Australian Industry Group chief executive Innes Willox lashes states on climate targets

Business argues the states’ 2035 targets, set ahead of the commonwealth, will increase the risk of the electricity grid failing.

AiGroup chief executive Innes Willox has criticised state governments for setting their own 2035 emission reduction targets ahead of the commonwealth. Picture: Aaron Francis

Business has criticised state governments for setting their own 2035 emissions reduction targets ahead of the commonwealth, arguing the haphazard approach will increase the risk of the electricity grid failing.

Australian Industry Group chief executive Innes Willox – who represents energy, manufacturing and building businesses – said premiers were putting the grid reliability at risk “because of short-term thinking aimed at proving their environmental credentials”.

Mr Willox said it was a mistake for state governments to try to “outdo” each other on climate policy.

“We need to work together, not turn into competitors in a sack race where many participants won’t make the finishing line,” he said. “Already this summer, parts of our grid are being stretched to nearly breaking point as regulators, energy providers and users struggle to work through the closure of established facilities and manage the energy transition.”

The Australian reported on Monday the Albanese government was under pressure from major unions to unveil a 2035 emissions reduction target of more than 70 per cent, after new Queensland Premier Steven Miles announced a plan to cut that state’s carbon footprint by 75 per cent of 2005 levels by 2035.

The Queensland target is broadly in line with the 2035 goal of NSW (70 per cent) and Victoria (75-80 per cent).

But Mr Willox said there needed to be a co-ordinated approach to selecting climate targets “examining the consequences and sequencing of actions impacting industry, its workforce and the communities they serve”.

“Simply being told what to do by a government setting targets to create a headline will not cut it,” he said. “Rather than driving investment, such an approach will only drive it away because of the uncertainty it creates.”

The left-wing Electrical Workers Union and Australian Manufacturing Workers Union say the federal 2035 target – likely to be adopted ahead of COP29 at the end of next year – should not be lower than the three biggest states.

But the right-wing Australian Workers Union, the union of Bill Shorten and Jim Chalmers, is warning against adopting targets that would threaten heavy manufacturing. AWU national secretary Paul Farrow said the transition to net zero will be “much more complex than environmental activists claim”.

“There’s absolutely nothing wrong in principle with ambitious carbon reduction targets, so long as they do not compromise the viability of Australian manufacturing,” Mr Farrow said. “The Albanese government has understood this, which is why we have safeguard mechanisms that create special conditions for emission-heavy enterprise.

“But you also have the Greens, and fringe elements within the labour movement, who like to demonise energy-intensive manufacturing, and want to pretend vital materials like aluminium, steel, cement and glass can be produced from renewables alone.”

Mr Farrow also hit out at calls to phase out gas, embraced by the Victorian Labor government.

“Turning off the gas might make sense to an inner-city crowd, but in reality gas is the perfect partner for the world’s transition to renewable energy,” Mr Farrow said.

“It will allow us to switch rapidly and confidently to renewables by providing assurance factories and power grids stay operational. That role is relevant domestically, but even more relevant for Australia’s trading partners.”

Climate Change and Energy Minister Chris Bowen said the 2035 target was both ambitious and achievable. It needs to be ambitious, it needs to drive behaviour, it needs to send the important signals to the market, to investors, and it will do that. But it’ll also be achievable,” he told the ABC.

“Many people can put figures out there. Without … a concrete plan to achieve them they’re just figures. That’s the approach we’ve taken all the way … Not only putting out targets but putting out very concrete levers and mechanisms to achieve those targets.”