Australia 2035 emissions targets: Business groups back Bowen’s policy but warn huge investment needed

Business has cautiously backed the Federal Government’s target to slash emissions by 2035 but warned the scale of investment needed to reach the goal will be huge. Energy Minister Chris Bowen on Thursday pledged the country would cut greenhouse gas pollution between 62 to 70 per cent by the middle of the next decade to help the fight against climate change. It came with Treasury modelling claiming workers and families would be better off with the interim target in place thanks to improved investment certainty. That analysis promised GDP per capita — the average Australian’s share of the economy — would be $2,100 smaller in 2050 without the 2035 target as a short-term guide post. Wages would also be about 2.5 per cent lower. The government’s view is that a clear pathway for emission reduction will encourage companies to invest and boost the chances Australia will become an export powerhouse for renewable energy. “The target range that’s been set is ambitious and our analysis shows there is a pathway to achieving it that will require significant capital investment, major reform and exceptional collaboration between the public and private sectors”, Business Council of Australia boss Bran Black said. “We strongly support net zero by 2050, and getting this right is about balancing the needs of future generations while ensuring Australian industry can continue to compete in the global market today.” Minerals Council of Australia chief Tania Constable declared the new target “aims to balance ambition and pragmatism” while warning the upper end of the scale would be “aspirational”. Emissions from the resources sector were expected to drop a whopping 80 per cent by 2050 under Mr Bowen’s strategy as the Government forecasts a big fall in global demand for LNG and coal in coming decades. Mine sites will also electrify their vehicles and equipment while oil and gas companies will invest in carbon storage. That will make the Pilbara region a crucial site for investment. BHP promised earlier this month to keep pursuing plans to bring on green power to iron ore operations after scrapping a small solar farm planned at Jimblebar — opting instead to secure energy through commercial deals. Fellow iron ore giant Rio Tinto welcomed the “clear” target. “This is an important signal for an orderly net zero economy transition and provides policy certainty needed for investment in low-carbon projects,” a spokesman said. “We’re investing in large-scale renewable energy projects, improving energy efficiency across our operations and pioneering low-carbon technologies.” Taxpayers will fork out billions to help industry and manufacturing cut carbon with Mr Bowen’s plan touting the Future Made in Australia strategy as a way to clean up iron, steel and alumina production. About $5bn of the National Reconstruction Fund’s cash will be cordoned off to chase net zero on top of the money pledged this week for lower-carbon fuels. Mr Bowen’s plan lists hydrogen, replacing old equipment such as pumps and refrigerators, and shifting demand to periods of cheap power prices as methods industry might use to reduce their carbon footprint. The power grid will need to build on existing plans to cut emissions by 82 per cent by 2030.