Powering Progress: A Review of Australia’s Clean Energy & Decarbonisation Milestones in 2023

21/12/2023

In 2023, Australia showcased global leadership in clean energy and decarbonisation. G+T's ‘Decarbonising Australia: Policy Pulse Check’ gauged progress toward net-zero, outlining legal, political, and commercial challenges. At COP28, Hon. Chris Bowen MP's Climate Change Statement aligned with launching the Capacity Investment Scheme, targeting more renewable capacity by 2030. The 'Emirates COP28 Leaders Declaration' echoed Australia's pledge to triple renewables and double efficiency by 2030. Reforms addressed sustainability standards and First Nations collaborations and the Federal Budget's significant funding for hydrogen-based renewables affirms Australia's commitment to decarbonisation.

This review summarises Australia's impactful journey in 2023, exemplifying proactive strides in clean energy adoption and decarbonisation and solidifying its position as a global advocate for sustainable practices.

1. Decarbonising Australia: Policy Pulse Check

To better understand Australia’s progress towards net zero, G+T conducted a client survey that sought feedback from active industry participants in Australia’s decarbonisation journey on our national progress towards our net zero goals, and the legal, political, and commercial challenges they are facing. The resulting report, Decarbonising Australia: Policy Pulse Check, analyses the findings from this survey.

Click here to access the report.

2. COP28 Outcome: The UAE Consensus on Climate Action

Hon. Chris Bowen MP, Minister for Climate Change and Energy tabled the Australian Government’s second Annual Climate Change Statement in Parliament which described Australia’s priorities for COP28. This coincided with the release of the Capacity Investment Scheme which provides a national framework to encourage new investment in renewable capacity, such as wind and solar, to deliver an additional 32 GW by 2030, as well as clean dispatchable capacity, such as battery storage.
On 1 December, the COP28 Presidency announced that 134 countries representing over 75% of total emissions from the global food system – including Australia, China, the US and the UK – signed the ‘Emirates COP28 Leaders Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action’.
On 2 December, the COP28 Presidency announced that over 100 countries – including Australia, the US and Canada – had signed the Global Renewables and Energy Efficiency Pledge, agreeing to triple worldwide installed renewable energy generation capacity to at least 11,000 GW and to double the global average annual rate of energy efficiency improvements from around 2% to more than 4% each year until 2030.
COP28 concluded with parties agreeing on their response to the first Global Stocktake under the Paris Agreement – the decision termed the ‘UAE Consensus’. The decision notes that global greenhouse gas emission trajectories are not on track and calls on parties to transition away from fossil fuels, encourages them to submit economy-wide National Determined Contributions, articulates a new specific target to triple renewables and double efficiency by 2030, and aims to build momentum towards a new architecture for climate finance.

See our further insights from COP28:

3. Safeguard Mechanism, Sustainability and Nature-related Risk Disclosure Standards

Following months of consultation, 1 July 2023 saw the commencement of reforms to the Safeguard Mechanism established under the National Greenhouse and Energy Reporting Act 2007 (Cth) and National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Cth).

The International Sustainability Standard Board published its first two global sustainability disclosure standards focusing on sustainability-related financial information and climate-related disclosures. They aim to provide a global baseline for companies to report sustainability-related risks and opportunities.
The Task Force for Nature-related Financial Disclosures (TCFD) launched its final risk management and disclosure recommendations, designed to be consistent with the TCFD and ISSB (among others) and again adopt the TCFD’s four-pillar framework.
Greenwashing remains a key risk with ASIC commencing civil penalty proceedings late this year in the Federal Court for alleged greenwashing conduct by Mercer Superannuation (Australia) Limited. The ACCC also issued its final guidance for businesses making environmental claims, with its eight “principles for trustworthy environmental claims”.

See our further insights:

4. Access to Land for Clean Energy Projects + First Nations Partnerships + Aboriginal Cultural Heritage

With approximately 63% of Australia's land mass being subject to Native Title claims or determinations, engagement with First Nations People is central to proposed clean energy projects. Land access, in many cases, goes to the heart of ‘social licence’ which requires community engagement and support for renewable energy infrastructure.

