Industrial Electrification and Substitution will help avoid gas shortfalls
A dramatic shift away from gas could be the key to securing Australia’s industrial future, according to a groundbreaking new report. Released at Parliament House in Canberra, Turning Down the Gas, commissioned by the Australian Manufacturing Workers’ Union (AMWU) and Lock the Gate Alliance, argues that drastically reducing gas consumption could stabilize manufacturing, safeguard hundreds of thousands of jobs, and strengthen the national economy.
At the heart of the report lies a bold assertion: at least 90% of industrial gas use can already be replaced with electricity or green hydrogen, with innovative solutions on the horizon for the remaining 10%.
By 2035, such a shift could cut domestic gas demand by 216 petajoules, reduce greenhouse gas emissions by over 11 million tonnes annually, and save the economy at least $2.5 billion in wholesale gas costs.
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Securing Jobs and Stabilizing Manufacturing
AMWU National Secretary Steve Murphy emphasized the critical intersection of climate action and job creation, urging the government to prioritize this dual objective.
“Gas companies’ interests are cutting across those of Australian workers and industries,” Murphy stated. “This is about ensuring our local manufacturing industries thrive in a decarbonizing world while supporting skilled workers and the communities they sustain.”
The report envisions a future where existing industries—spanning food production, healthcare, and infrastructure—transition to cleaner energy sources, ensuring stability in sectors vital to everyday Australian life.
Electrifying the Path to Decarbonization
The report identifies specific opportunities to reduce gas dependency:
- Manufacturing Transition: Substituting gas in industrial processes with electricity could slash demand by 112 PJ by 2035.
- Commercial Building Upgrades: Electrifying heating and other systems in commercial spaces could reduce gas usage by 25 PJ.
- Green Hydrogen Solutions: Industries like metal smelting, chemical manufacturing, and steel production could adopt green hydrogen to save 62 PJ.
- Targeted Research for Tough Industries: Sectors such as cement and glass manufacturing, considered “hard to abate,” could benefit from targeted government support to cut another 8 PJ.
The report also highlights the role of government intervention, urging policies to restrict LNG exports from uncontracted gas and calling for research investments to help industries make the transition.
A National Vision for Energy Independence
Tom Quinn of Springmount Advisory, who authored the report, described the findings as a roadmap for Australia’s energy independence.
“The challenge was to identify what could be achieved now and what requires more long-term planning,” he said.
“This is about creating a secure energy future for our manufacturing sector, which has been strained by volatile gas prices and supply disruptions.”
Lock the Gate Alliance spokesperson Georgina Woods echoed the sentiment, criticizing the current prioritization of LNG exports over domestic needs. “Australia doesn’t have a gas shortage,” Woods remarked, “but we have a failure to put national interests above the profits of wealthy gas companies. This report offers a better vision—one that supports manufacturing jobs while protecting farms, water, and the climate.”
Gas Prices Skyrocketed
Since exports began, gas prices and extraction levels on the East Coast have surged, with average wholesale prices rising sharply from $3.28/GJ in 2014-15 to $11.65/GJ in 2023-24.
This rapid price escalation was a major factor behind cost inflation during the 2022-23 spike and continues to drive ongoing inflation.
Reducing industry reliance on gas is essential to enhancing economic stability and security.
A Call to Action
As global markets shift towards decarbonization, Australia faces a critical juncture. The Turning Down the Gas report offers a clear, actionable path forward, balancing energy innovation with economic and environmental sustainability. With the right government support and industry collaboration, the vision outlined in this report could not only transform manufacturing but also position Australia as a global leader in green industrial practices.
The stakes are high, but the opportunity is clear: turn down the gas, and turn up the future for Australian manufacturing.
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