Draft IPPU Emissions Reduction and Resilience Plan

Consultation questions

These questions are designed to guide your feedback on this draft Plan for the Industrial Processes and Product Use (IPPU) sector. Your feedback will help us develop the final Plan. We encourage you to read this draft Plan before you make a submission.

1. What future opportunities do you think will have the most impact in the IPPU sector in Tasmania? (Future opportunities are summarised on page 2.)
2. Are there any priorities or future opportunities for the IPPU sector missing from this draft Plan?
3. How can we collaborate to reduce emissions and build resilience in the IPPU sector?

Key dates

Draft Plan released:                  3 September 2024

Written submissions close:      7 October 2024

How to have your say

You can make a submission by writing to us, answering the above consultation questions. You can submit your response online, or by email or post.

For more information about this work, or making a submission, please contact the Climate Change office.

Online: www.recfit.tas.gov.au/consultation

Email: climatechange@recfit.tas.gov.au

Post: Climate Change Office,  Renewables, Climate and Future Industries Tasmania,  Department of State Growth,  GPO Box 536, HOBART TAS 7001

Phone: 03 6166 4466

If you are making a written submission, please include the name and contact details of the person or organisation making the submission. All submissions are welcome and valued.

Publication

Submissions will be published on the Renewables, Climate and Future Industries Tasmania (ReCFIT) website (www.recfit.tas.gov.au). Your name or the name of the organisation making the submission will be made public. Personal contact details will not be published. Please tell us if you want to keep your submission private. Defamatory or offensive material will not be published.

Tasmania’s Climate Change (State Action) Act 2008 (the Act) sets out how the government must take action on climate change. Under the Act, Tasmania’s emissions reduction target is to achieve net zero greenhouse gas emissions, or lower, from 30 June 2030. To help achieve this goal, the Act requires the government to develop five‑yearly sector-based Emissions Reduction and Resilience Plans (Plans) in consultation with business and industry. The Plans will support a practical and balanced approach for our key sectors to reduce greenhouse gas emissions and build resilience to climate change.

The Plans must support greenhouse gas emissions reduction, the transition to a low emissions economy, and resilience to climate‑related risks. The legislation also requires that the objects of the Act are taken into account during the development of the Plans. The objects of the Act include supporting emissions reduction, adaptation and a consultative partnership approach action on climate change.

Plans must be developed for the following sectors:

• energy
• transport
• industrial processes and product use (IPPU)
• agriculture
• land use, land use change and forestry (LULUCF)
• waste
• any other sector or sub-sector determined by the Minister (the government has committed to develop a Plan for government operations).

A whole-of-economy roadmap outlining the links and cross-cutting issues between all sectoral plans and Tasmania’s first statewide climate change risk assessment will also be developed.

Delivery and timeframes

Under the Act, the Plan for the IPPU sector is to be prepared by November 2024. The Minister responsible for climate change is to consult with each relevant portfolio Minister, and with business and industry representatives, to develop the Plans. The Minister is also required to publicly consult on each draft Plan.

The Plans are to be tabled in Parliament and updated at least every five years.

This work is being led by the Climate Change Office in ReCFIT in collaboration with relevant portfolio agencies.

Why sector-based emissions reduction and resilience planning?

The latest data[1] show that Tasmania recorded net zero greenhouse gas emissions for the first time in 2014 and has maintained its net zero status in the nine reported years since. Our emissions profile is largely due to the carbon sink in our managed forest estate and our longstanding investment in renewable electricity generation.

However, our emissions profile is not guaranteed into the future. Emissions are influenced by a range of factors such as population growth, major bushfire events, changes in consumer demand, market forces, and technological advancements. We know we must do more to maintain our net zero status by reducing emissions in all our sectors.[2]

The AR6 Synthesis Report: Climate Change 2023 by the Intergovernmental Panel on Climate Change (IPCC)[3] confirms that humans are causing global warming and makes it clear that we need to act now. Global temperatures are now 1.1˚C above pre-industrial levels and are likely to reach 1.5˚C above pre‑industrial levels in the early 2030s. In Tasmania, the environmental, economic and social impacts of climate change are already affecting our business, industries communities, built environment and our natural values. It is important that we adapt effectively to a changing climate and build strong, resilient communities, while continuing to reduce our emissions.

