Business leaders keen to bring forward net zero plans, but want more from government

Business leaders want to accelerate Australia’s net zero plans, but say more needs to be done on the regulatory front to help make that a reality.

There is overwhelming support for the development of a national carbon market strategy as well as a planned phase out of fossil fuels by 2040, a survey of executives carried out by the Carbon Market Institute shows.

The survey of more than 300 respondents, almost 60 per cent of which are CMI members, shows industry leaders are strongly supportive of deeper emissions cuts in the trajectory towards net zero – but the sentiment still lags behind science-aligned targets.

The Australian Business Climate Survey, now in its eighth year, indicates that 71 per cent of those surveyed want a managed phase out of fossil fuels by no later than 2040, with that figure rising to 89 per cent by 2050.

Slightly more than two-thirds of respondents, or 69 per cent, wanted Australia’s net-zero target brought forward to no later than 2045, from 2050.

A Carbon Border Adjustment Mechanism (CBAM) – which would serve to protect high emissions sectors such as steel and cement from imports which were cheaper by not having their carbon costs factored in – was supported by 64 per cent of respondents, though 27 per cent remained unsure.

Australian companies such as cement maker Adbri – which is a CMI member – have been advocating for the development of a CBAM in order to give them investment certainty, with Climate Change Minister Chris Bowen announcing last month the government would conduct two rounds of consultation on the issue with a view to releasing a report in the third quarter of 2024.

CMI chief executive John Connor said the survey results showed that business leaders were strongly supportive of the decarbonisation task, but wanted more certainty from the federal government around the regulations which would govern the path to net zero.

“The findings show most businesses recognise that Australia must transform its economy, but they want the right policy settings in place to ensure it’s achieved smoothly and in a fair way,” Mr Connor said.

“Although there are significant challenges that must be navigated and the abatement potential of carbon capture and storage is still to be determined, it’s clear that a fossil-free future forms part of this, and businesses want help and guidance to manage this over time.”

Mr Connor said the July 1 establishment of the Net Zero Economy Agency was an important step, as was the review of sectoral transition plans and consultation on the nation’s 2035 targets, with results from that process expected in 2025.

“Businesses clearly recognise the importance of reaching net-zero quickly, but the results suggest they lack confidence that the existing policy suite is robust enough – or applied widely enough across the economy – to support a stronger 2035 targe,’’ Mr Connor said.

Almost half of respondents said there was insufficient policy and regulatory guidance on their role in decarbonisation, and 65 per cent supported Australia hosting the COP climate change summit in 2026.

CMI members include BHP, Coles, the big banks and Orica.