Summary of actions
New actions
- Building Future Battery Capabilities
- Support to deliver the Australian Made Battery Precinct
- Critical Minerals Trade Enhancement Initiative
- Future Made in Australia
- Innovation Fund
- trade and investment policy reforms
Existing actions
- Australia-United States Battery Supply Chain and Research Working Group
- Australia-United States Taskforce on Critical Minerals
- Climate Club
- The Australian Trade and Investment Commission (Austrade)
Linked initiatives
- International Agreements
- Export Finance Australia
- Major Projects Facilitation Agency (MPFA)
- Critical Minerals Office / Department of Foreign Affairs and Trade
- Foreign Investment Framework
- Invested: Australia’s Southeast Asia Economic Strategy to 2040
Opportunities
The current global battery supply chain is highly concentrated. China is a global leader across the supply chain, representing up to 87% of global production in lithium hydroxide and 66% in lithium carbonate (March 2024 Resources and Energy Quarterly). This global concentration creates risks for both battery producers and consumers, who are vulnerable to supply disruptions and volatile prices.
For trading partners and Australian industry, a more diversified market would help improve economic resilience. Trade partnerships can be used to improve Australia’s access to a wider range of battery supply chains, and promote competition in international markets. The United States, Europe, Canada, France and India are adopting incentives that will likely lower geographic concentration of battery manufacturing. Trade partnerships can help Australia benefit from these investments in diversification.
The government is also working closely with international partners to improve market access for Australian companies. Australia has 18 free trade agreements (FTAs) in force, including multiple regional trade agreements in the Indo-Pacific region. These cover the top 5 automotive manufacturing countries: China, US, Japan, India and South Korea. These FTAs create competition in local markets, particularly for finished products. They provide prospective markets for Australian products that value add to our extracted minerals, like cathode and anode active materials.
Targeted collaboration with trading partners can help Australia improve the resilience of existing supply chains, support their diversification over time and ensure Australian companies become an indispensable part of global net zero supply chains.
What we are doing
Australia can build new, secure, stable and diverse supply chains across critical minerals, batteries and battery components by collaborating closely with international partners. Australia has bilateral agreements in place to advance cooperation on critical minerals with partner countries. These include the United States, United Kingdom, India, Japan, the Republic of Korea, France and Germany. We participate in several multilateral frameworks on critical minerals, such as the Minerals Security Partnership, the Indo-Pacific Economic Framework Critical Minerals Dialogue and the Quad Clean Energy Supply Chains program. Australia can also build sovereign capabilities in processing battery minerals and producing more battery components for future battery needs.
The government is supporting Australia’s battery industries to strengthen supply chain resilience. Government efforts are targeting manufacturing to support more people using clean technologies. The government is also assessing barriers to better battery manufacturing in Australia. Insights from this work will inform possible future actions to plug supply chain gaps.
This complements the work through the Critical Minerals Strategy, which promotes diverse, resilient and sustainable global critical mineral supply chains. Australia’s battery mineral resources make the nation less exposed to supply disruption risks. Large reserves of lithium, nickel, cobalt, and vanadium give Australia a supply chain advantage.
Boosting battery foreign investment opportunities
Investment drives economic growth, creates skilled jobs, improves access to overseas markets and improves productivity. Austrade’s Why Australia benchmark report outlines Australia’s strengths as an investment destination. Australia is ranked 5th in the Renewable Energy Country Attractiveness Index (EY 2023). Our reputation as an open, prosperous and innovative economy makes Australia a leading and attractive destination for global business.
The international market for batteries and battery components is competitive. Other countries have substantial programs to support both new and existing battery industries. However, investors are already taking advantage of Australia’s stability for energy storage projects. Projects worth over $2 billion reached the investment stage in the second quarter of 2023 alone, representing 3.8GWh of storage (Austrade 2023). Since the mid-2010s, WA alone has attracted more than $9 billion in investment for a range of battery and critical mineral projects (WA Gov 2023).
Australia-United States Battery Supply Chain and Research Working Group
On 25 October 2023, the Prime Minister released a Joint Leaders Statement with US President Biden. The statement outlined new areas of cooperation on science and critical and emerging technologies to help build an ‘Innovation Alliance’. Australia and the US agreed to collaborate on clean energy supply chains.
This included setting up a Battery Supply Chain and Research Working Group. The group will explore both countries’ manufacturing capability and advance battery technology research and development. It will also organise our collaboration on batteries under the Australia United States Climate, Critical Minerals and Clean Energy Transformation Compact.
Partnering with the US will strengthen Australia’s sovereign capabilities and advance national interests through sharing information and knowledge. Initial steps include mapping how our supply chains complement each other and where there are gaps. We will also set up an R&D mission between Australia and US battery industry and researchers.
Existing actions
- The Australia-United States Battery Supply Chain and Research Working Group, established under the Australia-United States compact, will drive the development of emerging battery technologies to ensure our nations can lead energy storage.
