Australia’s courtship by the US and India to supply critical minerals and resources heightens Australia’s position as a leader in the global clean energy transition
The agreements with both nations form strategic and commercial alliances that present an opportunity for further growth in Australian exports, local investment, manufacturing, climate technology, green hydrogen, research and job creation.
The signing of the Green Hydrogen Taskforce between Indian Prime Minister Narendra Modi and Australian Prime Minister Anthony Albanese signals a shared ambition to develop the green hydrogen industry, with the promise of bilateral collaboration in new energy sectors and opportunities for increased trade and investment through the manufacture and deployment of the gas.
The deepening relationship between the two countries presents opportunities on both sides of the critical minerals supply chain. India is a major user and importer of minerals for electric vehicle battery production. Australia is a world leader in the supply of minerals including lithium, nickel, rutile, tantalum, zircon, cobalt, copper, antimony, niobium and vanadium which are key to clean technologies. Australia could be poised to benefit from the relationship through further growth in exports and domestic investment in minerals production and refinement.
Prime Minister Anthony Albanese said, “This is a relationship we need to invest in. Our strong partnership with India will deliver benefits for Australia in trade, investment and business, and in regional security and stability.”
Only days prior, a similar deal to deliver clean energy technology to the world was struck with US President Joe Biden in Japan, on the sidelines of the G7 meeting. The Climate, Critical Minerals and Clean Energy Transformation Compact forms the third pillar of the Australia-US Alliance, after defence and economic cooperation.
The deal will see an agreement to supply critical minerals needed for new energy and storage technology, solar and wind and will support emerging hydrogen markets. Exactly how this compact will work is yet to be established but a joint Australia-US plan will be developed by the end of 2023.
The deal is expected to stimulate serious action on climate change and clean energy both domestically and globally and it helps position Australia in the forefront of the clean energy transition.
Prime Minister Albanese said, “This is incredibly important: we have been speaking about the largest action by any country to deal with the challenge of climate change and to direct investment into the clean energy transformation.”
Under a separate agreement, President Biden supports Australia being treated as a ‘domestic supplier’, meaning that if Congress approves, Australian suppliers and manufacturers will have access to lucrative US government subsidies. While not assured, Australian suppliers might benefit from the US Inflation Reduction Act, valued at $US369bn which is stimulating global momentum on the clean energy transition. Mr Albanese said ‘domestic supplier’ status would help discourage capital from leaving Australia to go to the US.