Innovation: a vital part of Australia’s contribution to global decarbonisation
Speech delivered to Better Futures Forum, 11 September 2024.
Matt Damon stuck on Mars with a potato and an old Mars Rover might have said ‘I’m going to have to science the shit out of this’, well we with a 20th century innovation system and climate change as the quintessential 21st Century problem we (all of us) are going to have to “innovate the shit out of this’ because not only do we need science and technological options and new ideas, but we need these to be scaled in widespread systems of use that we all can accept.
Frank [Jotzo] has talked about the opportunity for Australia, based on our potential renewable energy-resources, critical minerals and our geographic position. As he has said our region is one of the most energy intensive economies, and this will increase – by 2050 close to 50% of the world’s energy will be used in the Indo Pacific.
And Frank has talked about how the opportunity is not to see this as energy export per se but restructuring of supply chains whereby the energy intensive parts such as iron ore smelting are located where the renewable energy supplies and hydrogen production are located.
Despite the pathway forward looking self-evident on the many roadmaps and analyses we see, success will not be easy. Attainable but not easy.
Some of the heavy lifting can be done by scaling existing technologies, particularly those in the energy generation sector. But as the CCA Sector Pathway Review suggests this will still require social and market innovation for them to scale – we need to build social acceptance through increase social value from decarbonisation and we need new market instruments to tackle the green premium, the price gap between existing and low emissions technologies.
While a considerable part of the challenge can cost effectively be done with existing technologies, we also need significant new technological innovation to deal with residual emissions. Most of our pathway analysis suggests ongoing residual emissions from hard to abate sectors, so we will need innovation in carbon dioxide removal technologies. Indeed, even if we could eliminate all emissions from all industry and energy generation, we still need carbon dioxide removal to bring the world back under 1.5oC since we are close to this agreed limit already and global emissions continue to rise.
The recent national science statement places science at the centre of the Government’s ambition to reshape Australia’s economy. Rightly so.
Just as Australia is endowed with renewable energy resources and with significant opportunities for carbon capture and storage which again – we are going to need to meet our net zero ambitions.
And just as Australia has a role in building resilience into global critical mineral supply chains and in exporting energy in value added products. Roles we comfortably see ourselves in.
We also have a role in building the knowledge infrastructure and the innovation processes for Australia and then exporting these where we can.
So what do we need to do? For starters, we need to scale tech, deal with climate change, build resilience, all at once. And in doing so create innovation and pathways not just for Australia but our neighbours too.
What might this look like?
Let’s start with Technological innovation.
We have a green steel session in this conference so I won’t labour the point with too much detail (mostly because it is a detailed science). But the salient points are that Australia’s iron and steel industry represents 25MT or about 5% of our emissions. If you look at value chain contribution it is 60 times that amount – because we export so much ore.
Most of our iron ore is from the Pilbara and is currently only suitable for traditional BF/BOF steelmaking – which relies on coking coal and produces high emissions (old tech, high CO2 due to using coking coal, but most prolific across the world). These Pilbara ores contain impurities that make them harder to use in green steel processes like direct reduction with hydrogen or natural gas.
Producers are working to reduce these impurities to create higher-grade ores, but many Pilbara ores are difficult and expensive to upgrade.
There is work to do on this – and the work we do can also help other countries with similar ores. Such as India who we are working with through the Australia-India partnership.
So two ways we export innovation: by upgrades – at our end – of global supply chains and figuring out how to deal with hard to process ores so others with similar ores can learn from us.
Another area where we have a big thing happening is livestock – there are a lot of cattle in our landscape. And they produce methane – about 10% of our accountable emissions. Dialling down methane emissions is a really fast lever to pull to reduce atmospheric warming.
Australia has been investing hard and leading the world in anti-methanogenic livestock feedstock supplements. We now see scaling of Asparagopsis production by licensees of Australian IP in the US, New Zealand, Canada and Europe, and Australian producers starting to look at building production and exports to South America.
More generally Australia is good at agricultural innovation – and agriculture is going to be a long term, hard to abate sector. We deal with agricultural systems more typical of emerging economies – either dry and on old land surfaces like Africa, or with tropical and sub tropical agriculture like Asia. We can help not just ourselves but these nations as we build new cost-effective emissions reductions technologies.
