Accelerating Battery Industry Hub Development in Australia

With growing need for global action on climate change, national concerns on resource security and supply chain vulnerabilities, green technologies and energy storage systems have become critical. This increased the significance on critical minerals and batteries manufacturing, the sectors delivering - for example - renewable energy storage systems and electric vehicles. Whilst China has dominated these supply chains, nations - such as Germany, Norway, Belgium, Korea, USA and Japan - are moving into new or strengthening existing battery value chain positions to increase their respective capacities. Australia is also investigating a move downstream in the battery value chain from its current position as primarily a raw materials producer with some refining and chemical production. The competition for key industry players in the batteries manufacturing industry is global, with locations in Europe, USA and Japan offering substantially more funds, better infrastructure, more streamlined processes, more tax breaks and incentives than Australia does. If Australia wishes to move further into downstream production within this highly-competitive fast-emerging industry, it needs a coordinated and strategic approach to accelerate hub development, streamline industrial and governance processes for greater efficiency. Growing an advanced manufacturing battery hub in Australia implies understanding its competitive advantages, as well as addressing barriers through innovative approaches to industry development. Australia’s natural resource endowment in batteries minerals must be viewed as an intergenerational opportunity to develop future industries. But its potential to grow such an industry must be contextualised by the large number of nations that have already invested heavily (both government and industry), and are existing original equipment manufacturer (OEM) consumer markets. This report aimed to better understand the value proposition for geography in different batteries manufacturing hubs globally, and the lessons that could be drawn for Australia. To do so, it examined the three international case study sites of: 1) Leipzig-Dresden-Berlin (LDB) Triangle, Germany; 2) the Gigafactory in Nevada, USA; and, 3) Osaka, Japan. From these case studies, it is clear there is no perfect ‘hub’ location or model. Each evolved through and offers access to different complementary industries, small-to-medium businesses, multinationals, government services, training facilities, R&D institutes, universities, infrastructure, etc., as well as different policy or operational contexts. Drawing on the international case studies and interviews with Australian proponents, a hub proposition for Australia emerged (see figure 12) which informed key insights for Australia. As such, the insights are highly relevant to and embedded in an understanding of the Australian context. Each is framed by what is needed to grow an Australian battery manufacturing industry and concludes with a hub development action list. This produced nine recommendations and associated short to medium term priorities for action for implementation. The recommendations and key priorities for action of the report will be implemented differently in different hub locations, with no ‘one-size-fits-all’ framework for operations. As such, there is a need for further research into possible hub locations within Australia, and into how the report’s lessons and priorities for action might be critically interpreted and applied. While an Australian battery production hub needs to be positioned and well-connected globally, domestic cross-industry synergies are also key in supporting hub emergence and development. For example, an active and efficient batteries manufacturing hub is compatible with Australian Department of Defence efforts to develop in-country manufacturing capacity. Similarly, batteries are needed to store energy for the emerging hydrogen fuel industries, and can assist in the de-carbonizing of the mining industry. Indeed, such cross-industry connections may well be the beginning of a virtuous circle that could support building a transition to more sustainable industries in Australia – and the development of battery manufacturing hubs is strategic in progressing this.