Australia elevates EVs, solar in GHG reduction plan

  • Market: Electricity, Emissions, Hydrogen, Metals
  • 11/03/21

The Australian federal government has elevated the role of electric vehicles (EVs) and low-cost solar technology in attaining its ambition of achieving net-zero greenhouse gas (GHG) emissions by 2050. Low-cost solar will also be used to underpin plans to develop a domestic hydrogen industry using renewable energy.

Australia has updated its GHG emissions reduction plan, adding three more areas of focus. It will develop polices and provide state financing for lowering the cost of solar technology, support EV technology and deployment, as well as provide timelines for parity for the costs of solar and EV with prevailing technology.

Battery electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs) will become price competitive over the next 5-10 years as the world's largest vehicle manufacturers increasingly commit to their development, the government's latest report said.

"Investment is required to prepare for a rapid increase in the number of consumers choosing BEVs and FCEVs, and to ensure enough charging and refuelling stations are made available to meet demand," it said.

The report did not provide any target for EV deployment in Australia. But a separate government report last week has EVs accounting for 30pc of new car sales in Australia by 2030 from less than 1pc in 2019 under a baseline scenario and 61pc by the end of the decade under a high-technology scenario.

Road transport fuels form the bulk of Australia's near 1mn b/d demand, most of which is imported. Transport has also been one of the fastest increasing sources of its GHG emissions, up by almost two-thirds during 1990-19, according to its latest audited emissions accounts filed with the UN.

Australia has not joined other countries in setting a timeline to phase out internal combustion engine vehicles. But including EVs as part of its emissions reduction targets marks a shift for Australia's current government that has no plans to reduce its reliance on fossil fuel exports such as LNG and thermal coal. It also noted that the country could benefit economically from the energy transition as Australia is a significant producer of copper, nickel and lithium that are used in batteries.

Cutting production costs

Canberra has focused on lowering solar power costs, driven by a strategy to cut production costs for hydrogen made from renewable energy, also known as green hydrogen. Its Solar 30 30 30 plan aims to achieve 30pc efficiency at A$0.30 ($0.23) per installed watt by 2030.

"Getting solar power down to less than A$15/MWh, a third of today's cost, will be critical to reducing electricity sector emissions, but also in unlocking the potential of other low-emissions technologies like clean hydrogen," Australian energy minister Angus Taylor said in a speech at the UN Cop 26 climate conference in the UK's Glasgow.

Ultra low-cost clean electricity is also key to meeting the goals for Australian's other ambitions of lowering GHG emissions such as low-emissions steel and aluminium, along with electrical energy for storage for firming power generation.

Australia has ambitions to emerge as hydrogen producer and exporter. It aims to use green hydrogen to aid the decarbonisation of other sectors such as heavy haulage fuel cell EVs, ammonia as a chemical feedstock for making fertilizer and fuel for shipping and co-firing for electricity generation in countries like Japan.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
02/21/24

Double climate investment to meet EU 2030 goals: I4CE

Double climate investment to meet EU 2030 goals: I4CE

London, 21 February (Argus) — Meeting the EU's 2030 climate targets requires a doubling of real-economy investments across the energy, buildings and transport sectors, a study by think-tank the Institute for Climate Economics (I4CE) published today found. Combined public and private investment of €813bn/yr is needed over 2024-30 to deliver the climate measures for energy, buildings and transport designed to meet the EU's 2030 target to cut its net greenhouse gas (GHG) emissions by 55pc compared with 1990 levels, the I4CE study found. This will require €406bn/yr of additional investment, as investment stood at €407bn in 2022 according to I4CE calculations. The figure is a "strict minimum" given the exclusion of sectors such as industry because of data gaps, I4CE emphasised. Of 22 sectors deemed "critical" to the transition by the think-tank, 20 fell short of required investment levels in 2022. The largest deficit was in passenger battery electric vehicle (EV) investment, which needs to increase by €79bn/yr, followed by electricity grids at €42bn/yr. Closely behind were onshore wind, which needs a €41bn/yr increase in investment, and "medium" — as opposed to "deep" — residential building renovation at €40bn/yr. At the other end of the scale, marine energy requires only €0.6bn/yr of further investment and new non-residential buildings' energy performance €3bn/yr, while EV charging points, light commercial plug-in hybrid EVs, and new residential building' energy performance need €4bn/yr each. The two sectors already surpassing annual investment needs in 2022 were hydropower and battery storage, I4CE found. Overall, the seven transport categories studied required the largest total increase in investment at around €147bn, followed by €137bn across the eight building categories and €122bn for the seven energy sector areas examined. Further EU funding will likely be needed as part of efforts to close these investment gaps, the study found, both for areas "by nature dependent on a degree of EU-level funding" such as trans-European infrastructure, and more generally given that the bloc's climate funding is falling with the winding down of the temporary NextGenerationEU instrument, set up to help the region recover from the economic impact of the Covid-19 pandemic. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read More
News