A consistent theme from consultation on the government’s action on climate change is that partnership between government and industry is the preferred approach to support emissions reduction and build resilience in Tasmanian businesses and industries.

Purpose of this consultation draft Plan

This draft Plan has been developed to support the public to provide feedback on priority areas and future opportunities for the IPPU sector. These priorities and opportunities have been identified through targeted consultation with business and industry. The proposed priority areas and future opportunities are outlined in the section “Priority areas for reducing emissions and building the resilience of Tasmania’s IPPU sector”.

Funding for the sectoral plans

The feedback from consultation on all plans will help us identify the priority actions to deliver with available funding, as well as future funding priorities to inform budget and planning processes over the five‑year life of the plans.

This Plan builds on the $25 million that has already been invested by the Tasmanian Government to support businesses in the IPPU sector to reduce emissions and build resilience to climate change.

The Tasmanian Government will also seek to maximise the opportunities for Tasmania through relevant Australian Government initiatives, including the development of national sectoral decarbonisation plans.

[1] Tasmania’s latest reported greenhouse gas emissions were released in April 2024 as part of the Australian Government’s National Greenhouse Accounts 2022 and State and Territory Greenhouse Gas Inventories 2022. The Australian Government reporting framework is consistent with UNFCCC and Paris Agreement reporting rules. National inventory reporting runs two years behind the current date and represents the most recent official data in Australia on annual emissions.

[2] Point Advisory and Indufor 2021, 2021 Update of Tasmania’s Emissions Pathway Review – technical report (prepared for the Tasmanian Climate Change Office) www.recfit.tas.gov.au/__data/assets/pdf_file/0009/492093/Tasmanian_Emissions_Pathway_Review_-_Technical_Report.pdf

[3] IPCC 2023, Climate Change 2023: Synthesis Report - Summary for Policymakers, www.ipcc.ch/report/ar6/syr/

Timeline

• November 2023 - Targeted consultation with government, business and industry. We undertook consultation with relevant government, business and industry representatives in November 2023, including two workshops, and one-on-one meetings.
• Mid 2024 - Public consultation on the draft plan. The feedback from consultation with government, business and industry has informed the development of this Emissions Reduction and Resilience Plan - Industrial Processes and Product Use: Consultation Draft (draft plan)
• November 2024 - Development and release of final plan. We will analyse all submissions received and undertake further targeted consultation as required to develop the final plan. The plan is due to be prepared by November 2024 as required under the Act.

Key themes from consultation with government, business, and industry

In late 2023 we consulted relevant government, business, and industry stakeholders, including through a workshop. Participants told us what they are doing to reduce emissions and build resilience in the IPPU sector, the barriers and opportunities for further action, and how the government could support the sector to take action on climate change. Participants gave their views on the priority areas for action.

Key themes included:

• Progressing research and development in new technologies, including alternative energy generation and product innovations.
• Support for enhanced government regulatory frameworks to provide efficient approvals for trials of new production processes or products.
• Opportunity for government leadership through procurement, supporting the development and use of innovative and low emissions technologies and products.
• Collaboration between large industrials on opportunities for decarbonisation and recognising the work of those that have developed strategies to decarbonise.
• Improved business resilience in the transition to a low emissions economy, including workforce requirements and skills necessary for the adoption of new low emissions technologies and production processes.
• Sharing of data and information to assist in planning for future resilience and to support investment in the IPPU sector.

The sectors identified for the development of Plans are based on the sectors in the United Nations Framework Convention on Climate Change (UNFCCC) greenhouse gas reporting framework.

Under the UNFCCC reporting framework, Tasmania’s emissions from the IPPU sector include direct emissions from a range of chemical processes used to manufacture products, in addition to the use of synthetic greenhouse gases and fossil fuels for non-energy purposes.

