The Australian Government has allocated $532 million to encourage domestic battery production, though details on how the strategy will be implemented remain unclear.
This initiative, part of the National Battery Strategy, seeks to position Australia as a competitive global battery manufacturer for domestic consumption and export markets.
Under the 'Battery Breakthrough' scheme, the funds — announced in the recent budget — will be distributed over seven years and managed by the Australian Renewable Energy Agency (ARENA). However, specifics on the scheme's execution are still being developed.
"The government will work closely with industry and other stakeholders to design, develop and deliver the Battery Breakthrough," the strategy states.
"Once-in-a-lifetime opportunity"
Industry and Science Minister Ed Husic highlighted the need for Australia to transition from merely exporting raw materials to becoming a “renewable energy superpower”. He pointed out the disparity between Australia supplying half the global lithium but producing less than 1% of the world's processed battery components.
The strategy emphasises areas where Australia can leverage its strengths, such as processing raw minerals for the electric vehicle supply chain, large-scale energy storage, industrial batteries, and establishing technical and safety standards.
Husic highlighted the economic and employment benefits saying, "The global clean energy transition is happening — and we've got a once-in-a-lifetime opportunity for Australia to create more well-paid, secure jobs."
The National Battery Strategy aims to increase local battery production to meet the growing demand, particularly as only 250,000 out of 3.7 million homes with rooftop solar currently have batteries.
Given that more than 75% of the global battery supply chain is dominated by China, the strategy notes the importance of developing sovereign capabilities to secure economic resilience and mitigate potential market shocks.
The United States has taken similar steps through its Inflation Reduction Act, introducing manufacturing tax credits and raising tariffs on lithium-ion batteries and critical minerals to reduce dependency on China and Russia.
"Critical ingredient in clean energy mix"
Prime Minister Anthony Albanese underscored the importance of battery production in achieving Australia's clean energy goals and emission reduction targets.
"We want to make more things here and with global demand for batteries set to quadruple by 2030, Australia must be a player in this field," said Albanese.
"Batteries are a critical ingredient in Australia's clean energy mix. Together with renewable energy, green hydrogen, and critical minerals, we will meet Australia's emission reduction targets and create a strong clean energy manufacturing industry."