- Australia and the United States have established the ministerial-level Australia-United States Taskforce on Critical Minerals.
- Engaging with international partners on practical action to address climate change, which includes multiple bilateral partnerships and joining the Climate Club in July 2023.
- Through our development cooperation programs in Southeast Asia, Australia is supporting our partners’ clean energy transition and helping to develop clean energy supply chains. This includes cooperation on battery energy storage systems.
- In the Pacific, Australia also finances batteries and clean energy projects with its development programs, including the Australia Infrastructure Financing Facility for the Pacific.
Linked initiatives
- Bilateral agreements such as the:
- Australia-United States Climate, Critical Minerals and Clean Energy Transformation Compact
- Singapore-Australia Green Economy Agreement
- India-Australia Critical Minerals Investment Partnership
- Japan-Australia Critical Minerals Partnership
- Australia-Republic of Korea Memorandum of Understanding on Cooperation in Critical Minerals Supply Chains
- Australia-France Strategic Dialogue on Critical Minerals
- Australia-Germany Critical Minerals Joint Declaration of Intent.
- Policy dialogue and advocacy through international frameworks such as the Minerals Security Partnership, Indo-Pacific Economic Framework and the Quadrilateral Security Dialogue.
- Export Finance Australia provides finance solutions to businesses to help grow exports.
- The Major Projects Facilitation Agency and the Major Project Status initiative make it faster and easier to invest in major project development in Australia.
- The Critical Minerals Office, working with the Department of Foreign Affairs and Trade, has many international partnerships that promote investment and building diverse and secure global supply chains.
- The Australian Trade and Investment Commission (Austrade) organises commercial partnerships to increase the growth of Australian exporters and attract productive foreign direct investment. This investment brings skills and new technologies to Australia. Austrade also uses its global network to strengthen Australia’s position in the global supply chain for renewable energy storage. This includes supporting critical minerals companies looking for offtake to increase investment in Australian battery projects, downstream processing and value chain creations.
- The government has announced changes to Australia’s Foreign Investment Framework. These changes deliver a stronger, faster, and more transparent approach to foreign investment. This will ensure that Australia can attract the significant foreign capital needed to support our economic priorities while protecting the national interest in an increasingly complex economic and geostrategic environment. The changes will deliver benefits to investors by providing the transparency, clarity, timeliness and predictability they need to invest with confidence.
- Strengthening two-way trade and investment with Southeast Asia and supporting more diverse clean energy supply chains through Invested: Australia’s Southeast Asia Economic Strategy to 2040.
What we will do
The government’s actions will help to reduce the risk of Australia experiencing price spikes and help Australia to counter supply threats. They will also reduce unintended knock-on impacts from complex and integrated battery supply chains and help meet net-zero targets. Australia will focus its local support on manufacturing that builds supply chain resilience, in the national interest.
Australia is working with international partners to explore opportunities for partnership and to advocate for Australian battery industries and research abroad. Australia’s international collaborations will:
- deepen collaboration to tackle the global climate challenge.
- support regional and global electricity access and transformation.
- build new clean energy trade opportunities for Australia.
- increase and diversify clean energy supply chains.
- promote high ESG standards and recognition.
Australia is also taking a place-based approach to investment attraction. Precincts create clearer and more attractive opportunities to build a local supply chain and workforce around opportunities. Precincts can also help networks of organisations to work together. This can save costs on logistics and materials, help transfer knowledge and share infrastructure to reduce waste. Precincts can also build an ESG reputation, to differentiate and market products in a globally competitive industry.
Australia will draw on its existing advantages as a business friendly investment destination. This will grow local battery industries and ensure Australian battery manufacturers continue to access critical technology supply chains. Existing trade and investment connections with the world’s fastest growing economies means Australia is a natural gateway for global business.
New actions
- The $20.3 million Building Future Battery Capabilities measure will include the mapping of battery value chains, supporting integration of Australian industry into international supply chains and developing national capabilities.
- The government has committed $5.6 million to conduct options analysis and research to support the delivery of the Australian Made Battery Precinct, in partnership with the Queensland Government. Precincts create clear opportunities for businesses to fill in gaps in the supply chain, and clearer signals for international investors.
- The government’s Future Made in Australia agenda includes:
- A new front door for investors with major, transformational investment proposals related to the agenda to make it simpler to invest in Australia and attract more global and domestic capital. The final approach to delivering an effective front door will be developed in consultation with investors, businesses, governments, unions, communities and other experts over 2024.
- $15.7 million to deliver a stronger, more streamlined, and more transparent approach to foreign investment, and $17.3 million to implement a comprehensive agenda to mobilise private investment in sustainable activities.
- $5.8 million for a critical minerals trade enhancement initiative to help address strategic behaviour in critical minerals markets.