The majority of Tasmania’s IPPU emissions are from the manufacture of metals and minerals, followed by the use of synthetic greenhouse gases such as HFCs and SF₆. The Australian Government has the regulatory responsibility for the phase-out of HFCs under the Montreal Protocol. The remaining sub‑sectors combined make up less than 1 per cent of total IPPU emissions. The Plan will focus on the largest IPPU emissions sources for Tasmania.

The Plan will also consider the resilience of Tasmania’s IPPU sector to the impacts of climate change and the transition to a low emissions economy. The physical impacts of climate change and extreme events will affect industrial processes and supply chains to varying degrees. Demand for low emissions products and a changing regulatory environment will also impact businesses’ competitiveness and access to markets.

Due to the nature of the IPPU sector and the UNFCCC reporting framework, there is significant overlap between the IPPU and energy sectors. Emissions associated with the stationary energy and combustion of fossil fuels used in industrial production processes are accounted for in the energy sector, while the emissions from the processes themselves are accounted for in the IPPU sector. For example, the emissions from the combustion of coal for heat during the manufacture of cement are reported as energy emissions, and the emissions from the calcination of cement clinker are reported in the IPPU sector.

There may be initiatives or programs identified in the Plans that lead to reduced emissions from both stationary energy uses and industrial processes. In these instances, the initiatives will be reflected in both the IPPU and energy Plans.

The future opportunities identified in the Plans for each sector will be combined and inform the development of Tasmania’s next climate change action plan. Preparation of the next action plan will include the identification of priorities and gaps not addressed through the development of the sector‑based Plans.

How have the priority areas and future opportunities in this consultation draft Plan been identified?

We prepared a State of Play Report (Report) informed by research, analysis and targeted consultation with government, business and industry. The Report summarises the IPPU sector in Tasmania, its emissions, impacts of climate change on the sector, opportunities, challenges and barriers to reduce emissions and build resilience, and relevant policies and actions at the local, national and international level. The Report is available on the ReCFIT website: www.recfit.tas.gov.au/policies_strategies_plans/emissions_reduction

The State of Play Report provides the foundation for the priorities and future opportunities in this Plan. The future opportunities under each priority area have been identified to address any gaps in current activity and help to reduce the barriers to action on climate change in the IPPU sector in Tasmania. The opportunities are intended to complement and build on the work already underway by international, national, and local governments, business and industry, and the community. Action on climate change is a collective responsibility where all levels of government, business and industry and the community have a role to play.

Research and resources

Key considerations in the development of the Report and the Plan include:

• alignment with existing Tasmanian Government policies, including the Tasmanian Advanced Manufacturing Action Plan 2024 [1] and  Memoranda of Understanding (MoU) with industrial businesses
• our legislated target to ensure Tasmania’s emissions are net zero, or lower, from 2030.
• the other objects of the Act, including adaptation, contribution to international, national and local government action, and supporting a consultative partnership approach to action on climate change
• feedback from consultation on Tasmania’s Climate Change Action Plan 2023-25 [2] (Action Plan)
• the 2021 Tasmanian Emissions Pathway Review [3]
• the principles of sustainable development and social equity, transparency and reporting, science‑based approach, integrated decision making, risk management, community engagement, and complementarity (as outlined in the Action Plan)
• analysis of additional resources and policies, including initiatives being implemented in other jurisdictions, and reports by peak industry bodies such as Decarbonisation pathways for the Australian Cement and Concrete Sector (2022) [4] and HILT CRC Heavy industry low-carbon transition [5].

Priority areas

Through targeted consultation, research and analysis, we have identified key priorities and future opportunities to reduce emissions and build resilience in Tasmania’s IPPU sector. The key consultation themes highlight that there is no one-size-fits-all approach to reduce emissions and build resilience in the IPPU sector. A holistic, flexible approach is required to meet the diverse needs of Tasmania’s major industrial businesses and ensure we can make the most of opportunities presented by emerging technologies.

