Weld Australia welcomes Prime Minister Anthony Albanese's announcement today of the Future Made in Australia Act, but urges the federal government to ensure that specific, enforceable local content requirements are formally incorporated and the right investments are made. Only then will the federal government strengthen local manufacturing, drive real economic growth, and create the next generation of prosperity and opportunity.
The Future Made in Australia Act presents a critical opportunity to bolster local economic participation in the renewable energy transition.
According to Geoff Crittenden (CEO, Weld Australia), "Weld Australia congratulates Prime Minister Albanese on his announcement of the Future Made in Australia Act. It has real potential to ensure Australia has affordable, reliable clean energy, a strong manufacturing industry, skilled workers, secure jobs and modern infrastructure. It could see Australia become a renewable energy superpower."
"However, it is essential that specific, enforceable local content requirements are formally incorporated into the Future Made in Australia Act."
"Australian businesses have long advocated for specific, measurable local content requirements in government contracts. However, tangible examples of local content procurement policies are yet to materialise in Australia," said Crittenden.
"The federal government's Buy Australian Plan and the Australian Industry Participation scheme were bold steps aimed at harnessing the government's purchasing power to boost local industries. Yet, these schemes are failing to hit the mark."
"Besieged by vague specifications, a lack of enforcement, and loopholes that allow for non-compliance, the initiatives have struggled to provide local businesses with a fair shot at government contracts. Current requirements are fragmented across state jurisdictions and often fail to lead to new production capacity. Without action, the Future Made in Australia Act will be just as toothless," said Crittenden.
"The federal government must work with the state and territory governments to implement a coordinated, nation-wide approach to local content requirements to maximise impact and enable new production capacity. The government must be specific when it comes to the use of Australian materials and components, and registers of business providers and their level of domestic versus foreign ownership."
Weld Australia strongly recommends that a significantly favourable merit weighting be given to tenderers who guarantee local content of Australian fabricated steel as follows:
- Onshore Wind Towers >60%
- Offshore Wind Towers >40%
- Solar Farms > 60%
- Monopole Transmission Towers > 60%
- Lattice Transmission Towers > 60%
"The Australian Government's recent $1 billion investment in the Solar Sunshot program must be replicated in hydrogen and wind tower manufacturing. The domestic demand for wind towers over coming decades is huge. Based on AEMO scenarios, the market could range from $20 billion anywhere up to $80 billion."
Globally, wind tower manufacturing is concentrated in China and experienced the largest cost increase of all renewable energy technologies due to global supply-chain issues arising from COVID—estimated by the CSIRO to be a 35% increase.
"A local heavy manufacturing industry, backed by government investment, would deliver speed to market and reduce Australia's exposure to supply chain risk. Australia currently has reduced capacity in wind tower manufacturing because government contracts have long been offshored. However, major steel manufacturers such as BlueScope have expressed interest in wind tower manufacturing, as have Weld Australia's members," said Crittenden.
"Specific, enforceable local content requires and the right investment in heavy manufacturing will fortify domestic clean energy supply chains, boost investor confidence, and cultivate a skilled workforce for the energy transition, positioning Australia as a global renewable energy superpower."
