Live Speech - Industrial Net Zero Conference 2026
The Hon. Matt Kean
Chair - Climate Change Authority
Check against delivery.
May I acknowledge the Traditional Owners of the land where I am today, the Gadigal people of the Eora nation, and pay my respects to elders, past and present.
Thank you to the event organisers for the invitation. It's great to be back, having previously spoken at this forum in 2022 during my days as the NSW Minister for Energy.
In considering what I wanted to discuss today, I looked back on my remarks on that occasion.
A few themes stand out.
The first was that in 2022, global energy markets were thrown into turmoil by the commencement of the war in Ukraine.
Price shocks were pulsing through the global economy as international supply chains were upended.
Rather than leave ourselves exposed to the aftershocks of geopolitical tensions, I said that Australia would be better served harnessing the abundance of renewable energy resources available to us at home.
I say the same today. The value we need to place on energy security and with it, economic security, is even more obvious as we absorb the compounding effects of the war in Iran.
The second point I made was that the trajectory of global capital was heading in one direction.
At the time, the US had passed the Inflation Reduction Act, which had the potential to be the biggest climate investment in US history.
Obviously this has shifted. We can't pretend the current administration's decision to repeal that legislation and withdraw from the Paris Agreement has no effect.
The US is the world's largest economy and second largest source of emissions, so of course it does.
While the pre-existing project pipeline meant the US added a record 26 gigawatts of new solar storage and wind in the first half of 2026, a further 15 gigawatts of renewable projects were cancelled. This represents over $25 billion in lost investment.
But the world has not followed the US on this path.
In May this year, the International Energy Agency reported that it expects around $2.2 trillion of investment to go into low-carbon solutions in 2026. That's almost double what will flow into fossil fuel investment.
Over the past 10 years, investment in low-carbon solutions has almost doubled while investment in fossil fuels has flatlined.
There's a rising wall of capital waiting to be deployed to the decarbonisation of our energy grid and helping Australia's industrial sector seize the opportunities of the transition to net zero.
So we need to roll out the red carpet for every dollar the US rejects.
Which brings me to the third point I made 4 years ago.
Our ability to attract the capital needed to decarbonise our economy and support the creation of new, low-carbon industries depends on giving investors the certainty they need.
Legislated emissions reduction targets, backed by durable policy settings, are non-negotiable.
That was true in New South Wales back then, and it's just as true on a national scale today.
So, if those three principles remain the same
- that Australia will be a stronger, more resilient nation when it harnesses the sun, wind and critical minerals we have at our fingertips
- that we should be chaperoning international capital into Australia to gain a competitive edge and achieve our net zero goals
- and that policy targets, stability, and credibility are essential to the successful delivery of clean, reliable and affordable energy for industry
. . . then what's changed since I addressed you in 2022, other than my title and mandate?
Unfortunately, what's changed is that the risks attached to climate change have increased.
The environmental risk is evident in the continued increases in global temperatures.
2025 was one of the warmest years on record.
The past three year stretch has been the warmest equivalent period on record.
The last decade was too.
Just last month, the United Nations Environment Programme reported that the world will likely exceed the 1.5°C guardrail in the next few years.
That's going to elevate the danger posed to lives and livelihoods.
Australia is now bracing for a super El Nino that increases the prospect of warming oceans, intense bushfires, supercharged heatwaves, drought and other climate-related disasters.
However, these trends are not a reason for despair, nor an excuse to throw our hands in the air.
Instead, they should compel us to double down on climate action and align the efforts of governments, industry and investors.
We have the tools available to build a safer, more prosperous future.
The question now is how quickly we choose to use them.
In considering that, let's start with the state of play, and some good news.
Australia has made meaningful progress on reducing its emissions, building a clean energy grid and decarbonising our economy.
When the Climate Change Authority released its most recent Annual Progress Report late last year, we said that our emissions were falling and Australia was on track to stay within its 2030 emissions budget.
We found that over the previous five years, emissions had declined at an average rate of 8 megatonnes of CO2 equivalent per year, and they'd fallen by 10 megatonnes of CO2 equivalent in 2025.
We continue to track the data and you'll see our latest assessments on both progress and what's required in the next Annual Progress Report due before the end of the year.
