Welcome to our news round-up. See previous issues here.

2 APRIL 2025

FEDERAL ELECTION ANNOUNCED

With the federal election just over four weeks away on 3 May, it is critical that Australia build on its decarbonisation progress and economic pivot of recent years, and avoid a reignition of the climate wars.

Delay might help the incumbent fossil fuel industry interests near term, but it will certainly only serve to undermine Australia’s global commitments, and our national interests in the long term.

It is time for all politicians to accept and act in alignment with the climate science, serve Australians, and propel the country towards the zero-emissions industries of the future that will underpin our sustainable economic prosperity. The community costs of failing to act are rising with every year, with, for example, more and more properties becoming simply uninsurable. We all wear the cost of delay and inaction.

CEF continues to advocate for a national electrification of everything / distributed energy resource roadmap, starting with a residential battery incentivisation program that includes apartments and extending the Federal government’s new social housing efficiency upgrades program, aligned with Renew Australia for All.

CEF continues to call for a significantly elevated ambition on reindustrialising our economy, including leveraging our world leading mining industry by value-adding pre-export, so as to build our global competitive advantage potential in firmed renewable energy infrastructure. Australia needs a long-term strategic vision and roadmap, and public-private collaborations to build on the progress of the Future Made in Australia (FMIA) so far. We need to think remotely in alignment with ‘China Speed, China Scale’ (see China Update, below).

Building a world leading green iron industry is a Australia's #1 opportunity, but this can be best done collaborating and joint venturing with our key North Asian trade partners. Public monies are needed at scale to prove up and commercialise new technology breakthroughs, particularly as we continue to wait for the development of a price on carbon in international trade. Hence, CEF continues to advocate for the development of an Asian CBAM to extend and leverage the EU CBAM, even as China expands their national ETS beyond power to include aluminium, cement and steel.

– Tim Buckley, CEF Director

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FEDERAL BUDGET:  LANDMARK GREEN METALS BOOST BUT NO NEW MONEY FOR DISTRIBUTED ENERGY RESOURCES & TAX REFORMS GO BEGGING

This year’s early pre-election Federal Budget 2025-26, released on 25 March, saw another step forward on the Albanese government's commitment to Australia’s potential future as a green metals superpower.

The government locked in its $2bn pledge for green aluminum production credits designed to decarbonise emissions-heavy aluminium smelting by supporting the switch to clean energy, and $1bn for a green iron investment fund, leveraging strategic public capital to crowd-in private investment into value-added green iron projects. 

As our partners at the Smart Energy Council noted, these developments will complement Production Tax Credits for green hydrogen and critical minerals already being delivered by the Albanese government, and help secure a future made in Australia.

Read Net Zero Transformation Analyst Matt Pollard’s full analyses of these developments in the next news item below, and see his op ed in Renew Economy.

As CEF wrote in our Green Metal Statecraft report of November 2024, repositioning Australia as a global leader in green iron has the potential to double the value of our iron exports to >$250bn pa, key to securing our economic prosperity while helping slash global steel chain emissions. Targeted national interest capital intervention is a strategic necessity to offset the cost premium of transitioning to green iron production onshore until carbon emissions are priced into international trade, and we applaud the Albanese government for definitively stepping up.

What the Budget again failed to do is provide any glimpse of a strategic long-term tax reform agenda.

Expected PRRT receipts were downgraded significantly, so rather than helping fund energy cost of living relief, the fossil gas sector underdelivered for Australians yet again, and the government underwhelmed on effectively taxing the cartel. We also failed to get any reform on the diesel fuel subsidy, which costs the Budget a mammoth $46bn over the forward estimates.

Multinational corporation tax reform remains on the to-do list, despite this being made more problematic with the self-interest of the Trump administration. We can hear already the accusations – how dare Australia expect US firms operating here (exploiting our finite public resources) to actually pay any corporate tax in Australia! 

With a cost of living election looming in a month from now, another thing we didn’t get in the Budget was any investment in distributed consumer energy resources to permanently reduce energy bills, especially for those worst impacted – something which the government’s patchwork of short-term, modest, non-means tested bill rebates will not do.

We support the call by our partners at Renew Australia for All for an immediate $5bn annual investment to support home energy upgrades and expand access to rooftop solar, batteries, and efficiency improvements, with a particular focus on those hardest hit by skyrocketing cost of living. This is less than the $6.8bn the government has allocated for energy bill relief since 2023.

Reports suggest that the Federal government will imminently announce a national policy to slash the cost of home batteries through low-cost loans or direct subsidies, as part of its pre-election platform. This is exactly the kind of policy support needed to immediately start providing Australian consumers enhanced access to a lot more distributed energy resources – particularly residential batteries to support even more rooftop solar, ground heat pumps and solar heated water tank deployments. A progressive but accelerated electrification of everything, starting with households.