Australia’s Santos joins OGCI zero methane initiative


02/21/24
News
02/21/24

Australia’s Santos joins OGCI zero methane initiative

London, 21 February (Argus) — Australian independent Santos has signed the Aiming for Zero Methane Emissions initiative, which seeks "near-zero" methane emissions by 2030 from signatories' operated oil and gas assets. The project, which now has 23 signatories, was launched in March 2022 by the Oil and Gas Climate Initiative (OGCI) — a group of 12 major oil and gas companies. Santos has operations in Australia, Papua New Guinea, Timor-Leste and the US. The company produced 92.2mn bl of oil equivalent in 2023 and has set a target of net zero emissions across scopes 1 and 2 by 2040 for its equity share. The company is also looking to develop three carbon capture and storage (CCS) hubs offshore Australia, which could have a total future storage capacity of up to 35mn t/yr of CO2 — though Santos did not provide a timeframe. Its Moomba CCS project is 80pc complete and the first CO2 injection is expected in the middle of this year. Santos today also formally endorsed a World Bank initiative to eliminate routing flaring from oil operations by 2030. Santos will "will develop and implement plans to achieve its commitment under this initiative", it said. It will also report "flaring and improvement progress" to the World Bank on an annual basis, from 2025. The recent UN Cop 28 climate summit, in November-December 2023, placed scrutiny on oil and gas producers' emissions reduction plans. Companies representing over 40pc of global oil production pledged to cut emissions — including methane to "near zero" by 2030. The summit saw renewed focus on methane emissions , although the frameworks are voluntary. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japan sees potential for increased summer power demand


02/21/24
News
02/21/24

Japan sees potential for increased summer power demand

Tokyo, 21 February (Argus) — Reduced nuclear availability and firm electricity demand in Japan is lifting the potential for increased consumption of thermal power generation fuels this summer. The Japan Meteorological Agency forecasts a 50-70pc probability of temperatures during June-August 2024 rising above the 30-year average in all parts of Japan. Average temperatures in Japan's major cities, such as Tokyo, Osaka and Nagoya, during June-August 2023 were higher than the long-term average. This implies that the country is likely to face similar summer temperatures as last year. Nuclear power output is projected to fall and boost the country's thermal power demand during summer. The operating capacity of nuclear power plants could fall to an average of 7,562MW during June-August from average actual operating capacity of 9,563MW in the same period in 2023, according to Argus calculations based on data from Japan's Agency for Natural Resources and Energy and notices on the Japan Electric Power Exchange website. Hotter weather across the country in 2023 failed to lift thermal fuel demand, with power demand in Japan's 10 service areas averaging 104.3GW for June-August, down by 1.2pc from the same period a year earlier, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. The rainy season normally boosts electricity demand but sunlight hours were unusually longer in 2023 compared with 2022 that capped power use in June and July, as it boosted solar power generation to 4,645GWh in from 4,320GWh in the same period in 2022. Continued energy saving efforts also helped to cut electricity use. Japan's LNG consumption for power generation totalled 9.8mn t during June-August 2023, according to the trade and industry ministry. Coal use totalled 26.5mn t, while oil consumption — including fuel oil, diesel and crude — was 57,651 b/d. LPG use was 6,014t. By Nanami Oki and Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Thailand approves wider incentives plan for EV sector


