Report: Australia’s Biggest Future Export Opportunity Hinges on Pilbara

Australian think tank Climate Energy Finance (CEF) published a report on how accelerating the electrification and decarbonisation of the Pilbara region can help achieve the country achieve its green export goals.

Called “Superpowering-Up,” the report was written by Matt Pollard, net-zero transformation analyst at CEF, and Tim Buckley, a director at the organisation. It was made available to the public on August 13.

One of the report’s main findings is that a single common-user grid infrastructure in the Pilbara area would be the key catalyst in speeding up decarbonisation in the region, which is the “engine room” of Australia’s resource sector.

CEF believes that although China currently dominates cleantech leadership, Australia has the opportunity to take the lead in green iron production, which it says is the country’s top emerging export opportunity.

The organisation also sees strong potential for Australia in areas like green hydrogen and green ammonia. However, the country won’t be able to unlock these opportunities without electrifying and decarbonising the Pilbara area.

Under its list of recommendations, CEF includes three ways mining giants such as BHP (ASX:BHP,NYSE:BHP,LSE:BHP), Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) and Fortescue (ASX:FMG,OTCQX:FSUMF) can contribute.

First, there is a need for companies to “(b)ring together their globally leading financial and technological corporate power into a robust and sustained Pilbara-wide industry collaboration on common-user energy infrastructure in the region.”

The report identifies APA (ASX:APA) and BP (LSE:BP,NYSE:BP) as “well positioned” to take the lead on aggregating existing grid transmission and generation into a single common-user grid infrastructure system.

The second recommendation focuses on investing in accelerated decarbonisation plans at each of the companies’ Pilbara operations. The report says that there is a need for firms to “rapidly deploy their balance sheets’ firepower.”

“While BP (via its majority-owned AREH), APA and Fortescue are leading, BHP and Woodside Energy (ASX:WDS,LSE:WDS,OTC Pink:WOPEF) are failing to adequately respond to the material risks of the climate crisis, looming regulatory penalties for carbon-intensive production, and the opportunities to invest at speed and scale into energy transformation,” CEF states in its report. It goes on to add that Rio Tinto is already working on energy supply decarbonisation at its aluminium operations and should extend those efforts to the Pilbara region.

Lastly, CEF asked major resources companies to use their economic influence — namely job creation, royalties and corporate taxes — to push the Western Australian government to adopt more ambitious climate and energy policies. The think tank said that the government is falling behind in these endeavours compared to nearby states.

“This boost in ambition needs to be on a scale commensurate with both the climate challenge and the immense economic…