In 2023, the Australian Government sought advice on the National Battery Strategy to develop industry policy for manufacturing batteries in Australia.

Electricity storage will be crucial to the decarbonisation of Australia’s electricity system. 

It underpins emissions reductions in electricity production and in the wider economy by enabling electrification of other sectors, using renewable electricity.

Batteries also reduce system costs. Recent research suggests short-term storage batteries can sustain the storage needs of an electricity system of 80% renewables without deep storage.

Government support to develop battery manufacturing onshore brings additional benefits beyond increased capture of economic value from Australian resources.

Creating battery manufacturing at scale will also give Australia better access to the technologies it needs to make the best use of opportunities in the transition to a net zero global economy.  

Climateworks recommends that the National Battery Strategy:

  • Includes an explicit objective to meet Australia’s emissions reduction targets in line with the Paris Agreement. 
  • Is designed as part of a broader industrial strategy to catalyse industrial transition and to create the energy system that supports the industrial transition. 
  • Includes investment designed as part of a broader innovation strategy to identify gaps and the type of innovation support that is most appropriate, and coherent with proposed co-investment plans for the National Reconstruction Fund and that investment is part of a co-investment partnership between federal, state, and territory governments to create scale and enable better leveraging of private sector funding. 
  • Promotes alignment and cooperation with state and territory policy to enable greater gains and opportunities to leverage funding available in those jurisdictions. And that this is alongside setting a national strategy for tapping new battery industry and related mineral processing export markets in line with the net zero global economy. 
  • Assesses projects with criteria including an assessment of their compatibility with the development of future export markets for battery minerals or battery components. 
  • Ensures funding is subject to expectations that recipients meet high-quality climate-related financial risk disclosure and have robust net zero emissions transition plans or explanation for the absence of such plans. 
  • Supports the development of renewable energy industrial precincts (REIPs) through a national place-based industrial decarbonisation program to coordinate their nationwide design and implementation. 
  • Ties in with action through the priority areas of the National Reconstruction Fund (renewables and low emissions technologies, transport and value-add in resources). 
  • Supports early market development through procurement, underwriting or contracts for difference. 
  • Includes developing a regional and national workforce plan to invest in and develop the skills needed for the battery industry or associated mineral processing.