This leverages the existing grid transmission and distribution structure, and can be deployed fast – in days, rather than decades, like nuclear. This could potentially be part funded from the extra $2 billion allocated to the CEFC in January, but we need to think more ambitiously, and nationally at scale.  

>>>See our media on the Budget including Renew Economy,  Pv Mag, and an interview with Tim on AusBiz. 

>>>More on Australia's energy future: Tim on SkyNews with Jaynie Seal re the headline energy story of 2025 – the disruptive power of batteries.

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$3BN IN GREEN ALUMINIUM & IRON SUPPORT & WHYALLA RESCUE PACKAGE BUILD OUR GREEN EXPORTS SUPERPOWER FUTURE

As CEF has advocated in multiple reports and parliamentary submissions, Australia needs a coherent, complementary set of financing mechanisms and incentives to embed decarbonisation into and scale Australia’s metals and minerals value-added industries. In 2025, the Federal government has introduced multiple support measures for green metals that address key interconnected pillars of CEF’s techno-industrial vision for Green Metal Statecraft.  

On 20 January, the government announced a $2bn Green Aluminium Production Credit to financially support the transition of Australia’s four aluminium smelters, our largest electricity users, to firmed renewables by 2036, significantly reducing embedded emissions in aluminium exports and showing our trade exposed industries can pivot to leverage the opportunities of near-zero emissions product demand of the future. 

On 20 February, the government announced a landmark package to salvage the only slightly still-beating heart of South Australia’s steel industry, providing the necessary strategic public intervention to salvage and catalyse the region’s transition to a nation-leading green iron and steel hub. This included: 

• $1bn Green Iron Investment Fund to support early mover green iron projects ($500m for Whyalla Steelworks and at least $500m for existing and greenfield green iron projects). 

• An additional $1.4bn joint investment by the Federal and SA governments to upgrade and develop new enabling infrastructure for a future-facing steel industry. 

• $100m immediate on the ground support for the Whyalla Steelworks.  

• $384m co-investment to fund the Steelworks operations during administration. 

On 14 March, the government announced another major step to unlocking the intergenerational green metals opportunity, a $750m injection from ARENA to boost the development and commercialisation of low-emission technologies to decarbonise value-adding of alumina, aluminium, iron and steel, from the $1.7bn FMIA Innovation Fund introduced in the 2024-25 Budget.

We now need the new Federal government to double down significantly and invest further in commercial scale first-of-a-kind technology proposals in support of our mining industry, starting with green iron.

The new measures introduced in 2025 build on the suite of support in the Albanese government’s first term, including doubling the Hydrogen Headstart Program to $4bn; a reformed Safeguard Mechanism to accelerate decarbonisation and electrification of Australia’s largest industrial emitters, including iron and aluminium; and upsizing of the Capacity Investment Scheme to 32GW to scale electrification and decarbonisation. 

However, we are not seeing global investment into clean industry technologies and decarbonisation at a speed and scale commensurate with the urgency of abating and mitigating world industry sector emissions, nor delivering on the 82% renewables by 2030 target domestically.

We need higher carbon pricing in key emissions-intensive industrial economies to drive the necessary change, as well as this pricing signal from our key Asian trade partners.

CEF’s forthcoming report explores the potential for a carbon price in intra-Asian trade of industrial commodities and value-added resources in the form of an Asian CBAM, aligned with the development of domestic carbon prices across the region, and how the harmonisation and standardisation of these can shift the world towards an international carbon price. 

>>>Read CEF’s comprehensive summary of new policy measures introduced in 2025 to support Australia’s green metal industry. 

>>>Read Matt Pollard’s full analyses of these developments in an op ed in Renew Economy.

>>>For further background see Climate Capital Forum’s response applauding the passage of the Production Tax Credit bill through the Senate to help kickstart Australian green manufacturing.

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WHYALLA WIPEOUT CONVERTED TO NEW OPPORTUNITY, WITH POTENTIAL BLUESCOPE SYNERGIES

Tim Buckley writes:

"The $2.4bn of Federal investment in the Whyalla Steelworks, in partnership with the SA government, both recapitalises the business after 7 years of defunding and neglect, and, as noted above, hopefully also underwrites the region’s transition to green iron and steel as noted above, leveraging its excellent magnetite resources. It is critical that Whyalla now be moved into the hands of a strategic consortium of aligned vested interests, both public and private, Australian and North Asian – think a JV including NRF, BlueScope and hopefully one of POSCO, JFE or Nippon Steel. 

