Salaries of coal and gas workers can’t be guaranteed as they transition to net zero jobs, says Greg Combet

Hundreds of billions of dollars in investment will be needed to fund Australia’s transition to net-zero emissions by 2050, says former Labor cabinet minister Greg Combet.

Net Zero Economy Authority chair Greg Combet at the National Press Club in Canberra on Tuesday. Picture: AAP

Hundreds of billions of dollars in investment will be needed to fund Australia’s transition to net-zero emissions by 2050, with former Labor cabinet minister and ACTU secretary Greg Combet declaring governments may need to become “significant equity players” to help derisk the transformative green-energy projects of the future.

But Mr Combet, the outgoing head of a new commonwealth body being set up to help Australia achieve net zero, was unable to guarantee the investment would result in blue-collar workers in emissions-­intensive industries being paid the same after they transitioned to clean-energy jobs.

He identified transforming Gladstone and similar industrial regions as a “key national endeavour” and revealed the federal budget would contain a package to encourage large-scale investment in green industries.

Under the proposed remit of the Net Zero Economy Authority, which Mr Combet has run since last July, it would make recommendations and regularly report to government, helping to procure investment for “trans­formational projects” such as a ­future Snowy 2.0.

The authority would attempt to obtain finance from existing commonwealth vehicles such as the National Reconstruction Fund, the Australian Renewable Energy Agency and the Clean Energy Finance Corporation, before going directly to the government.

Mr Combet acknowledged governments might need to be big investors to derisk projects and adopt a “long-term view before recovering capital”.

“In my view, successfully transforming the region around Gladstone, and similar regions around the country, must be a key national endeavour,” he told the National Press Club in Canberra.

“Green hydrogen, green metals, green manufacturing. There are opportunities like this in other industrial regions across Australia – whether that’s the Hunter Valley in NSW, Collie in WA, SA’s Upper Spencer Gulf or the ­Latrobe Valley in Victoria.”

Mr Combet said the Net Zero Economy Authority was putting together a pipeline of projects and working out how to help bring them to concrete investment decisions.

“Hundreds of billions of dollars in investment will be needed to achieve net zero in Australia,” he said. “Neither government funding nor private capital alone can meet this challenge. It will take both, working together, to secure the opportunities of Australia’s net zero future.

“The government will lay out the next phase of its approach in the May budget, which will look to capitalise on Australia’s comparative advantage in minerals and renewable energy, aiming to encourage large-scale investment in green industrial production.”

With the authority’s oversight, energy companies would be forced to participate in a redeployment scheme for their ­employees and large nearby businesses and other local employers would be brought in to discuss job opportunities.

Coal and gas workers facing the prospect of losing their jobs would be offered early retirement.

Mr Combet was unable to guarantee the thousands of coal and gas-fired power station workers would be able to earn as much in new clean-energy jobs.

“I cannot say with any certainty about that,” he said. ­“Obviously the ambition and the intent is to try and ensure that they are well paid, secure jobs in the new industries that will emerge. They are in key industrial regions where there is good industrial organisation, there’s well understood standards for industrial relations and I would certainly hope and anticipate that they will be satisfying and well-paid jobs.

“The authority will support them through a period of change, to acquire skills, to access new employment if needed, to help create jobs in new businesses and industries. The touchstone will be how well we handle the closure of coal-fired power stations.”

After the government introduced legislation into the House of Representatives last week to establish the Net Zero Economy Authority, Mr Combet sought to allay concerns about the Fair Work Commission’s broad powers to intervene in closures of coal and gas-fired power stations.

Under Labor’s proposal, the commission would be able to try to broker an agreement between employees and energy companies if workers from a power station felt they were not treated fairly in its closure.

“Quantifying the number of people that will need support is a very difficult thing to answer,” Mr Combet said.

“What we do know is that certainly by mid-2030s, 10, 11, 12 coal-fired power stations will be closing. There’s several thousand workers directly impacted by that and on top of that you have workers who may be employed in what we call a ‘captured coalmine’ – that is their only customer is a power station.

“The idea here is to minimise job losses and help business decarbonise existing emissions-intensive businesses and protect jobs and make sure they’re internationally competitive businesses so they’re sustainable jobs.”

Mr Combet said it would cost an estimated $400bn to renew coal-fired generation infrastructure or the nation could invest in a future with renewables. He said more than $45bn had been invested in renewables since 2017 and they made up almost 40 per cent of Australia’s energy generation in 2023 – well over double what was generated in 2017.

The government has identified four initial priority areas for building Australia’s net-zero economy: refining and processing critical minerals; supporting manufacturing of energy-generation and storage technologies including batteries; producing renewable hydrogen and its derivatives such as ammonia; and forging green metals.

Mr Combet said nuclear power had not been mentioned as he travelled across Australia over the past nine months talking to regional communities.

He said it would be a waste of the authority’s time to consider it as an energy source unless the government overturned the nuclear ban.

“If that happens, then obviously the authority has to think ‘okay, what does that mean for the work of the authority and the functions that it has?’ But also, as has been well traversed in recent times, it does not look particularly economically feasible either. I would be surprised if it is overturned in a hurry,” he said.

Peter Dutton is preparing to unveil a coal-to-nuclear policy to take to the next election.