We have grouped the key themes into five priority areas for action:

1. Supporting research and development into new technology and production processes.
2. Streamlining regulatory and policy frameworks to support the adoption of low emissions technologies and processes.
3. Supporting the transition to a low emissions economy.
4. Driving action through partnerships, collaboration and information sharing between governments, industry and key stakeholders.
5. Building the resilience of the IPPU sector to the physical risks of climate change.

The future opportunities in this draft Plan are intended to guide public consultation to help us identify the priority actions to progress under the final Plan.

Consultation questions

To help us develop the final Plan for the IPPU sector, we want to hear your thoughts about the priorities and future opportunities outlined on the following pages.

1. What future opportunities do you think will have the most impact for the IPPU sector in Tasmania?
2. Are there any priorities or future opportunities for the IPPU sector missing from the draft Plan?
3. How can we collaborate to reduce emissions and build resilience in the IPPU sector?

[1]www.stategrowth.tas.gov.au/__data/assets/pdf_file/0011/136568/Tasmanian_Advanced_Manufacturing_Action_Plan_for_web.pdf

[2] www.recfit.tas.gov.au/what_is_recfit/climate_change/action_plan

[3] www.recfit.tas.gov.au/__data/assets/pdf_file/0009/492093/Tasmanian_Emissions_Pathway_Review_-_Technical_Report.pdf

[4] cement.org.au/wp-content/uploads/2021/11/Full_Report_Decarbonisation_Pathways_web_single_page.pdf

[5] hiltcrc.com.au/wp-content/uploads/2022/11/HILT-CRC-corporate-brochure-2022.pdf

1. Supporting the use of existing decarbonisation technology, and research and development into new technologies

The targeted consultation process highlighted that an important step to reduce emissions from the IPPU sector is investing in research and development of new technologies in the production of metals and minerals in Tasmania. The low emissions substitutes for most production processes are at varying stages of development and will take time to be commercialised and become economically feasible to implement at scale. Initiatives are already underway to reduce emissions for many of Tasmania’s major industrial businesses, including research into decarbonisation pathways for production processes, and investment in energy efficiency. Emerging opportunities to consider include the use of automation, advanced data analysis and artificial intelligence, and how these opportunities can support decarbonisation of industry.

The future opportunities in this priority area and throughout this draft plan are designed to assist the sector to overcome the barriers to adoption, make the most of the co-benefits, and build on the work already underway.

Benefits

• Investing in research and new technologies has the potential to create new jobs and skills in Tasmania, especially in regional areas.
• Increasing energy efficiency from new technologies and processes can improve productivity and economic outcomes for businesses and reduce greenhouse gas emissions.
• As Tasmania’s emissions are currently net zero and we have a strong renewable energy sector, we are well-placed for businesses to trial and test new low emissions technologies.

Barriers

• The high cost of new technologies, not yet commercialised or readily available for businesses, may require specialist skills and expertise to install and operate. Existing emissions-intensive technologies are often cheaper, readily available, and easily accessible in the current market.
• Many new low emissions technologies are in the early stages of development, so there will be delays until these technologies are commercialised. New technologies may have high up-front costs to install and commission.
• Regulatory pathways can slow down the ability for businesses to trial new low emissions technologies and production processes, which may impact the financial viability of solutions and potentially delay production.

Current action

Tasmanian Government

• The government has committed $4 million to establish a crumb rubber plant to develop low emissions alternatives to road pavement materials for road construction projects.
• Funding of $20 million has been committed towards an expansion of the Nyrstar zinc smelter that will deliver a new electrolysis plant. This will address safety and environmental issues as well as improve production capacity, resulting in more zinc produced for less power. This upgrade project is currently on hold as global economic conditions change and costs rise.
• The Tasmanian Advanced Manufacturing Action Plan[1] supports the advanced manufacturing sector to grow its capabilities and become more successful and sustainable, through leading-edge design, innovation, technologies, and practices to deliver growth and improved business capability. A new Action Plan is set to be released in October 2024 that will cover the next four years.

