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Australia Joins Global Green Energy Subsidy Race, Backs Solar, Hydrogen Industries

published: 2024-04-15 15:14

Australian Prime Minister Anthony Albanese announced the "Future Manufacturing Act" during a speech in Queensland on Thursday, April 11. The act includes subsidies and incentives similar to those in Europe and the United States to support domestic manufacturing and key industries related to national security.

Among these measures are incentives for hydrogen, solar energy, and manufacturing, valued at least at $18 billion Australian dollars ($12 billion USD), to be incorporated into the new policy framework, with more details to be announced in next month's budget release.

Albanese emphasized the government's role as an investor and market participant, noting Australia's competitive advantages such as abundant natural resources, proximity to Asia, highly educated workforce, and democratic society.

He stressed that this shift towards government intervention is not a return to protectionism or isolationism but a new form of competition.

Earlier in April, Albanese unveiled the SolarSunshot plan, allocating $1 billion Australian dollars (approximately $651 million USD) to support domestic solar photovoltaic manufacturing. Administered by the Australian Renewable Energy Agency (ARENA), the plan aims to bolster the PV supply chain and innovate manufacturing projects, including those related to glass and framing materials.

Australia has been undertaking various initiatives to support its solar manufacturing sector:

· In March 2024, Queensland announced a $7.8 billion Australian dollar plan for polysilicon manufacturing.

· In February 2024, ARENA commissioned a study by the Australian PV Institute (APVI) titled "Silicon to Solar: Foundations for Solar PV Manufacturing in Australia," exploring the potential to establish 10GW polysilicon and 5GW silicon wafer, cell, and module production capacity by 2030.

· In February 2024, the New South Wales government announced an initial funding of $275 million Australian dollars for the Net Zero Manufacturing Plan.

l In March 2023, the Australian federal government announced the establishment of a $15 billion Australian dollar National Reconstruction Fund, which will provide funding for seven priority areas including solar component manufacturing.

Amidst global energy transition demands, developed nations are ramping up green energy subsidies to incentivize local PV manufacturing. Notably, Europe and the United States lead in subsidy intensity, with Japan and South Korea following suit. Another motivation for developed nations to incentivize green energy manufacturing is to compete with Chinese enterprises, which currently supply over half of the world's wind turbines and over 80% of photovoltaics.


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