Australia’s chemistry sector peak body, representing the $48 billion chemical and plastics industry, says Australia will struggle to realise its net zero ambitions without first addressing barriers to investment such as soaring energy costs and declining productivity.

Structural impediments to investment such as skills shortages, ongoing policy uncertainty, red-tape that stifles productivity, and unreliable, high-cost energy continue to create uncertainty for businesses in Australia.

Chemistry Australia today released its policy recommendations, An ambitious vision for investment in Australian chemistry, which detail the industry’s vision for the future of Australian manufacturing, prioritising sustainability, innovation, and resilience.

Chemistry Australia CEO Samantha Read said domestic policy must consider the underlying competitiveness of doing business in Australia to secure our manufacturing industries and their vital role in Australia’s supply chains.

“If we genuinely want Australia to become a renewable energy superpower or leader in advanced battery technology, we need Governments to first address the business environment for investment in Australia,” said Ms Read.

“It doesn’t matter if you are a new industry, or a mature industry in Australia, the economic conditions are very challenging.”

“Unfortunately, high energy prices, increasing regulatory burdens, and the cost of doing business generally in Australia continue to discourage investment.

“While we appreciate the Federal Government’s commitment to manufacturing through the $15 billion National Reconstruction Fund and efforts to develop emerging industries, we are not seeing the policy response to ensure Australia is competitive on a global scale and able to attract mobile global capital.

“Unless we can provide a globally competitive and sustainable operating environment, it becomes very difficult to maintain and invest in existing operations and attract future manufacturing investment to Australia.”

The global chemistry industry is an essential supplier of solutions and technologies that will enable industries to reduce their emissions. More than 75 per cent of all emissions reduction technologies needed to meet 2050 net zero goals depend on chemistry industry support1. In Australia, the chemistry sector underpins 108 of 114 industries, with 68 per cent of its output supplied to other Australian industries2.

Ms Read said Australia’s role in manufacturing the necessary chemistry-based technologies to deliver the energy transition may never be realised due to Australia’s uncertain investment conditions.

“We are presently facing a choice to let businesses continue to close, and import chemistry from elsewhere, or we can choose to foster the conditions for local businesses to innovate and develop much-needed solutions for the Australian market.”

“With the right policy measures in place, Australia has an opportunity to grow its manufacturing and supply-chain capability, which in turn enables the industry to support and invest in future technologies, creating a multiplier effect across the economy.

“On the other hand, if we choose to rely only on imported chemistry, we take the risk of adding further pressure to Australia’s supply chains, which are already vulnerable to increasing geopolitical instability and other disruptions.

“Our new policy whitepaper presents a range of recommendations to ensure Australia attracts the investment in chemistry necessary to deliver the net zero transition, establish a more circular economy and maintain our nation’s sovereign capability.”

“With the right policy settings in place, strategically important industries like ours can continue to supply the essential building blocks for the economy and play their part in Australia’s manufacturing future.”

To learn more about Chemistry Australia’s policy recommendations, head to:
An ambitious vision for investment in Australian chemistry, Chemistry Australia Policy Priorities.

¹ 2024 Chemical Industry Outlook - The chemical industry should balance short- and long-term goals to weather the uncertainty in the current landscape and position itself for the future, Deloitte, 2023
² Page 14, An Overview of the Australian Chemical Industry, 2022-23 update, Acil Allen, 2024