Australian Government

There are various Australian Government funding opportunities and programs available to support research and innovation in emissions reduction in Tasmania’s industrial sector.

The $1.9 billion Powering the Regions Fund (PRF), under the Powering Australia Plan [2], supports regional Australia’s transition to net zero emissions. This fund includes the $50 million Safeguard Transformation Stream [3] grant program to assist industry to reduce emissions, reduce the risk of carbon leakage (which occurs when a business responds to emissions reduction policies by moving emissions‑intensive production to a country with less stringent policies), and provide skills development to existing workforces in new equipment or processes that contribute to the reduction of scope 1 emissions.

Through the PRF, the Australian Government recently awarded $330 million to nine projects to reduce emissions, including four projects in Tasmania. Liberty Bell Bay manufacturing site has been awarded $700,000 to trial the production of biochar as an alternative to using coking coal in the smelting process. The other three Tasmanian projects have been awarded to Grange Resources at the Savage River Iron Ore Mine and the Port Latta Iron Pelleting facility, and Cement Australia for energy efficiency and electrification upgrades.

The $15 billion National Reconstruction Fund Corporation [4] (NRFC) invests in priority areas to assist Australia’s industries, including renewables and low emissions technologies, medical science, transport, and defence, and enabling capabilities such as engineering and data science.

Industry research organisations

There are several research and development programs underway across Australia to develop new low emissions technologies and production processes for the IPPU sector.

The Heavy Industry Low-Carbon Transition Cooperative Research Centre (HILT CRC) is investing over $200 million for collaboration between industry, research, and government to deliver three industry-led research programs to de-risk technology pathways for the decarbonisation of heavy industry. Grange Resources and Liberty Steel Group have locations in Tasmania and are Core Partners of HILT CRC, and the CEO of the Tasmanian Minerals, Manufacturing and Energy Council is a current director of the CRC. Each research stream includes a range of outputs. The research programs are focused on process technologies, cross-cutting technologies, and facilitating transformation.

The Australian Government has engaged HILT CRC to fulfil Australia’s co-leadership role in coordinating knowledge, sharing benefits, and building further international networks on heavy industry decarbonisation. The Tasmanian Government is yet to become a member of HILT CRC, although this is an opportunity that could allow greater collaboration and engagement in research and innovation for the sector.

The Australian lime, cement and concrete industries commissioned two studies by world-renowned research centre VDZ to better understand technologies, pathways and practices necessary to decarbonise the Australian lime sector[5], and the cement and concrete sector[6]. The study for the cement and concrete sector will assist the industry to meet its declared ambition for the cement and concrete value chain to decarbonise by 2050.

The resulting VDZ reports identified five decarbonisation pathways for the lime sector and eight pathways for the cement and concrete sector, and included assessments of technology readiness, value chains and research requirements. Engagement plans are being developed to implement the key recommendations of the reports.

Pathway forward

As a large amount of the emissions in the production of metals and minerals are from energy use, the focus on emissions reduction for industry is often directed at electrification. However, alternative low emissions technologies to reduce emissions from the production processes are also being developed globally for the hardest to abate sectors There are opportunities to support the research and development of these processes in Tasmania. The adoption of these technologies will be important for Tasmanian businesses in the sector to remain competitive in the transition to a low emissions economy and continue to meet the requirements of the Safeguard Mechanism.

New technologies and low emissions alternative processes to produce metals and minerals result in products that are referred to as ‘green’, such as ‘green steel’ and ‘green aluminium’. Options to extend funding already committed by the Tasmanian Government to produce crumbed rubber could be expanded to include low emissions concrete production or green steel for building projects in the future. There may be opportunities to implement circular economy solutions in the industrial sector, which can be explored further in collaboration with industry. Future opportunities to support the decarbonisation of Tasmania’s manufacturing industry are outlined below.

