All pledge, no investment on decarbonisation


Hey Reader, in today's edition:

  • Enter the capital allocation matrix
  • Is the Safeguard Mechanism working?
  • Australia’s 48th Parliament opens

Capital allocation lost in translation

Australia’s largest companies are not backing up their decarbonisation pledges with adequate investment, according to a report by specialist climate advisory and investment firm Pollination for the Investor Group on Climate Change (IGCC).

With many corporates still in the early stages of embedding climate into financial systems and decision-making on capital allocation, the report included a practical evaluation matrix and a structured set of questions for assessing capital allocation:

  • Capital is sourced and raised in ways that supports delivery of net-zero outcomes (embedding climate goals directly into capital raising and cashflow decisions)
  • A credible climate strategy exists to steer capital allocation (including targets, transition plan, risk analysis and governance)
  • Capital management clearly embeds climate risks and opportunities into investment decision-making processes (best practice is not just a question of how much)
  • Disclosure of capital allocation management processes is clear and sufficient to understand why allocation is consistent with company targets and transition plans
  • Capital deployed is shifting away from non-transition aligned investments (such as fossil fuels)
  • The company is directing capital towards transition activities aligned with a transition action plan
  • Practices beyond capital allocation are in play, including industry and policy engagement.

A credible 2035 emissions reduction target, supported by detailed roadmaps for each sector of the economy, as promised by the federal government, will also be handy.

"Australia has the opportunity to lead in the transition, but without clear policy signals and adequate capital deployment, we risk being left behind and missing out on huge economic opportunities.”
IGCC Director of Corporate Engagement Richard Proudlove

And the Safeguard Mechanism?

Until a suitable 2035 target is set and sectoral plans are in front of investors, the Safeguard Mechanism is one of the most significant tools available to shape industry behaviour.

The reformed mechanism has become a major source of demand for Australian Carbon Credit Units (ACCUs), Assistant Minister for Climate Change and Energy Josh Wilson told the Carbon Market Institute’s Safeguard Symposium in Sydney.

“In the first year of the Safeguard reforms, the ACCU market provided ample supply for Safeguard facilities. In fact, 2024 marked the biggest trading year by volume in the scheme’s history,” Wilson said.

“We need to have — and maintain — confidence that the abatement sitting behind ACCUs is real and additional. That is essential to the market and it is essential to meeting our climate targets, and showing climate leadership at a challenging time.”
Assistant Minister for Climate Change and Energy Josh Wilson

New methods would bolster integrity and supply, he said, with $66 million already allocated to reforms including system-wide improvements to transparency and governance.

Expert view

Nobody is pretending that the reformed safeguard mechanism is the simplest, most efficient way to regulate large emitters. It’s complicated, but that doesn't mean it’s ineffective. And it certainly doesn’t mean it can’t be made more effective.

There are many options on the table for when the review kicks off next year. They include restricting the use of ACCUs by safeguard-covered businesses. For example restrictions could be introduced on the volume or age (“vintage”) of the ACCUs they use. Some have also argued that safeguard covered facilities should be able to use international carbon credits. Other key issues likely to crop up include sector-specific amendments to the mechanism, tighter restrictions on earning SMCs, and expansion of the scheme to cover more facilities.

Meanwhile, the arrangements for protecting the commercial interests of trade-exposed businesses are likely to be reviewed if Australia introduces a carbon levy at its border.”

Murray Griffin
founder of advisory firm Earthed

Renewables need to win regional Australia

In a letter to members, the board of the Clean Energy Council has said the renewables industry needed to “redouble” its efforts to build community support for the energy transition in regional Australia.

It says it wants to shift its image from being a “challenger brand” to the “voice of the industry that will deliver and operate the power system of the future”. As part of that new direction, the Council must be "pragmatic" about the role of gas as a mid- to short-term energy source. “Acknowledging this reality is critical to our credibility as an industry body,” the letter said.

