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The first meeting of the Energy and Climate Change Ministerial Council (ECMC) saw ministers formulating plans to compete with the US Inflation Reduction Act and discuss national energy, climate change and adaptation priorities.

The ECMC comprises federal, state and local government ministers demonstrating a united and strong commitment to work together to provide affordable, secure, and reliable energy, including through the National Energy Transformation Partnership, and to achieve net zero emissions by 2050.

At the inaugural meeting, ministers agreed to five strategic priorities for the coming 12 months:

  1. Transforming Australia’s energy system to align with net zero, while providing more affordable, secure, and reliable energy to Australians (including improving regulatory certainty and efficiency for, and accelerating delivery of, dispatchable renewable energy, storage and nationally significant transmission projects)
  2. Efficiently and effectively contributing to the achievement of all Australian emissions reduction targets
  3. Investing in Australia’s adaptation and resilience to climate change
  4. Empowering and comprehensively engaging with Australia’s regions and remote communities, including First Nations, on the pathway to decarbonization and Australia becoming a renewable energy superpower 
  5. Delivering a coordinated and strategic approach to achieving improvements in energy productivity across the economy

 

Emissions reduction

The ministers acknowledged action on climate change is a priority for our Pacific neighbours and welcomed both the Australian Government’s bid to host COP31 jointly with the Pacific and, if successful, the plan to call for expressions of interest to host the event by jurisdictions.

To accelerate emissions reductions through coordinated action the ministers are ensuring Australia’s regions are at the heart of new industry and jobs opportunities, especially in light of global policy changes such as the US Inflation Reduction Act, with the priority on deploying renewable energy as fast as possible. 

ECMC will consider on an annual basis a status report on progress across all sectors towards emission reduction targets, which will support the annual report to Parliament of the Federal Government Minister for Energy and Climate Change.

The Ministers recognised the impact high energy prices are having on east coast households, businesses and industry and welcome the benefits of the Federal Government’s energy price relief plan, with recent falls in wholesale gas and electricity prices expected to flow through to reduced increases in household and business electricity bills in 2023-24.  

ECMC noted progress towards incorporating an emissions reduction objective in the National Energy Objectives, a critical reform to provide investment certainty to industry and support emissions reduction outcomes in the energy market. The ministers committed to a near term timeline for agreement of the final Bill in Q2 2023. 

At the meeting, members agreed to expedite a package of carefully designed measures expanding the Australian Energy Regulator’s gas and electricity market monitoring powers, an essential function for a well-regulated and stable east-coast electricity market, with a view to passing this legislation as soon as feasible.

The Ministers requested the Energy Security Board (ESB) to work with Senior Officials and stakeholders to develop the voluntary Congestion Relief Market (CRM) and the priority access model and to bring forward a detailed design for consideration by ECMC in mid-2023. 

Ministers decided not to further develop or consider the congestion management model and congestion fee options, ruling out any models using locational marginal pricing. The CRM and priority access model reforms, if approved in late 2023, are estimated to yield net benefits for industry and consumers of up to $5 billion (NPV) and lower emissions by 23 million tonnes by 2050.

 

National Hydrogen Strategy

In a review of the National Hydrogen Strategy, Australia is on a path to be a global hydrogen leader by 2030 on both an export basis and for the decarbonization of Australian industries. The review of the strategy will take account of developments globally and in Australia since the original strategy was developed, including the impact of the Inflation Reduction Act in the United States and policies by other countries to support a hydrogen industry.  

 

National Electric Vehicle Strategy 

The National Electric Vehicle Strategy will provide a nationally consistent, comprehensive framework to increase the uptake of EVs, contribute to meeting the net zero emissions 2050 target and improve the wellbeing of Australians. 

Ministers agreed the framework for the strategy and six commitments to collaborate on national standards:

  1. Data sharing
  2. EV affordability
  3. Remote and regional EV charging infrastructure
  4. Fleet procurement
  5. Education and awareness on the benefits 
  6. Realities of driving an EV in Australia

New South Wales will continue to work with Energy Market Bodies on an orderly exit mechanism for use in their jurisdiction. 

 

National Climate Risk Assessment

Australia’s first National Climate Risk Assessment (NCRA) will deliver a shared national framework to inform Australia’s national priorities for climate adaptation and resilience actions and enable consistent monitoring of climate risk across all Australian jurisdictions. This will include the latest insights on risks emerging from the warming that has already occurred and how this is driving extreme weather events sooner than expected.  

 

Meeting Net Zero Goals 

A decarbonisation working group will be formed to ensure there are clear and consistent principles for reporting on how Australia is progressing towards its net zero targets and tasked the working group to come back with a work program for consideration by Ministers out of session. 

A cross-jurisdictional working group will be established by ECMC, including local government ministers, on the development of Australia’s offshore renewable energy industry and that the Federal Government will lead progression of priority offshore zones in a timely manner. 

ECMC will continue to engage on a program of work on consumer energy reforms aimed at improving market efficiency, competition and consumer benefits. In an update from the Federal Government regarding the development of the National Energy Performance Strategy, a forward plan for demand-side action which will improve energy performance across the economy and reduce emissions.

To support decarbonisation and energy performance objectives, ECMC agreed to continue strong collaboration with the Building Ministers’ Meeting on strengthening energy efficiency provisions in future editions of the National Construction Code. In an update on the progress being made to deliver a strong package of consumer protections for energy users, more than 60 separate projects underway across Australia and the energy market bodies. 

A national energy literacy program will be further explored by the Energy Consumers Australia to address current knowledge gaps and ensure consumers are exposed to consistent, targeted and accessible messaging that empowers them to further reduce their energy costs. 

 

ECMC will meet next in May 2023 in the Northern Territory. 

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