What won't change is the fact that there's much more to do.
We need a step change in the pace of emissions reduction.
Last year, we found Australia would need to double the average rate of emissions reduction to reach our 2030 target, and triple the rate to reach the top of our 2035 target range.
That means we also need a step change in the rate of investment - both in renewable energy and in broader industrial decarbonisation.
But let's discard the notion it's all too hard.
After all, what was 'hard to abate' as recently as a few years ago, is where we're doing the heavy lifting today.
Back in 2010, the Renewable Energy Target was reset with the aim to reach 20% of electricity generation by 2020.
At the time, many said that would be impossible, or it would compromise the reliability of the grid.
But renewables are now delivering more than 40% of total on-grid generation, and we're regularly seeing renewables supply far more electricity to Australia's main grid during the day than fossil fuels.
The electricity sector accounted for around half the nation's total emissions reductions in 2025.
That's because capital followed changes in the cost curve and technological innovation.
Solar and wind were the first to benefit.
We're now seeing the same principle apply to battery and storage solutions.
Grid-scale storage in the National Electricity Market doubled in the 12 months from March 2025.
Those big batteries added 11.3 gigawatt hours of capacity to the system, enough to store and shift almost 5 hours worth of Australia's large-scale solar generation at a time.
It's not just making for a more reliable grid.
It's driving down wholesale energy costs too.
In its latest quarterly analysis, AEMO reported that in the April to June quarter this year, wholesale spot prices in the NEM fell 47% compared to the same period in 2025.
It reinforces that as technologies mature and become more cost-competitive, they flood into the system and give industry access to more reliable, affordable energy.
That's a view the Climate Change Authority articulated in its Sector Pathways Review in 2024, where we looked at the decarbonisation trajectory of every sector of the economy.
We understood some would take longer than others, particularly in hard-to-abate sectors.
We knew that it wasn't possible to predict the precise timing of every technological breakthrough, and some wouldn't work as easily as we had hoped.
Hydrogen, for example, is taking longer and proving more difficult to commercialise in Australia than first anticipated.
The economics of major wind projects are also facing some challenges right now.
But other solutions are accelerating in scale and impact.
That's why we need to focus on outcomes, rather than be overly deterministic as to the how.
Electrification is far exceeding expectations from just a year or 2 ago.
At the household level, Australia's status as a global leader in harnessing the power of the sun using rooftop solar to lower power bills is now being matched with a passion for battery storage.
More than half a million Australian households have now taken advantage of the Cheaper Home Batteries Program to store cheap solar power captured during the day and use it when they need it most.
But the opportunity is not limited to households. The Climate Change Authority was recently pleased to see the Commonwealth embrace our recommendation to put more commercial and industrial rooftops to work.
In August, the Government announced it would use the Small-Scale Renewable Energy Scheme to increase the amount of solar power generated on commercial, industrial and agricultural rooftops.
This will reduce demand on the system, energy costs for hosts and businesses, and make a major contribution to industrial electrification.
The war in Iran is also fundamentally changing the transport sector.
Battery electric vehicles sales represented a quarter of the new vehicle market in August - a mammoth 171% increase compared to August 2025.
While petrol and diesel prices have surged, it's just not just market forces at work.
Smart regulatory frameworks have shaped the trajectory of new technologies just as much.
The national New Vehicle Efficiency Standard came into effect in 2025, and paved the way a step change in the EV model selection available to Australians.
Governments at all levels are smoothing the EV adoption path further by building more public charging locations, and some are even providing apartment blocks incentives to wire-up for future charging needs.
And this shift is not limited to our cars. In industries like mining, electric dump trucks and even electric locomotives are being introduced.
Of course, not everything can be electrified. We need to expand the set of available solutions, to unlock faster and deeper decarbonisation across the economy.
The Commonwealth has recently been consulting on options to increase demand for low-carbon liquid fuels to support homegrown production.
These fuels can strengthen domestic fuel security, create new industries and jobs and reduce emissions in sectors that are difficult to electrify.
There's a lot to work through, but the prospect of Australia being a pioneer in the production of Sustainable Aviation Fuels is emblematic of the bigger platform available to us.
And that's the global demand for low-carbon products.