[1]  https://www.stategrowth.tas.gov.au/__data/assets/pdf_file/0011/136568/Tasmanian_Advanced_Manufacturing_Action_Plan_for_web.pdf

[2] www.dcceew.gov.au/energy/strategies-and-frameworks/powering-australia#toc_1

[3] business.gov.au/grants-and-programs/powering-the-regions-fund-safeguard-transformation-stream-round-1

[4] www.nrf.gov.au/what-we-do/investment-guidance

[5] www.cement.org.au/wp-content/uploads/2023/06/Decarbonisastion_Pathways_Australian_Lime_Sector.pdf

[6] www.cement.org.au/wp-content/uploads/2021/11/Full_Report_Decarbonisation_Pathways_web_single_page.pdf

2. Streamlining regulatory and policy frameworks to support the adoption of low emissions technology

The consultation process identified that a barrier to implementing and trialling new technologies and alternative production processes is regulation. Feedback indicates that some regulatory frameworks currently lack the flexibility to quickly trial new technologies, for example implementing technologies that have been proven and tested overseas, still need to go through a rigorous assessment which takes time and is costly. There needs to be a balance between strong regulatory frameworks that protect the Tasmanian community and developing innovative solutions and adapt to changing market conditions.   The Government can also play a role to support business innovation and the implementation of low emissions technologies through specifying low emissions material use in procurements and consideration of embodied emissions of new projects.

Benefits

• Enabling and supporting business innovation to decarbonise production processes.
• Greater levels of confidence for businesses investing in innovative technologies.
• Reducing costs for businesses while managing social, economic, and environmental risks.
• Increased market competitiveness for environmentally friendly products.

Barriers

• Justifying upfront costs to implement new innovative technologies that secure long-term benefits of emissions reduction for businesses and industry.
• The speed of change and innovation can be difficult for regulators to assess potential unintentional risks. Regulators need to understand and respond to changes quickly.

Current action

Tasmanian Government

The Renewable Energy Approval Pathway (REAP) is a set of actions that will support projects such as wind farms, transmission lines and other renewable energy investment entering the Major Projects Assessment Process under the Land Use Planning and Approvals Act 1993.

The REAP is an important step to improve regulatory outcomes that support renewable investment and align with community expectations. Components of the REAP include:

• Establish a Major Renewable Energy Project case management function in state government, composed of a dedicated case management officer for each project in ReCFIT and a cross-agency team to integrate and coordinate the assessment process.
• Develop sector-specific renewable energy information requirement guidelines for the Major Projects Assessment Process.
• More resourcing for regulatory agencies, including the Tasmanian Planning Commission, EPA, and Aboriginal Heritage Tasmania.
• Coordinated pre-assessment process, including consideration of the Reserve Activity Assessment and related assessment processes, in parallel to the Major Project Assessment Process.

Australian Government

The Australian Government’s Safeguard Mechanism commenced in 2016 to reduce emissions from Australia’s largest industrial facilities. The mechanism sets legislated limits on the greenhouse gas emissions of facilities that emit scope 1 emissions of more than 100,000 t CO₂-e per year, and applies to mining, oil and gas production, manufacturing, transport, and waste facilities.

Each facility covered by the Safeguard Mechanism has an annual emissions limit, known as a baseline, which falls each year (generally by 4.9 per cent, but this is based on a facility’s production multiplied by an emissions-intensity benchmark value). Reforms to the Safeguard Mechanism were introduced in 2023 to ensure facilities contribute to meeting Australia's emissions reduction targets while strengthening their competitiveness as the nation moves to a net zero economy. The reforms include introducing credits that may be purchased by facilities with hard-to-abate emissions and providing an incentive for other facilities covered by the scheme to reduce emissions beyond their baselines.

The Clean Energy Regulator administers the National Greenhouse and Energy Reporting Scheme and the Safeguard Mechanism. The Australian Government has a legislative requirement to publish certain information on facilities that are covered by the Safeguard Mechanism. Six Tasmanian businesses are currently covered by the Safeguard Mechanism, due to a combination of their stationary energy use and IPPU emissions. The reforms to the Safeguard Mechanism provide clarity for industry regarding the regulatory policy settings and funding programs to support the adoption of low emissions technologies and production processes.