It was great to have the opportunity to visit BlueScope’s Port Kembla steel mill this week (thanks to Mark Wakeham and BlueScope), and hear more about the progress made on decarbonisation. There are real synergies for BlueScope to add technical knowledge and financial firepower to Whyalla, but also scope to build DRI capacities in Whyalla to leverage the magnetite resources to accelerate Port Kembla’s decarbonisation journey. The visit highlighted the ongoing investment to deliver on >1% pa emissions reductions. However, to deliver on net zero by or before 2050 requires a massive stepchange in investment and board ambition. Whyalla could well provide the key to bring forward this opportunity, whilst also developing value-added DRI exports."

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BUDGET REPLY: LNP GAS RESERVATION PLAN MORE HOT AIR FROM LNP

In his reply to the Federal Budget, Federal Opposition Leader Peter Dutton pitched a new National Gas Plan which, hypothetically, would require fossil gas producers to quarantine another 10-20% for domestic consumption, decoupling prices here from international export price parity and supposedly reducing inflated domestic gas prices by ~40% as it conserves “Australian gas for Australians”. In theory, an appealing ‘Domestic Gas Reservation’ prospect for Australian consumers staggering under the cost of living impacts of hyperinflated fossil fuel energy prices.

As always, the devil is in the detail, especially when you’re being sold a plan by climate denying energy transition shysters who only yesterday were touting their $100-600bn taxpayer funded nuclear Australia scam as the panacea. Dutton’s plan involves supporting ramping up domestic production bolstered by $1bn of taxpayer subsidies for new gas infrastructure (like the $2bn Kurri Kurri white elephant?), saddling the country with climate destroying fossil gas emissions for decades to come, while delivering the foreign tax haven-based multinational gas cartel increased subsidies, production and profit.

Dutton says his plan will reduce wholesale domestic gas prices from >$14/gigajoule (GJ) to <$10. This willfully ignores gas pricing dynamics history. For 50 years, we paid just $3-4/GJ, until 2015 when gas producers contrived a domestic ‘shortage’, increased production by 300% and  simultaneously supersized their exports, and profits, by opening up 6 LNG export trains in Gladstone.

There is zero indication from Dutton as to how he proposes to effectively regulate the to-date unregulatable cartel and compel them to quarantine supplies – a major donor with outsized political influence on both sides that has made an artform of lining its own coffers as it rips off Australians.

Meanwhile, Dutton’s LNP continues to take massive donations from the same fossil fuel cartel to buy the next election. This overt ongoing corrupting conflict of interest is unlikely to serve the voters of Australia.

Dutton’s plan extends to opening up Federal Energy Minister Chris Bowen’s massively expanded Capacity Investment Scheme to subsidise new gas power plants makes no sense. There is a global shortage of gas turbines, prices have doubled and wait times extend till 2030 – in the midst of a climate emergency.

Critically, the CIS is a key driver of our accelerating rollout of renewables capacity and storage at scale, and pivotal to Australia’s chances of achieving its 82% renewables target. It would be policy insanity to derail it, exacerbated by other aspects of the Coalition's energy transition vandalism platform including scrapping Rewiring the Nation, abolishing the critical minerals and green hydrogen production tax credits, and killing off Labor’s 43% by 2030 emissions reduction target, weakening our newly established financial taxonomy on climate and possibly going as far as denying the climate science entirely, abandoning our Pacific neighbours and walking away from the Paris Agreement. Bought and paid for.

The LNP’s bona fides and expertise on energy policy have been on full display with their flagship nuclear furphy (though it is curiously downplayed in their public pronouncements of late). For future generations' sake, hopefully this nonsense will be consigned to the scrapheap of history come 3 May.

>>>See Tim Buckley’s media commentary on the LNP’s gas plan including an interview on ABC Radio National Breakfast and a Guardian op ed.

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POWER OF SOLAR & BATTERIES RESHAPES ENERGY LANDSCAPE, SPEEDING FOSSIL FUELS’ OBSOLESCENCE: NEW REPORT

CEF’s new report, led by Harry Martin, with Tim Buckley and Caroline Wang –  "International Solar PV & BESS Manufacturing Trends: Solar PV’s disruption is happening at a speed beyond imagination, turbocharged by BESS firming –  analyses the rapid acceleration in global solar deployments, with battery energy storage system (BESS) technology disruption massively compounding the solar disruption.

We find that:

• The continuing deflation in solar PV prices, soaring manufacturing capacity, and record-breaking deployments are setting off a global chain reaction that is dramatically reshaping our global energy landscape. 

• As solar installations surge toward 1,000GW per year by 2030 and BESS becomes ever more cost-competitive, hybrid systems are becoming competitive across global markets. 

• As a result, fossil fuel generation, including fossil gas peaking plants, are increasingly financially challenged. 