The views are part of a broader reset of the group’s strategy agreed at a two-day meeting of the board and senior management following Labor’s landslide election win. The changes to the CEC’s strategy have been largely driven by four companies – Tilt Renewables, Spanish renewables players Acciona and Iberdrola and Andrew Forrest’s Squadron Energy – who seized four vacancies on the CEC board in late 2024. (AFR)

Catch Up

Capital

Carnarvon Petroleum (ASX: CVN) is set to take a stake in Strike Energy (ASX: STX) in a deal that could provide about $100 million for the WA junior to expand exploration and gas power generation, putting spare cash to use as it waits for Santos (ASX: STO) to proceed with its delayed Dorado oil and gas project. (AFR)

IperionX (ASX: IPX), a critical minerals developer and manufacturer of low-carbon titanium alloys and nuts, bolts and screws is seeking $70 million via a placement by its broker Petra Capital. (AFR) (Capital Brief)

The New South Wales Government has given the green light to a $81.4 million bioenergy facility in Horsley Park. The Delorean Corporation facility will divert up to 150,000 tonnes of organic waste from landfill each year, using anaerobic digestion technology to produce methane to run the Austral Bricks plant, replacing natural gas. (Energy Magazine)


Projects

Rooftop solar systems have been installed in the remote WA communities of Warmun and Bidyadanga as part of Horizon Power's Kimberley Communities Solar Saver program. Work in a third community, Ardyaloon, is underway. The state and federally funded program started in Warmun, with Horizon installing 422kW of rooftop solar, followed by 356.4kW in Bidyadanga. The program is expected to install up to 300 rooftop solar systems across five communities, with a combined capacity of 2MW.

“Kimberley Communities Solar Saver is like a solar farm, using residential rooftops instead of land, with the benefits being equally distributed among the community customers … Instead of relying solely on diesel generators, community residents can benefit from shared solar power, resulting in a cleaner and cheaper type of energy.”
WA Minister for Energy and Decarbonisation Amber-Jade Sanderson


The next phase of the Social Housing Energy Performance Initiative (SHEPI) in the ACT will include a $12.9 million project to install rooftop solar and batteries that will be connected to a Virtual Power Plant. Nationally, more than 9,500 properties have already received energy performance upgrades through SHEPI partnerships with the federal government, with households saving around $1,800 on their energy bills each year.

“Our next phase of investment in solar and battery systems will further strengthen energy resilience for tenants, while contributing to a more sustainable, low-emissions energy network for Canberra.”
ACT Energy Minister Suzanne Orr

Policy

People expect the federal government to make a “real, practical difference” to their lives, Prime Minister Anthony Albanese told caucus before the opening of the 48th Parliament. Tuesday will be ceremonial, with the first legislation to be introduced on Wednesday, starting with a bill to reduce student debt by 20% and child care reforms. He said energy bill relief and subsidised batteries were part of a “down payment on what will be our year of delivery”, and they were “making an enormous difference, permanently lowering people's power bills as well as helping the entire system because it takes pressure off the energy grid”.

“We know that each and every day we must work hard to repay the faith that has been shown in us … People don't expect perfection. They understand that the world will throw things at us, but they expect that we will put them first rather than be focused internally on what goes on in this building.”
Prime Minister Anthony Albanese


Nationals Leader David Littleproud said a review of the party’s position on net zero was still underway and “we'll get to an informed position, much like we did with the Voice”. He claimed net zero was almost impossible to achieve, saying it should be about “trying to reduce emissions in a sensible way, but not at any cost and not at the cost of regional rural Australians”.

“I just say to city people, we're not saying we don't believe in climate change, we're just saying you're asking us to bear all the burden.”
Nationals Leader David Littleproud told Sky News

Technology

Australian engineering company Pyrocal was selected as preferred contractor to install its Continuous Carbonisation Technology (CCT) at a treatment facility in the Capital Regional District of British Columbia, Canada, to convert biosolids into biochar. Building on Pyrocal’s Australia-first unit at Queensland’s Loganholme Wastewater Treatment Plant, CRD Board Chair Cliff McNeil-Smith said their process reduced emissions and removed carbon from the atmosphere while significantly lowering biosolids disposal costs and the need for landfill. The Canadian project is expected to commence early next year.


