Chamber of Commerce and Industry, Australian Energy Producers pan Productivity Commission renewable energy recommendations

The Australian

14 hours ago

Industry groups have criticised the Productivity Commission's proposals to speed up Australia's renewable energy transition and move away from gas, accusing the agency of forgetting its core mission and contradicting the Albanese government's own policies.
The commission on Sunday said the use of gas in the electricity grid would 'need to be minimised over time' to achieve net zero by 2050, a stance at odds with Labor's repeated assurances that gas has a long-term role to play in Australia's energy mix.
It also called for more policies favouring renewables over fossil fuels, warning that without them the electricity sector may not decarbonise fast or deeply enough to contribute to emissions targets.
Chamber of Commerce and Industry of Western Australia acting chief executive Aaron Morey said the commission's position on gas coupled with its recent proposal for a 5 per cent cash flow tax on the nation's biggest companies would do little to boost investment in Australia's productivity.
Mr Morey – who himself worked for the commission earlier in his career – said the recent policy suggestions were inconsistent with the agency's fundamental goal of improving productivity.
'What we've got coming out of the Productivity Commission at the moment are a series of policy proposals that will discourage people from investing in this economy,' he told The Australian.
'Just about every pillar, every area of public policy at the moment, is working against the interests and ability for companies to invest in this country.
'I look at the increase in cost and decreasing reliability of energy, I look at the gummed-up approvals system and industrial relations system that is increasingly stacked towards unions, and then we have this series of policy proposals that acts to further reduce the competitiveness and the attractiveness of investing in this country.'
He said his organisation was very disappointed in the commission's recent suggestions, arguing that gas would have an 'absolutely critical' role to play in underpinning further investment in the Australian economy.
Australian gas, he said, would also be vitally important to both the energy security and decarbonisation efforts of some of Australia' closest allies – particularly in Asia.
'I can tell you right now, coal is being burned at a furious rate in Southeast Asia,' he said.
'So gas is going to play not just an important role in energy security and energy affordability, but particularly Southeast Asian countries to decarbonise their economies.'
Australian Energy Producers chief executive Samantha McCulloch noted that the Productivity Commission's comments contrasted with the Albanese government's Future Gas Strategy, which confirmed that gas would remain essential to Australia's energy mix to 2050 and beyond and was critical to achieving net zero.
She also noted that the Australian Energy Market Operator had forecast that demand for gas-powered generation would rise by 170 per cent over the next two decades while playing an increasingly important role in firming renewables and ensuring reliability.
'This is in addition to the critical and ongoing role of gas in industrial processes such as steel, cement, brick, and glass manufacturing,' she said.
'Meeting this future demand requires continued investment in gas supply and infrastructure to ensure reliable and affordable energy for Australian households and businesses.'
The commission report, she said, also failed to recognise the potential for carbon capture, utilisation and storage to 'significantly' reduce industrial emissions and support net zero goals.
Beach Energy managing director Brett Woods noted that the commission report did, however, call for incentives for developing gas firming capability.
'Natural gas is best suited to provide firming power for decades to come, while there are also no viable alternatives to natural gas for Australia's manufacturing industry, which is critical to our economy and productivity growth,' he said.
'Developing extensive firming capability will be critical to establishing affordable and sustainable energy for homes, businesses and industry throughout the east coast.'
The commission's proposals to accelerate approvals for renewable energy projects and scale back the Fuel Tax Credit Scheme found support from the Australian Council of Trade Unions.
The ACTU said it would advocate for a new national approvals system for renewable energy and transmission projects at the Economic Reform Roundtable in Canberra later this month.
'The process would reduce the long periods of uncertainty regional communities face while waiting for new jobs in renewable energy, particularly those on the front line of the energy transition,' the ACTU said in a statement.
'This reform is essential for meeting Australia's climate goals under the Paris agreement, and for powering burgeoning clean industries like green metals, critical minerals, and renewable manufacturing that have the potential to create hundreds of thousands of new jobs.'
Capping the Fuel Tax Credit Scheme to no more than $20 million per company, the ACTU said, would also generate at least $14 billion in revenue over the next three years.
The Electric Vehicle Council's Jule Delvecchio, meanwhile, said the commission's proposal to scrap the Electric Car Discount would 'pull the handbrake' on electric vehicle adoption across Australia.
'The Electric Car Discount has been a game-changer, especially for fleets and everyday workers who couldn't previously afford to go electric. Removing it now would be like ripping out the charging cable halfway through the trip,' she said.
'If we want to see more EVs on our roads and reduce emissions we need to do much more. We need to increase EV uptake and that means expanding purchase incentives like the Electric Car Discount and state-based discounts, not removing them.' Paul Garvey Senior Reporter
Paul Garvey is an award-winning journalist with more than two decades' experience in newsrooms around Australia and the world. He is currently the senior reporter in The Australian's WA bureau, covering politics, courts, billionaires and everything in between. He has previously written for The Wall Street Journal in New York, The Australian Financial Review in Melbourne, and for The Australian from Hong Kong before returning to his native Perth. He was the WA Journalist of the Year in 2024 and is a two-time winner of The Beck Prize for political journalism. Politics
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