Western Australia is at a critical juncture in its energy transition journey. Its world-class mineral endowment, abundant renewable resources and established trade relationships position the state to lead the global race to cut emissions while simultaneously unlocking a new era of economic growth. The state and federal election results have delivered the surest policy backdrop in more than a decade, giving stakeholders in the energy and resources sector the certainty needed to make significant investments. This article addresses how those stakeholders can realise Western Australia’s competitive advantage and navigate the legal and regulatory issues that accompany large-scale industrial decarbonisation.
Western Australia’s competitive advantage
Western Australia boasts vast mineral reserves, substantial gas reservoirs and an abundance of solar and wind resources. When these natural advantages are coupled with deep-water ports, a highly skilled workforce, and the strategic industrial areas in the Pilbara, Kwinana, Mid-West, and South-West, the state is primed to:
produce low-cost renewable electricity at scale
convert iron ore into green iron and green steel
manufacture low-emission fertilisers, critical-mineral concentrates and battery chemicals
become a regional platform for downstream processing of critical inputs required by trading partners in North-East Asia and Europe as they pursue net-zero objectives.
Realising this opportunity, however, demands major investment in enabling infrastructure - not just in generation and transmission, but also pipelines, desalination plants, ports, roads, rail, common user facilities and precincts, and carbon capture, utilisation and storage (CCUS). Stable, robust and forward thinking economic reforms and incentives are also needed to support the substantial investments required by the private sector to compensate early movers and to demonstrate the government’s commitment to support these growing sectors.
Regulatory compliance and policy alignment
In developing the infrastructure required for large-scale decarbonisation, the private sector must navigate an evolving regulatory landscape across both state and federal jurisdictions, in particular:
Pilbara Network Rules and the Pilbara Networks Access Code (PNAC) which are being evolved by Energy Policy WA to implement the Pilbara Energy Transition Plan.
State government’s CCUS Action Plan, including the Petroleum Legislation Amendment Act 2024 (WA) and supporting regulations, procedures and guidance (under development).
Commonwealth Safeguard Mechanism, which in conjunction with the National Greenhouse and Energy Reporting Scheme requires companies with specific activities that have high levels of direct emissions to keep their emissions below a baseline or manage any excess emissions through the purchase of Australian Carbon Credit Units (ACCUs).
Western Australia’s Renewable Hydrogen Strategy and Australia's National Hydrogen Strategy (both of which were updated in 2024 from previous iterations released in 2019).
Exports must also contend with overseas regimes, notably, the European Union’s Carbon Border Adjustment Mechanism, which will impose costs on imported products that fail to meet stringent emissions standards. Demonstrating the carbon credentials of Western Australian exports therefore demands rigorous measurement, reporting and verification of emissions. Complications may also appear in the recognition of Australian certification schemes in overseas jurisdictions.
Structuring commercial relationships in a decarbonising world
Decarbonisation accelerates when miners, technology companies, the government and Traditional Owners combine their respective expertise and knowledge. In Western Australia, examples of this collaboration are already appearing:
Neosmelt collaboration between BlueScope, BHP and Rio Tinto for the development of an electric smelting furnace.
Collaboration between industry (including Yindjibarndi Energy Corporation and APA), the state government and Traditional Owners for the construction of transmission lines across two corridors of the Pilbara as part of the Pilbara Energy Transition plan.
Greentech Hub, launched in collaboration between the state government, the Chevron-operated Gorgon Project and funded by the Gorgon Joint Venture, which aims to support and grow local emerging and established green technology businesses and drive innovation in support of a sustainable low carbon future.
Parties entering collaborative arrangements must address the allocation of risk and liability, the protection of intellectual property and cross-border regulatory compliance at the outset, while being acutely sensitive to and accommodating the requirements of Indigenous communities which are impacted by these projects. Consequently, the need for diversity, cultural awareness and strategic thinking is critical to ensure that projects are developed in a balanced, sustainable and economic manner.
Cross-border investment
Amid growing uncertainty in global trade, Western Australia must deepen ties with trusted international partners. Its strongest trading partners – China, Japan and Korea – also have the greatest appetite for reliable supplies of low-carbon materials. Developers will therefore need expertise in:
negotiating long-term offtake agreements
Foreign Investment Review Board (FIRB) approvals
obtaining mutual recognition of sustainability standards.
The global race to decarbonise is likely to be accompanied by increased protectionism and a heightened risk of trade disputes. These risks may be mitigated through the inclusion of dispute resolution mechanisms in trade agreements, the establishment of robust compliance programmes and proactive engagement with regulators and industry bodies.
Facilitating project development and financing
The size of the prize is large: Western Australia could power an industrial base many times larger than today’s if its renewable-generation capacity is built to its full potential. Achieving that scale will require innovation capital structures. Green finance, such as sustainability-linked loans and green bonds are becoming increasingly common but demands demonstrable compliance with science-based targets and environmental, social and governance standards. Borrowers must understand the legal implications of these targets and standards being linked to their access to finance in order to avoid unforeseen risks.
Infrastructure and market design
The rapid retirement of ageing power generation underscores the need for accelerated transmission investment, large-scale storage and ancillary services to maintain grid security. Key legal considerations include:
access and easement arrangements over Crown land and native title areas
environmental approvals for high-voltage corridors
third-party access negotiations where privately financed networks seek regulated returns
Corporate governance
Climate-related risks are no longer a discrete sustainability topic - they fall squarely within directors’ duties to act with care and diligence and to avoid misleading disclosure. ASIC and the ACCC have signalled their willingness to pursue enforcement against ‘greenwashing’ – a term used to describe false or misleading environmental claims. Boards who are overseeing decarbonisation projects should therefore:
Adopt formal transition plans with clear interim milestones aligned to a well-defined emissions-reduction pathway.
Stress-test those plans against multiple policy and market scenarios, including a carbon price trajectory consistent with a 65-75 per cent national reduction by 2035.
Link executive remuneration to tangible progress.
Embed an internal assurance process for data underlying public statements and financial filings.
By demonstrating mature climate governance, Western Australian proponents will ultimately attract a deeper pool of capital, lower their cost of funding and differentiate themselves in markets that increasingly require embedded-carbon disclosures.
Conclusion
The global decarbonisation agenda is entering a pragmatic phase, driven by national security, industrial policy and the economics of ever-cheaper renewables. Western Australia’s unparalleled resource base, proximity to Asian demand centres and proven record of complex project delivery position the state to become a cornerstone supplier of low-carbon industrial inputs.
Developers who anticipate regulatory change, forge resilient partnerships and embed credible transition pathways into their legal and commercial structures will be best placed to lead the cutting-edge projects in these emerging industries - ensuring Western Australia remains, not merely a resource powerhouse of the past, but a clean-energy super-province of the future.