can be hard for business leaders to extract what matters for their businesses.
Navigating a dynamic energy landscape: a briefing for Australian businesses is an executive-level briefing designed to cut through the noise and help businesses confidently navigate Australia’s dynamic energy landscape.
The sector spotlights and other resources that accompany the briefing exist to support this aim.
This initiative is delivered by the Energy Efficiency Council with the support of industry and the NSW Department of Planning and Environment.
To learn more visit energybriefing.org.au.