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The Australian federal government has recently unveiled ground-breaking initiatives aimed at facilitating international investment attraction opportunities for industry and investors in Australia's critical minerals and clean energy sectors. Through strategic partnerships such as the Australian-United States' Climate, Critical Minerals and Clean Energy Transformation Compact and the $20 million Singapore-Australia Go-Green Co-Innovation program, along with other international clean energy collaborations, Australian businesses have an opportunity to gain access to a wealth of global investment funding.
These innovative partnerships mark a significant milestone in Australia's pursuit of economic growth through its clean energy revolution. Through access to foreign capital, the nation's miners, defence, and green technology innovators can receive a strategic funding injection to amplify the impact of Australia's $15 billion National Reconstruction Fund, flagged as leading Australia’s charge towards reaching global renewable energy superpower status.
Australia boasts some of the world's largest reserves of critical minerals, including lithium, cobalt, rare earths, and nickel, which are crucial components in electric vehicles and batteries. Moreover, these resources are extracted under advanced Environmental, Social, and Governance (ESG) regimes, with Australia recently signing up to Canada’s Sustainable Critical Minerals Alliance, ensuring the responsible and sustainable practices global supply chains are looking for. Combined with the country's pool of talented individuals in the renewable energy sector, Australian businesses are primed to reap the benefits of these international opportunities.
These partnerships and the accompanying grant funding opportunities present a pivotal opportunity to strengthen Australia's innovation efforts and boost research and development expenditure. Currently, Australia lags behind in global innovation rankings, scoring 47.1 points on the UN's WIPO Global Innovation Index, while the United States and Singapore lead with 61.8 and 57.3 points, respectively. Leveraging the expertise and resources of our international partners may serve as the catalyst to bridge this gap and bolster Australia's innovation ecosystem.
These initiatives from the United States and Singapore promise to usher in a new era for Australian industry. Let’s look at the detail on these two key initiatives.
The Climate, Critical Minerals and Clean Energy Transformation Compact (the Compact) was established on 20 May 2023, and provides a framework to advance ambitious climate and clean energy action between the two countries. The framework provides departments and agencies from both countries an opportunity to cooperate on integrating diverse, responsible, and innovative supply chains, accelerating the net-zero transition, and driving climate ambition and action in the Indo-Pacific and beyond. Objectives of the Compact include:
Clean energy technologies include solar, wind, storage, and hydrogen materials and technologies.
Through the Compact, Australian companies will have greater access to the landmark US$369b Inflation Reduction Act (IRA), which provides generous grants, subsidies and incentives for clean energy development and commercialisation, through partnerships with American firms. The Compact provides significant opportunity for Australian companies to access IRA capital without leaving the country, strengthening Australia’s sovereign capabilities.
At the sidelines of the 2023 G7 summit in Hiroshima, Japan in late May, Prime Minister Anthony Albanese and President Joe Biden announced the intention to list Australia as a domestic source under Title III of the US Defense Production Act (DPA). To date, only Canada has had this listing. In June 2022, the DPA was invoked by the Biden administration to accelerate domestic manufacturing of clean energy technologies. If passed by Congress, this will unlock international collaboration opportunity and significantly remove barriers for US capital investment in Australian critical minerals and renewable technology and manufacturing industries.
The $20m Singapore-Australia Go-Green Co-Innovation program (GGCIP), part of the Green Economy Agreement, was committed to in October 2022 and reconfirmed on 2 July 2023.
The GGCIP program is focused on green innovation opportunities between Australian and Singaporean small and medium-sized enterprises to establish or expand business and commercial activities that boost two-way trade. Grants can be used to fund the development and commercialisation of products, services or solutions that drive the decarbonisation of economic activities or help Singapore and Australia transition to net zero emissions. Under the Green Economy Agreement, priority green economy sectors include:
Applications are anticipated to open later in 2023, and the program will run until June 2026.
In February 2022, Australia and India executed a letter of intent to increase collaboration on R&D, manufacture scale up and deployment of new and renewable energy, including ultra-low-cost solar photovoltaic and clean hydrogen technologies.
On 24 May 2023, the two countries reiterated a shared ambition on green hydrogen and agreed Terms of Reference for the Australia-India Green Hydrogen Taskforce. The Taskforce will explore trade, commercial and research opportunities for the manufacture and deployment of green hydrogen.
Australia has formed many clean energy partnerships with international partners to advance practical action on climate change and build new clean energy industries. These include Germany, Japan, Korea, United Kingdom and the Netherlands.
As Australia stands on the precipice of unprecedented international collaboration to supercharge renewable energy transformation, industry participants and investors should get ready for industry consultation and government grant funding opportunities.
Grant Thornton has a global footprint of experts in North America, Europe, United Kingdom, India with other locations, that support the renewable energy sector and with a specialist focus on helping companies access funding at both federal and state levels. Our global teams can help support your discussions with infrastructure banks, build successful export strategies and access government funding. To learn more about government grant funding opportunities, contact us below.