Social innovation
We hear too often about contestation in the role our of renewables. Not just here but around the world and I think Australia can show ways to engage communities and do things differently. But we are going to be exposed to climate change effects – harshly. Perhaps not to the extent of low-lying parts of the world like our Pacific neighbours, but we are a hot nation and warming more rapidly than many parts of the world. We can think forward to the adaption/mitigation nexus and create templates for action.
The story of Cobargo
I think the story of Cobargo is an interesting one. We saw communities become active participants in their resilience, in their adaptation and ultimately their future. And we see the important merging of adaptation and mitigation needs.
In 2019-2020 bushfires devastated the NSW South Coast township of Cobargo destroying 370 homes and damaging 98 others. IN the aftermath of the bushfire, electricity to the town and surrounding areas was cut for many days and in some cases many weeks.
No power – no drinking water, no ability to pump sewage, no communications, no ATM cash access, no petrol pumps, no fridges or freezers and so on. The lack of power compounded the devastation caused by the bushfire.
In the immediate aftermath local volunteers held community meetings to inform the recovery and rebuilding. From this discussion emerged a desire to improve energy security and resilience – building on a prior desire to shift to renewables anyway but there was a strong emphasis post fire on resilience. Multiple participatory processes led to initiate a microgrid project– a small-localised power grid that would allow a portion of Cobargo to stay powered during an outage using local generation.
Looking forward the community is exploring how governance affects community wellbeing – having the community identify which buildings are islandable say as heat safe havens, as part of infrastructure build can they employ a local energy advisor to work with the community of broader issues of residential redesign and energy efficiency. There is a fundamentally important shift here, communities are not just considered a consumer of the energy system but as active participants and beneficiaries in the broadest sense of energy system creation and management. And importantly mitigation is being coupled with resilience and adaptation needs.
Sustainable Aviation Fuels
Lastly, I want to look at the emerging Sustainable Aviation Fuel industry in Australia and market innovation. Or at least how we understand the interactions of markets and regulations with our mitigation aspirations.
Australia needs to be part of international market regulatory systems that allow the rapid building of a global biofuel system.
Biofuels can help reduce emissions from the aviation while we work on technological innovation to make synthetic fuels made from green hydrogen and captured CO2 , more affordable. But biofuels face the classic mid transition problem – we need the old systems (like traditional fuels) while we build the new ones. You will know this in light vehicles – we still need petrol stations while we need to double up and build EV charging stations. SAF is the same on a different scale, biofuels are blended with traditional fuels since airport fuel infrastructure doesn’t yet support separate fuel streams. Building large-scale biofuel plants, is a really big infrastructure price step, especially in Australia using lignocellulosic feedstocks, requires significant investment.
Co-processing, where a small amount of biofeedstock is mixed into regular fuel, is a good interim step till demand is sufficient to underpin infrastructure investment.
Tracking which flights use green fuel is therefore tricky, – how do you know how many green biofuel molecules are in each airplane fuel tank –this requires market innovations like the “book and claim” system, where airlines buy green fuel credits for fuel they buy into the broader system even if their flight uses regular fuel.
Food vs Fuel:
The second thing I want to consider with SAF is the food versus fuel nexus embedded into many international regulatory environments such as CORSIA and REDIII. In Australia, rotational grazing and cropping help maintain soil health and reduce fertiliser use . This is not so common on the richer and younger soils of Europe for example. In the wetter parts of the country this is often done with Canola and in the drier parts new non-food crops like Carinata are being considered. Both are used in the HEFA process for producing biofuels. This new energy/food rotational cropping is building sustainable agriculture and contributing to emissions reduction (both through reduced fertiliser input and biofuel production). But Australia needs to ensure international regulations do not prejudice agricultural practices necessary for countries of similar agricultural systems to ours, and stop the use of these more sustainable options.
There is a lot to do here
For the innovation we need to land this, all of these things, we need to work differently. We need to see the boundaries of the innovation system and our problem definition more expansively. Innovation will not be bounded in our borders we need to innovate along value chains and work globally in designing a regulatory and compliance regime that does not penalise our peculiarities. But we also need to look at how innovation with our neighbours can assist them in the net zero transition – recognising that climate change will hit many of them disproportionately hard.
We need build new partnerships between government, communities, industry and science that drive not just to the feasible but the collectively agreed. And we need to think of the temporal flow of innovation required – scaling of extant technologies, building the next wave and doing this while dealing with a changing climate so we link mitigation/adaptation and resilience needs.
And if we can do that, if we can show how to build an inclusive and just transition we might really have done something for the world.