Governments, businesses and consumers around the world are already acting to reduce their carbon risk and decarbonise their economies.
That's particularly true in Asia, home to some of the fastest growing populations and economies in the world.
We can tap into our reputation as a reliable trading partner, the abundance of natural resources at our disposal, our immense industrial capability and access to capital in a way that turbocharges emissions reductions and prosperity at home by servicing demand abroad.
The Climate Change Authority has looked at it through a concept that we call Decarbonisation Deals.
It's about reducing the barriers that prevent industrial decarbonisation, particularly delays to investment caused by suppliers need to know that markets exist for their products before they commit.
We need to help mobilise the investment, infrastructure, supply chains and partnerships needed to deploy new technologies at speed and scale.
Alignment of efforts needs to improve across governments, financiers, industry and trading partners with like-minded emissions reduction commitments.
Take, for example, the prospect of Australia building on what is already a vibrant bilateral trading relationship with Korea.
Australia can use clean energy to produce green iron, which in turn supports green steelmaking and automotive manufacturing in Korea, and those products find their way back here to be powered by the same renewable resources that helped create them.
That's a win for the economy, a win for industry, a win for our climate and a win for the future of low-emissions supply chains.
Now, to take advantage of the opportunity available abroad, we also have to have our house in order at home.
Policy and regulatory frameworks have to be fit-for-purpose, and the Climate Change Authority is playing an active role in ensuring they are.
As some of you may be aware, we are contributing to the Government's Safeguard Mechanism review.
The Safeguard creates a binding incentive for major emitters to reduce their carbon emissions by investing in lower-emissions technologies onsite, or by supporting emissions reductions elsewhere in the economy by purchasing units.
This flexibility is a central design principle of the Safeguard.
It allows industry to contribute to the national emissions reduction task, even as technology options for onsite abatement continue to develop.
The obligations are clear, but the compliance pathways are flexible.
The Safeguard provides the stable and predictable foundation needed to encourage investment, whilst giving each facility the licence to plan and execute their own decarbonisation pathway.
In terms of the outcomes of the review, our work is ongoing and decisions are ultimately a matter for Government, so I won't pre-empt any future decisions today.
But we do want to ensure the Safeguard Mechanism reforms introduced in 2023 are working as intended.
We also want to consider whether further reforms may be needed to encourage more emissions reductions onsite, while continuing to support a strong economy.
And whilst the Safeguard Mechanism is Australia's principal policy for reducing emissions from large industrial facilities, it can't do all the work nor was it ever designed to.
Other measures exist to address technology, infrastructure and regulatory barriers faced by industries on their path to decarbonisation.
For example, decarbonising metals processing is an importance challenge, as well as a major export opportunity. They straddle the dual objectives of reducing emissions and unlocking prosperity.
And whilst the Safeguard Mechanism provides incentives for cleaner processes, it won't always be sufficient.
That's where government funding and support, such as through the Powering the Regions Fund, the Future Made in Australia, Clean Energy Finance Corporation, National Reconstruction Fund and ARENA, serves as a valued tool.
ARENA is making available $750 million in grant funding towards green metals through the Future Made in Australia Innovation Fund.
This funding will help Safeguard facilities in the metals industry overcome cost and first-mover barriers, accelerating the commercial-scale production of green metals.
The Future Made in Australia Innovation fund is also supporting priority sectors like renewable energy technology manufacturing and low carbon fuels.
Another policy delivering a Future Made in Australia is the new $5 billion Net Zero fund. This will help businesses increase their energy efficiency and build renewable technology. It will also strengthen Australia's long-term industrial capability and help new technologies reach commercial scale.
And it underscores a point I've consistently made in championing the switch to a net zero economy.
That is, we can reduce our emissions, as we must.
But in doing so, we can unleash a new era of prosperity and industrial capability that will sustain our economy for decades to come.
Australia is exceptionally well equipped to serve our national interest by moving first and moving fast to tap into the global trend towards decarbonisation.
Treasury modelling of the net zero transition found that if Australia is successful in realising its clean energy exports potential, the economy could be $85 billion larger by 2050.
That's an opportunity too good to leave on the table.
Let's seize the moment, and I look forward to working with you all on the journey.
