Scrapping net zero risks billions in critical minerals investments, Chalmers warns

The Treasurer has delivered a brutal verdict on the Coalition’s decision to ditch net zero – warning it will kill private capital earmarked for a critical sector.

Scrapping net zero and pumping the breaks on Labor’s renewables rollout is “economic insanity” that risks billons in private capital earmarked for critical minerals projects, Treasurer Jim Chalmers says.

Critical minerals are vital for modern technologies, including renewable energy sources.

The federal government has sought to position Australia as a challenger to China’s global grasp on the sector, announcing a $13bn deal with the US last month and giving tax breaks to critical minerals firms – tax breaks the Coalition has opposed.

Deloitte’s latest Investment Monitor report suggested there was north of $11bn in critical minerals investment planned across the country, tallying with Treasury modelling saying that Australia’s pursuit of carbon neutrality by 2050 has bolstered certainty.

Treasurer Jim Chalmers says scrapping net zero would ‘put billions of dollars of critical minerals projects at risk’. Picture: NewsWire / Nikki Short

“What the Coalition is proposing would decimate investor confidence around Australia and risk billions of dollars of investment,” Mr Chalmers said on Sunday.

“Abandoning net zero would swing a wrecking ball through the energy market, through investor certainty and put billions of dollars of critical minerals projects at risk.

“The net zero transformation is a golden economic opportunity for Australia and our advantages in critical minerals are a really important part of that.

“The proposal that the Coalition has put forward would turn Australia’s back on that opportunity, which would be a disaster for our economy and a disaster for investment in our industries.”

He charged that dumping net zero “would mean less investment, higher energy prices and fewer jobs”.

Treasury modelling found the “economic costs to Australia of not pursuing net zero would be significant and consequential”.

“Not pursuing net zero by 2050 risks lower economic growth, reduced investment, missed export and employment opportunities, and higher electricity prices,” it said.

“These outcomes would flow from several channels, including heightened policy uncertainty, increased borrowing costs on global markets, and the loss of potential new export markets.”

The Coalition, however, has argued the opposite.

It has pinned higher energy costs crippling manufacturers on the Albanese government’s renewables agenda.

Opposition Leader Sussan Ley has wiped net zero from the Coalition’s platform. Picture: NewsWire / Flavio Brancaleone

Opposition finance spokesman James Paterson said on Sunday that the Coalition was “very clear we want to continue to reduce emissions … but we’re not going to do so at the expense of affordable energy”.

“Affordable energy is our number one priority, and we’re willing to change the direction to the Australian energy market operator to make clear that their priority should not be emissions reduction,” Senator Paterson told Sky News.

“It should be energy affordability, and that’s the problem that we’ve got under Labor right now.

“The only thing that matters to Labor is a 2050 target of net zero.

“They have no regard for energy affordability, and look at the damage that’s doing – they’ve got energy subsidies because they don’t want households to feel the real pain of electricity prices, and they’re running around the country bailing out heavy industry energy users like smelters because they’re uncompetitive under Labor’s energy policies.”

Originally published as Scrapping net zero risks billions in critical minerals investments, Chalmers warns