On 14 November 2023, the Commonwealth Government released a consultation paper to inform the development of Australia’s First Nations Clean Energy Strategy which is formulated to drive investment, cooperation, and lasting benefits to indigenous communities across Australia.
In South Australia, the Hydrogen and Renewable Energy Act 2023 (SA) introduced a “one window to government” licensing and regulatory system for large-scale hydrogen and renewable energy projects. Pursuant to this Act, First Nations people’s rights and interests will be considered early and throughout the regulatory process.
In Western Australia, the Land Administration Act 1997 (WA) was amended to introduce “diversification leases”, a new form of tenure that enables the co-existence of primary land use with other land uses. The WA Government also:
- commenced land allocation in different strategic industrial areas across the region for projects which will focus on producing hydrogen, ammonia, renewable power and other green industrial products; and
- announced an overhaul of Western Australia’s environmental approvals systems to slash ‘green tape’ following a review which found approvals processes have become overly complex, time-consuming, and costly - holding back economic development without any benefit to the environment.
However, 2023 also saw the repeal of the Aboriginal Cultural Heritage Act 2021 (WA), just 5 weeks after its commencement. The Aboriginal Heritage Act 1972 (WA) was reinstated with minor amendments, and the due diligence assessments, activity tiers, LACHs, and approvals frameworks introduced by the Aboriginal Cultural Heritage Act 2021 (WA) have all been abandoned: The Shifting Sands of WA's Cultural Heritage Landscape and The days of future past: WA Aboriginal Cultural Heritage Act to be repealed 5 weeks after commencement.

5. Federal Budget’s commitment to Hydrogen

The 2024 Federal Budget has made a commitment towards decarbonisation, including:
- A$2 billion towards the Hydrogen Headstart Program;
- $A2m committed over 2024-25 to establish a fund to support First Nations communities to engage with hydrogen project proponents and planning processes; and
- A$5.6m over 2023-24 to analyse implications for Australia of intensifying global competition for the clean energy industry.

The Hydrogen Headstart Program will use a competitive process to select large Australian-based projects seeking to produce renewable hydrogen or derivative products. Successful projects will have the opportunity to receive funding as a production credit. Decisions on the selected projects will be made next year, with six shortlisted applicants with projects across Australia recently announced by ARENA.
In October 2023, ATCO Australia and BOC were named as preferred partners to deliver the South Australian Government’s Hydrogen Jobs Plan that will see the world’s biggest hydrogen production facility, power plant, and storage at Whyalla in the Upper Spencer Gulf.

See our further insights:

Australia's Critical Minerals Strategy 2023-2030

The Australian Government published its “Critical Minerals Strategy 2023-2030” in June 2023. A key vision being that by 2030, Australia will have grown the geostrategic and economic benefits of its critical minerals sector, becoming a globally significant producer of both raw and processed critical minerals.

On 20 May 2023, Anthony Albanese and Joe Biden signed the Climate, Critical Minerals and Clean Energy Transformation Compact - a landmark joint formal statement of strategic intent to establish climate, clean energy, and a shared energy industrial base as the third pillar of the Australia-US Alliance.

See our further insights:

6. Carbon Capture and Storage and Carbon Credits

The Final Report of the independent review into the integrity of Australian Carbon Credit Units and Australia’s carbon crediting framework was released on 9 January 2023 (Final Report): Chubb review finds Australia’s carbon crediting framework is sound.
The Australian Government released for public consultation its ACCU Review Discussion Paper on 25 August 2023 which follows the publication of the Final Report. It was advised that to implement the recommendations from the discussion paper, the Carbon Credits (Carbon Farming Initiative) Act 2011 and the Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth) would need to be amended: ACCU Review Discussion Paper released for public consultation.
Amendments to Commonwealth sea dumpling legislation were passed on 13 November 2023 to enable the grant of permits for export and geological sequestration of CO2.
Western Australia followed suit with the Petroleum Legislation Amendment Bill 2023 to provide a legislative framework for the transport and geological storage of greenhouse gases in onshore areas. The Bill integrates greenhouse gas transport and storage into existing petroleum legislation, with clear permitting requirements for greenhouse gas operations: WA’s proposed carbon capture and storage bill: A readiness review.

In summary, Australia's 2023 journey showcased global leadership in clean energy and decarbonisation. Notable highlights include COP28 milestones, sustainability reforms, and the Federal Budget's commitment to hydrogen. For further information, please reach out to our contacts listed below.