• Moreover, advancements in vehicle-to-grid (V2G) technology are turning EVs into ‘batteries on wheels’—a massive, untapped resource for firming power and enhancing grid reliability. EVs represent an additional 1,000GWh battery potential for Australia within the next 2 decades, supporting our potential to quadruple our rooftop solar installs to 100GW in the same time frame.

• The convergence of these trends will accelerate the electrification and decarbonisation of the global economy right at a critical juncture in the fight against climate change.

The figures are staggering. 2024 saw global solar installs reach almost 600GW, totally reshaping global energy markets. CEF expects significant further growth, with installs expected to reach 1,000GW annually as soon as 2030. CEF expects solar cell efficiency gains to expand from the current commercialised 25% levels towards 35% within a decade if long-term perovskite cell stability can be established and commercialised, potentially driving another solar step change.

Solar module prices have dropped 90% in the last decade, and are likely to halve again over the coming decade. BESS has more recently seen remarkable growth. Battery prices have dropped >80% in the same period, making firmed renewables price competitive against new thermal energy,  unlocking more of solar PV’s value and utility. This competitive advantage will grow as solar and battery deflation expands the margin over inflationary fossil fuels, and as carbon pricing increasingly is implemented. Deflation defines the now unstoppable force of solar + BESS.

China is at the centre of these shifts and is the ‘gift horse’ in this transition, adding extraordinary new industrial value as it undertakes world-leading investment in solar, battery and electric vehicle supply chains, both within China and increasingly globally. 

>>>See report lead author Harry Martin’s op ed on the report in Renew Economy, and coverage of the report in South China Morning Post and PV Tech.

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CHINA ADDS 68GW OF SOLAR IN DECEMBER, MORE THAN AUSTRALIA’S CUMULATIVE ADDS OVER DECADES

China continues to break global records in the astonishing speed, scale and acceleration of its renewable energy capacity additions and BESS projects, as shown in our latest China Monthly Energy Update covering new statistics for January-February 2025. 

In CY2024, China hit a new record of renewable energy capacity added to the grid at 356GW, with solar additions representing 65% of total capacity, up +28% yoy. 68GW of this, a full 20% of new solar capacity additions over CY2024, was completed in December alone. This is more than Australia’s entire cumulative solar capacity installed in the last few decades. 

At the end of 2024, the total installed capacity of new energy storage projects nationwide reached a record 74GW/168GWh, a yoy increase of over 130%. New BESS installations of 36GW were added in 2024. This is 49% of global additions. 

As of February 2025, China has total cumulative installed power capacity of 3,402GW, +14.5% yoy. Solar and wind power capacity totalled 1,456GW, surpassing thermal power capacity for the first time. Together renewables comprised 43% of total cumulative capacity – see Figure below.

January to February 2025 electricity consumption in China increased by 1.3% yoy, a slower growth rate after the previous corresponding period saw a huge 11% yoy growth in the same period last year. The China Electricity Council attributed this  to: 1. 2024 being a leap year; and 2. the warmer winter temperature reducing heating demand, with the national average temperature in January 1.5°C warmer than the multiyear average and 0.4°C warmer than the same period last year.

Notable climate and energy policy developments in January-March 2025 include:

• China’s first Energy Law came into force in January to accelerate the move towards a modern energy system. 

• A new offtake pricing regime for renewable energy generators was announced in February for new capacity built post 1 June 2025. This could well be the biggest reform to the sector since 2021, and will have profound and far-reaching impacts on the long-term development of renewable energy in China. 

• The Chinese government released for the first time domestic Electricity Carbon Footprint Factor Data in response to the EU’s CBAM and Battery Passport, an important milestone for the construction of China’s product carbon footprint management system. 

More on China:

>>>Tim in an extended interview on Singapore’s finance focussed Money FM 89.3.

>>>Matt Pollard writes for The Driven on the stunning rise and rise of China’s leading EV company, BYD, as Tesla self-immolates.

>>> Caroline and Tim collaborated with The Straits Times in its in-depth story on China’s clean tech global trade and investment expansion, with a focus on South-East Asia.

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TEAM UPDATES

We are delighted that Caroline Wang joined CEF as Climate and Energy Analyst, China, at the start of this year. You can reach her on caroline@climateenergyfinace.org and read her China Energy Updates here. A warm welcome also to Fatima Meneses who has joined CEF as executive assistant (fatima@climateenergyfinace.org). Read more about Caroline and Fatima here. 

Farewell and huge thanks to Harry Martin for his excellent work leading our International Solar PV & BESS Manufacturing Trends report, as he heads off to graduate school in the US to work on a Masters of Public Administration. All the very best Harry!

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AJ for the CEF team.

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