Climate economy pact ushers in new era for Aussie firms
Australian companies will get their hands on massive tax breaks for joining the clean economy, without having to move to the United States.
The new agreement signed with the US will put advanced manufacturers, hydrogen producers and critical mineral processing on par with American firms for more than $500 billion worth of subsidies and production credits.
Western Australia Mines and Petroleum Minister Bill Johnston told AAP the agreement, signed at the weekend, would provide further impetus to the state's push to become a world leader in the supply of battery metals and critical minerals.
Prime Minister Anthony Albanese and US President Joe Biden committed the two economies to deeper ties on energy, defence and space technology under the Climate, Critical Minerals and Clean Energy Transformation Compact.
Australia is already a significant producer of the critical minerals and rare earths needed for electric cars, clean energy equipment, mobile phones and sophisticated defence technologies.
"I expect further investments in WA to be made on the back of the compact," Mr Johnson said.
He said the recent boom in exploration would continue "well into the future" on the compact's expansion of responsible clean energy and diversification of critical minerals supply chains.
The pact seeks to coordinate policies and investments with Australia because the US needs to break China's stranglehold on the supply chain.
Mr Albanese told parliament on Monday the historic and ambitious agreement was a new pillar of Australia's alliance with the US.
"It will expand and diversify our clean energy supply, it will promote a sustainable supply and processing critical minerals, and support the development of clean hydrogen, battery technologies and other clean energy products," he said.
Mr Albanese said Mr Biden would work with Congress to enable Australia to be included as a domestic supplier under the US Defence Production Act.
"That is critical because treating Australia as a domestic supplier will allow our industries to benefit from the Inflation Reduction Act," Mr Albanese said.
"Now that is worth $547b, that means big opportunities for Australia to build our renewable energy industry and create jobs, including in the hydrogen sector," he said.
The only other country with this designation is Canada.
The next step for Australia will be an updated critical minerals list, which is due for release soon.
The US has added nickel to their critical minerals list and the federal government is widely expected to follow suit.
More than a year ago, the US Geological Survey released the list of 50 mineral commodities considered critical to the economy and national security - adding nickel and zinc.
"Australia's critical minerals list is considered periodically to ensure it reflects evolving technological, economic and global conditions," a spokesperson for federal Resources Minister Madeleine King said.
Australia's critical technologies list has already had a refresh.
Released on Friday, the updated version included clean energy generation and storage technologies as a new priority.