Australian battery industry could be worth $7 billion by 2030: CRC

Brandon How

The national batteries industry could generate more than $7 billion annually by 2030 if the government adopts a number of initiatives to back the growing sector, according to the industry’s Cooperative Research Centre.

In a pre-budget submission to the federal government, the Future Battery Industries Cooperative Research Centre (FBICRC) said that a potential 34,700 jobs could be created within the next 10 years.

To achieve this, the FBICRC has made three recommendations to government: create a national battery strategy, provide $1 billion annually for five years through the Modern Manufacturing Initiative (MMI), and establish a $750 million National Battery Institute.

Future Battery Industries Cooperative Research Centre chief executive officer Shannon O’Rourke said the group’s investment proposals were “eminently doable”

The MMI does not currently include the battery industry in its six national manufacturing priority areas.

The FBICRC chief executive officer Shannon O’Rourke said that developing Australia’s battery industry was immediately accessible.

“Battery industries are here and now, its not some pipe dream. With great policy from the government, a national strategy, an industry attraction fund, and a new Australian Battery Institute, we think that we can capture that value,” Mr O’Rourke said.

“Put simply, Australia has a choice. We can continue our traditional focus on the mining and export of raw battery materials and accept the lost opportunity of value add for Australia. Alternatively, we can shift our mindset, invest with purpose and adopt courageous and visionary policy settings.”

An Australian Battery Institute would provide specialised training and technology development as well as commercialisation infrastructure. This would be ‘bi-coastal’ to ensure that development is shared nationwide. The estimated $750 million is similar in cost to institutes established in the UK and Germany.

By 2030, up to $23 billion of investment would be needed to produce the $7.4 billion annually. Of this, up to $3 billion of the investment would go directly to battery cell manufacturing, which is the equivalent of “only one to two world-scale factories representing a small market share of the 200 planned and operating factories globally”, according to the submission.

This is further broken down into between $6 billion and $9 billion for value-added manufacturing, $4 billion to $6 billion in refining and active materials, $2 billion to $3 billion in cell manufacture and up to $0.5 billion in integration and services.

The FBICRC said that this could be funded through the $605 million National Critical Research Infrastructure Fund.

Alongside these policy recommendations, the FBICRC also called for measures to support battery uptake. These include the government acting as a model consumer by electrifying its vehicle fleets, and creating an open market for grid services.

The FBICRC’s recommendations are based on an Accenture report it commissioned which was released last June. The report found that if Australia continues to remain focused on mining raw battery material with limited refining or battery integration services, only $4.1 billion would be produced annually by 2030.

The FBICRC submission cited similar national battery strategies undertaken by China, the United States, the European Union (EU), and Japan. For example, the EU’s Europeans Battery Innovation scheme will deliver subsidies of over $4.6 billion for battery production between 2021-28 on top of the $5 billion funding committed by seven member countries in 2019.

Mr O’Rourke said that cultivating an export market for Australian batteries should also be a priority.

“In order to be competitive, Australian businesses need to be at a global scale and the Australia domestic market for batteries, while growing, is still nascent. We think that we need to target export and export scale very early in the piece,” he said.

“Australia already has 50 per cent of the market for critical minerals, what we’re aiming to do is capture more of the market in needed downstream segments. What we want to be able to do is export value added chemicals, battery materials, value added cells, and ideally battery modules for installation in electric vehicles.”

So far, $300 million of federal funds have been invested in battery-related research and development since 2015 but this cash has come from several bodies, making it less effective, the report said.

Western Australia and Queensland are the only states to have implemented a state-level battery industry strategy. Currently, the Australian battery industry creates $1.3 billion in value and supports around 6,000 jobs.

At the time of the report’s release last year, then-WA Mines and Petroleum Minister Bill Johnston encouraged the government to dedicate more funding to battery research and development.

“I’m pleased to see the report confirm that Australia can compete in the manufacture of battery active materials, an initiative the McGowan Government has already committed to attracting with funding support,” Mr Johnston said.

“I’m also keen to see the Australian Government’s Modern Manufacturing Initiative also commit funding to Western Australia’s industry.”

In the report, global demand for batteries is anticipated to grow by 9 to 10 times up to a value of US$122-$151 billion by 2030. By 2050, the level of battery investment could increase by 40 times according to the International Energy Agency (IEA). The IEA also predicts that 70 per cent of investment in renewable energy will go towards batteries in a net zero world.

Although the Accenture report makes a number of assumptions regarding battery industry growth scenarios, Mr O’Rourke said the assumption around Australia’s market share is small and hence “the plan that [the FBICRC has] is eminently doable”.

The FBICRC brings together 70 participants across industry, university, state and federal government, as well as CSIRO. Based at the Curtin University in Western Australia, the CRC currently supports 15 research projects with a total value of $120 million over six years.

Do you know more? Contact James Riley via Email.

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