May 23, 2022

What Does a New Federal Government Mean for the Australian Renewables Industry?


A New Government

The Australian federal election was held on 21 May 2022. The Labor Party, led by Anthony Albanese, defeated the Liberal-National Coalition, led by Scott Morrison. The Liberal-National Coalition had been in power since 2013. 


When last in power, the Labor government faced significant political backlash when it tried to implement a carbon emissions trading scheme. A watered-down version of the scheme was eventually passed under the Clean Energy Act 2011 but was repealed by Liberal-National Coalition government in 2014, following the defeat of the Labor government in 2013. 

Without a carbon market, federal and state governments have since sought to incentivise renewables through subsidies and the establishment of several green funds and schemes. The new Labor government plans to continue this approach. There are no plans to reintroduce an emissions trading system like that which was originally proposed by Labor when it was last in power. 

Labor’s key renewables policies and investment plans are set out below:


  • New Energy Skills Program: A program to invest in the creation of 10,000 New Energy Apprentices. Labor has committed to paying A$2,000 per year (up to a cap of A$10,000) to entities taking on apprenticeships in qualifying industries. Labor has suggested these relevant industries will include rooftop solar installation and maintenance, large-scale renewable projects including emerging green hydrogen, energy efficiency upgrades to homes and businesses, renewable manufacturing, and relevant agricultural activities.
  • Powering the Regions Fund: A fund to “support measures to improve energy efficiency within existing industries and develop new industries in Regional Australia”. Little detail has been provided regarding which regions will be selected, how they will be powered, or how the funds will be provided.
  • National Reconstruction Fund: A A$15 billion fund to invest in green metals (steel, alumina and aluminium), clean energy component manufacturing, hydrogen electrolysers and fuel switching, agricultural methane reduction and waste reduction. Labor has said that investments will be made with a focus on “value adding and capability development to leverage Australia’s natural and competitive strengths” (whatever that means). 
  • National Electric Vehicle Strategy: Labor intends to lower the cost of electric vehicles. Labor intends to achieve this by:
    • reducing import tariffs “on some imported electric cars”; and
    • applying a 47 percent fringe benefits tax on electric cars that are provided through work for private use.

The exemptions will only be available to vehicles below the luxury car tax threshold for fuel efficient vehicles (A$77,565), which would rule out most electric vehicles currently on the road in Australia. However, Labor hopes the subsidies will encourage the import of cheaper electric vehicles.


  • Labour intends to support the rollout of 85 solar banks and the installation of 400 community batteries. This scheme is supposed to allow those who cannot install rooftop solar at their own residence to purchase a share of a community-owned solar or battery project. The locations of these projects have not been revealed and the timeline has not yet been established.
  • Labor plans to upgrade the electricity grid. If successful, this would be a key reform. Grid connection remains a material bottleneck for renewables projects in Australia. Renewables projects are often delayed, or even cancelled, over issues relating to grid connection. Few details have been given as to how and when the upgrade will occur. 


Other announced policies include:

  • The adoption of the Business Council of Australia’s recommendation for facilities already covered by the government’s Safeguard Mechanism that emissions be reduced gradually and predictably over time.
  • Protection of the competitiveness of Emissions Intensive Trade Exposed industries by ensuring they will not face a greater constraint than their competitors.
  • Reducing the Australian Public Service’s own emissions to net zero by 2030.
  • Establishing a vehicle fuel testing program to inform consumer choice.
  • Working with large businesses to provide greater transparency on their climate-related risks and opportunities.
  • Restoring the role of the Climate Change Authority, while keeping decision-making and accountability with the government and introducing new annual Parliamentary reporting by the Minister.

Labor has provided little detail on how these policies will be implemented. Many of the policies fail to set benchmarks against which their success may be measured.


State governments in Australia have been keen to promote themselves as hydrogen friendly states. Hydrogen has been given consideration in the National Reconstruction Fund, but Labor has no specific policy to address hydrogen projects. However, as Australia is seen as a target for green hydrogen investment, the development of renewables in Australia will likely have a direct impact on hydrogen projects.

What Does This Mean for Renewables?

The introduction of new funds and schemes will provide some opportunities for companies looking to develop renewables projects in Australia. In particular, there may be opportunities for entities looking to run, or scale-up, green hydrogen projects. However, the existing policies will not revolutionise the renewables industry in Australia. The establishment of multiple funds and schemes, while encouraging for renewables participants, means that it will often be bureaucrats, not market forces, that determine which projects will be successful.

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