Pathway forward

The Tasmanian Government can clarify and guide Tasmania’s major industrials through the approvals processes and support them to choose the most appropriate pathway, as well as supporting the EPA and other regulators to collaborate and support industry to trial low emissions technologies. The Tasmanian Government can also support low emissions economic activity through the uptake of low embodied carbon materials in government building projects and other low emissions products.

3. Supporting the transition to a low emissions economy

The consultation process identified that there are significant risks and opportunities for Tasmanian businesses and industry associated with the transition to a low emissions economy. These transition risks may include:

• the increased cost of compliance with the changing regulatory landscape (for example, the Safeguard Mechanism)
• the slow rate of new technologies to be commercialised
• cost of disposal of obsolete emissions-intensive technologies
• safety concerns and timeframes for implementation which may affect production
• the skills necessary to support new technologies and reporting requirements.

The transition of the sector to low emissions will have an impact on the workforce and skills required to maintain new equipment, report on emissions and sustainability practices, undertake strategic business planning, and implement new technologies.

Benefits

• Increased certainty for the IPPU industry to continue to invest and grow in Tasmania.
• Investing in new technologies has the potential to create new jobs and skills in Tasmania, especially in our regions.
• Industries that implement measures to decarbonise may be able to register for the Emissions Reduction Fund, presenting an opportunity to generate additional income through the sale of ACCUs or Safeguard Mechanism Credit units.
• Tasmania to become a leader in low emissions technologies and sustainability.

Barriers

• Upskilling opportunities and education options for training and development are limited in Tasmania.
• High up-front and ongoing costs of implementing new technologies, including costs of design, installation, training, testing, and maintenance.
• Solutions to reduce emissions in the IPPU sector are generally highly technical and facility- or process-specific, that rely on specific knowledge and expertise and require long lead times to trial and prove technologies.

Current Action

Australian Government

Funding opportunities for industry to transition to low emissions technology and renewable energy sources are already available from the Australian Government. On behalf of the Australian Government, ARENA launched a $400 million grant program for the Industrial Transformation Stream (ITS) to support emissions reduction at existing industrial facilities in regional Australia.[1] The ITS is part of the Powering the Regions Fund. Round 1 of the program allocates $150 million for applications focusing on regional decarbonisation of process heat used in industrial processes and off-road transportation.

The grant program aims to improve technology readiness and commercial readiness of renewable energy technologies, energy efficient technologies that will result in a significant reduction in scope 1 and scope 2 emissions, or improve the efficiency of an industrial process.

The Australian Government commissioned Jobs and Skills Australia to undertake a capacity study on the workforce needs for Australia’s transition to a clean energy economy. The capacity study The Clean Energy Generation: workforce needs for a net zero economy, sets a baseline of Australia’s capacity to meet net zero by 2050, and identifies 38 critical occupations and makes 50 recommendations to support achieving a net zero economy.[2]

Tasmanian Government

Funding of $1 million has been allocated to the Advanced Manufacturing Accelerating Growth Grants program to assist Tasmanian manufacturers to become more competitive, resilient and scale up to global markets. This program is designed to support businesses to take advantage of new growth opportunities.

Pathway forward

Building capacity in Tasmania to transition to a low emissions economy will require collaboration across government and industry to ensure there is reduced overlap in effort, and support is provided to reduce impacts on businesses. Investment in the capacity and capability of the current workforce and attraction and training of new workers are avenues to support businesses in this transition.

Transition risks for the sector include an increasing need for industrial businesses to demonstrate environmentally sustainable practices to comply with changing regulations, including the climate-related financial disclosure requirements which are proposed to commence in Australia for large businesses from 1 January 2025.[3] Supporting the sector to use energy efficient technologies and low emissions production processes will be an integral part of de-risking the transition to a low emissions economy. Energy efficiency and energy use is out of scope for the industrial processes and product use sector but will be covered in the energy sector Plan.