02/21/24
News
02/21/24

Thailand approves wider incentives plan for EV sector

Singapore, 21 February (Argus) — Thailand's National Electric Vehicle Policy Board has approved a plan to offer commercial electric truck and bus purchase tax incentives, alongside cash grants for electric vehicle (EV) battery cell manufacturers. The new measures will complement the previous package it approved last year for the passenger vehicle sector. But the new measures are pending final consideration and approval by the Cabinet. Special tax deductions will be provided to eligible firms that are purchasing electric buses and trucks until the end of 2025. Firms purchasing those electric commercial vehicles manufactured domestically candeduct expenses of two times the actual price of the vehicles without a price ceiling, while deductions for imported vehicles will only be 1½ times. "We believe this will significantly increase the adoption of electric trucks and buses, reduce pollution from the transportation and manufacturing sectors, and support companies' moves to reach their net-zero targets," said Thailand's Board of Investment's (BOI) secretary-general Narit Therdsteerasukdi. The cash grants for EV battery cell manufacturers will be provided through Thailand's Competitiveness Enhancement Fund. Further details were undisclosed, other than an application submission deadline at the end of 2027 and a set of requirements. Other benefits under its Competitiveness Enhancement Act may also be provided to EV battery cell manufacturers, according to the BOI announcement. Thailand's Competitiveness Enhancement Act, which came into force in 2017, led to the country establishing the 10bn baht ($280mn) Competitiveness Enhancement Fund to invest in its targeted industries. These targeted industries include next-generation automotive and smart electronics, according to a policy monitor by the United Nations Conference on Trade and Development. The country provides tax incentives to eligible firms ranging from corporate income tax (CIT) exemption, CIT deduction, to import duties reduction under the act. Thailand's auto output in 2023 fell by 2.2pc on the year to 1.84mn units but its finished car exports rose to 1.12mn units, marking the highest figure since 2019. Battery EV registrations almost quintupled from a year earlier to about 100,000 units in 2023. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Investors push EV sector on responsible nickel mining


02/21/24
News
02/21/24

Investors push EV sector on responsible nickel mining

Singapore, 21 February (Argus) — A group of financial institutions has identified electric vehicle (EV) and battery manufacturers' shortcomings as it pressures for stronger corporate actions to ensure responsible nickel mining. The signatories directed their "expectations" at major EV stakeholders, naming global auto producers Tesla, Toyota, Hyundai Motor and BMW, as well as battery manufacturers BYD, Samsung SDI and Panasonic. The group consists of 29 investors, representing over $1.2 trillion of combined assets. It includes Dutch pension fund PGGM, Indian conglomerate Future Group, Dutch insurance co-operative Achmea and DNB Asset Management that is owned by Norway's DNB bank. "As responsible investors, we are concerned that companies that do not proactively address the social and environmental risks with the appropriate actions put long-term value creation and investment returns at risk," said the signatories on 20 February. They highlighted concerns including deforestation, higher greenhouse gas emissions and conflicts with indigenous peoples and local communities following greater public attention. The statement focused on nickel, among other critical minerals like cobalt and lithium, as nickel has attracted more public attention because of environmental risks associated with its extraction. "The single-largest growth in the demand of nickel in the next two decades is expected to come from the EV industry. However environmental impacts are often overlooked in the downstream mineral supply chain policies of EV battery producers and EV manufacturers," the group said. "Downstream companies have the responsibility to ensure that environmental and social risks are mitigated throughout their nickel supply chains." The signatories laid out three sets of expectations. They expect firms to incorporate responsible sourcing requirements in their nickel supply chains and to exercise their leverage with upstream firms to ensure responsible mining practices. Requirements include a commitment to implement and respect the free, prior and informed consent of indigenous peoples and local communities, as well as "time bound commitment" for net zero smelting and refining processes. They expect enhanced social and environmental due diligence from those stakeholders, with increased impact disclosures. They also expect "time-bound commitments" for deforestation-free nickel supply chains, citing a 2023 report by environmental group the World Wide Fund for Nature that suggested destruction of at least 273km² of forests throughout 2001-19 were caused by nickel extraction, mostly in southeast Asia. "There is no credible pathway to net zero without halting deforestation by commercial actors by 2025," said the signatories. They expect measures by 2025 the latest from those firms to "eliminate" deforestation from their nickel supply chains. Nickel from Indonesia has flooded the market in recent years. It added an estimated 1.17mn t of production during 2021-23, according to Australian bank Macquarie's research arm. Australia's nickel sector has been hit particularly hard this year, as the country scrambles to provide royalty relief and include nickel in its critical minerals list to support its producers. But a green premium on low-carbon battery grade nickel is unlikely to happen , with the Indonesian carbon footprint coming down all the time, said some market participants. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.