Industry Reports
Turning down the Gas - Supporting our manufacturing sector to cut gas costs, secure jobs and build a thriving zero-emissions future
Year - 2024 Partners - Lock the Gate and Australian Manufacturers Workers Union
This report focuses on fossil gas use by industry and manufacturers on the East Coast of Australia and the potential to accelerate gas phase-out in industrial settings. It shows that significant reductions in gas use (216 PJ) can be achieved by 2035 which will avoid shortages, cut costs, provide job security for the nation’s 900,000 manufacturing workers and reduce emissions.
Many industries within Australia’s manufacturing sector today utilise gas as either a direct input or energy source during production. With surging gas prices and threats of domestic shortages, there is an urgent need to support the manufacturing sector to deploy decarbonisation technology at speed and scale to ensure its ongoing viability/future competitiveness.
This report shows that the majority of industrial gas use (90%) on the East Coast can be replaced with proven and commercially available technology today. Industries can be grouped into three broad categories based on whether their gas using processes:
can be electrified now: 60% (244 PJ) of manufacturing gas use is in processes that can be electrified, including the LNG sector
can be regassed with hydrogen: this includes approximately 30% (123 PJ) of industrial gas use for processes like steel making and ammonia production.
are harder (but not impossible) to abate: industries where fossil gas use can be reduced but will require more technology research and innovation to completely phase out.
A comprehensive program and supportive policy environment is required to help our existing manufacturers to move from gas to alternative fuel sources. Doing so will enable mass deployment and cost reductions of these commercially available technologies, and ensure the availability of gas for the 10% of industrial use which is genuinely harder to abate.
The report shows how Australia can support this transition and in doing so:
Reduce wholesale gas expenses by the East Coast manufacturing sector by at least $2.5 bn
Lower gas demand in 2035 by 216 PJ (Manufacturing by 112 PJ; Commercial buildings by 25 PJ; LNG onshore gas use by 79 PJ)
Mitigate risk of future domestic gas shortfalls
Reduce emissions by 11.1 MTCO2-e per annum by 2035
Safeguard hundreds of thousands of manufacturing jobs during the transition
Support manufacturers to reduce exposure to recurrent gas price hikes which impact competitiveness and increase costs to end consumers.