Climate

Demonstrators rallied outside the Land Court in Brisbane opposing what is set to be one of Australia's biggest coal mines, saying the Whitehaven Coal (ASX: WHC) proposal would contribute to a "climate catastrophe". (AAP)

"It's the right project, in the right place, by the right miner at the right time.”
Barrister Saul Holt KC, acting for Whitehaven

People

Countering ageism is key to unlocking Australia’s productivity potential, according to older people's advocacy organisation COTA Australia. A report by the Australian Human Rights Commission and Australian Human Resources Institute found almost one quarter of HR professionals now classify workers aged 51 to 55 as “older”.

“The more we sideline older people, the more we all lose, through wasted experience, lost productivity, and missed chances to build a better future. Ageism doesn’t just hurt older people — it impacts us all. Putting measures in place to address workplace discrimination will be good for everyone — older people who want to continue to work, businesses, younger workers, and our economy as a whole. Older Australians aren’t a problem to fix. They’re a big part of the solution. It’s time we saw them that way.”
COTA Australia CEO Patricia Sparrow

Research

Microgrid systems with hydrogen could work for remote areas. A new computational design tool is proposed for renewable power microgrids with integrated hydrogen energy storage in this academic paper by US-based Jack Cimorelli, Victor Eniola, Christopher Niezrecki, Xinfang Jin and David Willis in the International Journal of Energy Research.


Random

Large-scale wind and solar anyone? Macquarie put the $2.5 billion Paraway agricultural empire, comprising 28 stations across Queensland, NSW and Victoria, up for auction. (AFR)

What's On

July 22
Smart Energy South Australia

Federal Energy Minister Chris Bowen will headline at the Smart Energy Council conference and expo in Adelaide.


July 29-30
Australian Clean Energy Summit (ACES) 2025

AEMO CEO Daniel Westerman, AEMC Chair Anna Collyer, Climate Change Authority Chair Matt Kean, AGL CEO Damien Nicks, Iberdrola Australia CEO Ross Rolfe and Squadron Energy CEO Rob Wheals are among the lineup at the Clean Energy Council’s flagship event in Sydney.


July 30
Australian Sustainable Finance Summit

Treasury Deputy Secretary Angelia Grant, Original Power Executive Director Karrina Nolan, and Australian Office of Financial Management CEO Anna Hughes are among the line-up at this Sydney event.


August 7-8
2025 ACCC/AER Regulatory Conference

Former chair of UK energy regulator Ofgem Professor Martin Cave, AEMC Commissioner Sally McMahon, Treasury Assistant Secretary - Competition Taskforce Anna Barker, Essential Services Commission Chair Gerard Brody, and Marinus Link Chair Sandra Gamble are among the speakers at this event in Brisbane.


August 13-14
2025 Australasian Emissions Reduction Summit

Victoria’s Minister for Climate Action, Energy and Resources Lily D’Ambrosio, Climate Change Authority Chair Matt Kean, Carbon Market Institute Chair Dr Kerry Schott, Co-Founder and CEO of CORE Markets Chris Halliwell, Investor Group on Climate Change CEO Rebecca Mikula-Wright and BHP Australia President Geraldine Slattery will speak at this event in Melbourne.


August 14-15
First Nations Clean Energy Symposium

Government, industry, academics and regulators will join over 200 First Nations leaders from around Australia at this event on Kabi Kabi country (Sunshine Coast).


August 18
National Press Club

Productivity Commission Chair Danielle Wood will speak on the “Growth imperative: How to fix our productivity problem” at this event in Canberra.


August 26-27
Australian Renewable Heat Conference

Climate Change Authority Chair Matt Kean, ARENA investment manager Peter Haenke, and AGL sustainability expert Brendan Weinert will speak at this event in Sydney.


August 26-28
2025 New Zealand Wind Energy Summit

NZ Minister of Energy Simon Watts, Secretary-General of the World Wind Energy Association Stefan Gsänger, Global Wind Energy Council CEO Ben Backwell, Commerce Commission Chair Dr John Small, and Transpower Executive General Manager - Future Grid John Clarke headline this event in Wellington, NZ.

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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