Into a renewable future: Australia’s Federal Budget 2024/25

Australia is about to become the renewable energy superpower it was destined to be, according to the latest Federal Budget.

According to the Albanese Government, the focus of the $22.7 billion from budget is on establishing Australia as a renewable energy leader and bolstering economic resilience.

The centrepiece of the 2024-25 Federal Budget, the ‘Future Made in Australia’ plan seeks to capitalise on the worldwide shift towards clean energy by fostering new industries, creating well-paid jobs, and attracting private sector investment.

“Making our future here in Australia is about making the most of our nation’s potential and making sure everyone shares in the benefits,” Prime Minister Anthony Albanese said in a press release.

A key pillar is a $3.2 billion commitment to the Australian Renewable Energy Agency to support commercialisation of critical net zero technologies like green metals, batteries and low-carbon fuels. This includes a new $1.7 billion innovation fund.

The government will also implement tax incentives to spur renewable hydrogen production ($6.7 billion) and support Australia’s 31 critical minerals like lithium and rare earths ($7 billion).

Other major investments include $1.3 billion for a Hydrogen Headstart program and $1.5 billion to strengthen battery and solar supply chains.

To attract investment and streamline approvals, $168 million will go towards faster decisions on renewable energy projects of national significance, while $17 million will support mobilising private sustainable finance.

The plan earmarks $209 million for a new Net Zero Economy Authority to coordinate the transition, along with $179 million in employment services for impacted regions.

The budget also included workforce measures of $91 million to train clean energy workers, $56 million to boost women’s participation, and $38 million to increase STEM diversity.

The suite of policies will be guided by a National Interest Framework identifying priority industries aligned with net zero and economic resilience goals. Significant investments must also meet Community Benefit Principles around local jobs and supply chains.

“This plan will help Australia build a stronger, more diversified and more resilient economy powered by clean energy,” Albanese said, framing it as an economic and strategic imperative.

Australian Energy Producers Chief Executive Samantha McCulloch said the ‘Future Gas Strategy’ released last week made it clear that natural gas will play a central role in Australia’s long-term energy security in a net zero economy to 2050 and beyond, and would need to be backed by actions to deliver new gas supply if Australia is to become a critical minerals and modern manufacturing leader.

“Australia’s oil and gas industry is critical to nation’s economy and energy security and needs to be central to the Government’s Future Made in Australia vision,” McCulloch said.

“Before we can grow our manufacturing sector, we have to first avoid the looming structural gas shortfalls facing the east and west coast of Australia from 2028. If Australia is to become a critical minerals processing world leader, as the Future Made in Australia envisages, we will need even more gas.”

Australian Energy Producers also welcomed the Budget’s allocation of $32.6 million over four years for regional cooperation on carbon sequestration, including to establish regulatory frameworks and bilateral agreements to support heavy industry to reduce emissions, both in Australia and overseas.

“Carbon capture and storage has a critical role to play in the decarbonisation of Australia’s economy and in our region,” McCulloch said.

McCulloch said the Treasurer’s goal of attracting more private capital to Australia should prioritise investment in new gas supply and position Australia for the significant LNG growth on our doorstep.

“Australia’s LNG exports were worth a record $92 billion last financial year, and LNG demand in our region is forecast to grow significantly to 2050,” she said.

“Australia has the opportunity to remain a leading producer of LNG to support the energy security and decarbonisation plans of some of our biggest trade partners.”

The Climate Council CEO Amanda McKenzie said investing billions in clean industries like critical minerals, hydrogen and manufacturing shows “gas and coal are not part of the budget’s vision” and marks an “essential signal” that future prosperity will be built on cleaner foundations.

“Building a renewable future and clean industrial base will deliver good jobs and greater prospects for Australians. This is critical to slash climate pollution and protect our kids’ future.

“The budget makes an important and overdue opening bid to claim our place as one of the world’s clean energy market leaders.”

Rewiring Australia, which advocates for household electrification, said the budget is positive for the workforce development, renewables manufacturing, and community energy resource.

“Australia needs to massively expand its pool of electricians and energy workers so they can install solar, storage and electric appliances on millions of homes and build renewable energy on the grid,” Dr Saul Griffith, chief scientist and co-founder of Rewiring Australia said.

“The Government’s $91 million commitment to accelerate the development of a clean energy workforce is vital and overdue.”

The RE-Alliance and Community Power Agency welcomed the funding for the Net Zero Economy Authority and $20.7 million for improved community engagement, but said much more is needed to ensure regional benefits and buy-in for the energy transition’s local impacts.

In an exclusive interview with Energy Today, Tim Buckley, director of Climate Energy Finance, provided insights into the Australian government’s latest federal budget and its implications for the renewable energy sector under the “Future Made in Australia” plan.

“This (Federal Budget) significantly contributes to framing the ‘Future Made in Australia’ plan. It robustly allocates resources to the enabling institutions that the federal government aims to establish, fostering a clear strategy to articulate ambitious goals and expedite the development of high-quality renewable energy,” Buckley said.

A key aspect of the budget is the $13.7 billion in production tax credits, with half allocated to value-adding in the critical mineral sector. According to Buckley, this is “a very necessary subsidy, in light of the ongoing massive interventions in other countries”.

Addressing the global energy crisis, Buckley believes these investments will positively influence Australia’s energy security.

“This budget provides a lot of financial support to accelerate decarbonisation, to build energy security, to drive electric vehicle uptake, and all sorts of initiatives that will crowd in private capital at a scale that we need,” he said, adding it would “gradually reduce our addiction to imported oil from offshore”.

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