A bigger role for government through direct investment in clean technology industries will support climate targets and jobs, a think tank says.
The top sources of budget revenue - coal, iron ore and gas - must be replaced by clean technology production lines with immediate and bold government support, according to the Beyond Zero Emissions (BZE) report released on Wednesday.
The global scale-up in demand for emission-reducing technologies to limit global warming to 1.5 degrees is so substantial that supply chain gaps are predicted to create significant opportunities for new players such as Australia, BZE said.
Australia could make batteries, heat pumps, solar panels, wind towers, and be part of the growing supply chain for electric trucks, utes and vans.
Rather than continuing to export emissions, immediately growing onshore clean tech supply chains could generate $215 billion in revenue and create 53,000 jobs by 2035, according to the think tank.
In regions once dependent on coal, renewable energy industrial precincts could co-locate manufacturers of EV chargers, batteries, electric buses, mining equipment, and assembly lines for wind farms.
"The most available and impactful opportunities for expanding Australia's onshore manufacturing are in wind and batteries," Beyond Zero Emissions chief executive Heidi Lee said.
For Australia to meet its own climate targets, there would need to be a more than three-fold rise in solar panels, nine-fold for wind, 16-fold for batteries, 27-fold for heat pumps and even more for commercial electric vehicles, the report found.
The Australian Conservation Foundation said a renewable manufacturing and export industry would need a dedicated centre to lead research and build public trust.
ACF also called for an end to the fuel tax credits for coal and gas producers, which it said was "an incentive to pollute", and the reinvestment of the saved taxpayer dollars into a $100 billion renewable industries package.
Prime Minister Antony Albanese announced on Wednesday his plans for "moving Australia up the international value chain", including $566 million over 10 years for Geoscience to map what's under Australian soil and seabeds.
Using clean energy to power heavy industry would be "a clear priority" in the federal budget, he said.
But BZE joined calls for next Tuesday's budget to include production credits to bridge the gap between Australia and lower-cost processing, refining and manufacturing elsewhere.
Australia ranks highly in critical commodities such as lithium, copper, nickel, cobalt and vanadium, and the ability to "dig and ship" the raw minerals at the start of a supply chain is particularly strong.
Local manufacturers may assemble some clean tech from costly imported components at the other end of the supply chain, but the nation does little in between, the report found.
With batteries for example, Australia typically sends its raw materials overseas where almost all (96 per cent) of the value is captured during processing and component manufacturing.
An exception is Energy Renaissance and its factory built in 2021 in Tomago, NSW, for large-scale manufacturing of battery systems made for tough, hot local conditions in defence, mining, transport and agriculture.
"We are proud to be Australian-owned and made - our batteries are manufactured right here in the Hunter," CEO Brian Craighead said.
"While we are seeing burgeoning demand for our products, there are still some barriers to overcome," he said.
