Australian governments must respond to US IRA, attract investment needed for energy shift: Weld Australia

A guaranteed pipeline of work and local content provisions are needed to build the capacity needed for the energy transition, industry body Weld Australia has said.

In a statement on Tuesday, the group urged the federal government to deliver a policy framework guaranteeing enough work “for manufacturers to attract the required investment”, and strongly recommending mandated local content of 60 per cent of Australian-fabricated steel (by kilogram) compliant to Australian Standards.

Citing recent decisions by Andrew Forrest to invest $54 million in a battery plant and $US 550 million Phoenix Hydrogen Hub – both in the US, and allowing him to “cash in on the enormous benefits and tax incentives afforded by US President Joe Biden’s AU$550 billion Inflation Reduction Act (IRA)” – Weld Australia said the nation must act.

“Our governments must stop prevaricating over our response to the IRA and enact equivalent policies and legislation that encourage private investment and secure a pipeline for local business. The alternative is that Australia remains a dig and ship economy until we run out of ore—and options,” said Geoff Crittenden, CEO of Weld Australia, in a statement on Tuesday.

“We must grow our manufacturing capability at a rapid pace if Australia [is] to have the resources to meet net zero targets. And yet, the Federal Government has so far failed to allocate funding, or enact any kind of industry policy, tax incentives, or legislation.”

Weld Australia also raised “significant speculation” about how well global supply chains could meet Australia’s significant energy transition needs.

Think tank Climateworks estimating the investment needed to decarbonise the economy by 2050 will total $625 billion.

Wind energy company Vestas recently said its supply chain is spoken for in 2024 and it could only guarantee local supply by building an Australian plant.

Crittenden added that, “relying on the overseas supply chain would pose a significant risk that can only be offset by establishing sovereign manufacturing capability.

“If Australia is to develop a sovereign manufacturing capability, then we will also need to develop the accompanying technical infrastructure. It will be imperative that we have a suite of Standards covering all aspects of the manufacturing and construction process.”

Picture: credit Weld Australia

Further reading

Can Canberra arrest the flow of manufacturers leaving for the US?

National manufacturing policy for net zero transition

Fortescue secures US green hydrogen funding

Made in America: how Biden’s climate package is fuelling the global drive to net zero

We urgently need $100bn for renewable energy. But call it statecraft, not ‘industry policy’