[1] Powering the Regions Industrial Transformation Stream, ARENA, Australian Government (2023) arena.gov.au/funding/powering-the-regions-industrial-transformation-stream/

[2] Clean Energy Capacity Study, Jobs and Skills Australia, Australian Government (2023) www.wa.gov.au/service/community-services/grants-and-subsidies/carbon-innovation-grants-program

[3] For more information see Australian Treasury’s Climate-related financial disclosure: exposure draft legislation released in January 2024, available at treasury.gov.au/consultation/c2024-466491

[1] Materials and Embodied Carbon Leaders’ Alliance – ‘MECLA’ (2024) mecla.org.au/about/

5. Building the resilience of the IPPU sector to the physical impacts of climate change

Projected changes to the Tasmanian climate will increase physical risks for Tasmania including industrial processing and manufacturing facilities. These risks could include an increase in bushfires, floods, coastal erosion, and potential extreme weather events that can cause damage to infrastructure and property, as well as damage to the transport infrastructure necessary for exporting goods.

Enhancing resilience will require information and data on the future climate risks posed to the IPPU sector. The Tasmanian Government has several initiatives underway to improve our understanding of the impacts of climate change on Tasmania. Once this information is available, sharing it with industry in an accessible way will assist the sector to plan for risks and build resilience against the changing climate.

Current Action

Tasmanian Government

The targeted consultation undertaken to date has highlighted that there are gaps in our understanding of the risks to the sector and the capacity and capability to appropriately plan for these risks. The Tasmanian Government has a number of initiatives underway to improve our understanding of the impacts of climate change on Tasmania.

Initiatives include updating the fine-scale climate projections for Tasmania to provide new information for a range of stakeholders, and development of Tasmania’s first statewide climate change risk assessment. Once this risk assessment is complete, the data will assist in planning for future resilience of the sector and support ongoing investment.

Business Tasmania has also developed an Emergency Preparation Toolkit to improve business resilience to extreme weather events. This toolkit is aimed at small to medium-sized businesses, and includes considerations such as reviewing insurance policies, ensuring data is backed up, and considering planning for alternative trading methods and business dependencies.

Pathway forward

The transition to a resilient IPPU sector will require a collaborative working relationship between government and industry.

Business and industry will need to take action to reduce the impacts of climate change, including strengthening supply chains, understanding and addressing workforce vulnerabilities, and adapting businesses to climate events, changes in markets and innovation. Governments also have a role to play by providing financial incentives, partnering on key projects and advocating for Tasmanian businesses at a national level.

Implementation

Following the development and publication of the final Plan for the IPPU sector, we will continue to engage with key partners and the community on the development and implementation of future opportunities as required.

We will keep stakeholders and the community informed through the ReCFIT website, Climate Change Office newsletter and social media.

We encourage you to sign up for our newsletter through our website: recfit.tas.gov.au/cc_newsletter and follow the Tasmanian Climate Change Office on Facebook to stay informed about opportunities to participate in relevant programs.

Reporting

We will prepare an annual climate change activity statement, showing the status of each sectoral Plan and progress on future opportunities identified, and the status of initiatives in the Action Plan. We will monitor and report on Tasmania’s progress to meet our target to remain at net zero, or lower, by 2030.

We will also prepare an annual greenhouse gas emissions report detailing Tasmania’s emissions for each sector.

These reports will be prepared each year and will be tabled in Parliament, as required under the Act.

Review

The Tasmanian Government is committed to a co-ordinated, whole-of-government response to climate change. Together with the climate change action plan and the delivery of Tasmania’s first statewide climate change risk assessment, the development of the sector-based Plans is a strategic priority for the government that will be delivered in consultation with business, industry, and portfolio Ministers.

However, we recognise that there is significant overlap between IPPU and other sectors, and that there are parts of Tasmania’s communities, businesses and industries that may not be comprehensively covered by the sector-based Plans.

We will prepare and publish a report outlining the links between all six sectoral plans and the climate change risk assessment. The report will also identify future focus areas to inform policies and programs, including Tasmania’s next climate change action plan.

The Plans are to be updated at least every five years.