WA’s fossil fuel exports could drop by $28 billion under net-zero future: report
Fossil fuel exports from Western Australia could fall by $28 billion over the next quarter century, according to a new report; This raises concerns about the future of the state’s prosperity, given its dependence on the sector.
Fossil fuel exports could fall from $39 billion in 2025 to $11 billion by 2050, according to a future scenario modeled in a latest report by the Perth-based Bankwest Curtin Economic Centre.
At the same time, critical minerals needed for batteries, electric vehicles, renewable energy and emerging technologies could generate $100 billion per year by the same deadline; This is five times more than today’s $20 billion.
This is under the report’s “accelerated scenario”, which assumes the world will reach net zero by 2050.
Even under the report’s “base case scenario,” which reflects the current trajectory of decarbonization in which fossil fuels continue to play a significant role, gains from critical minerals still rise by 58 percent.
And its “sustainable scenario” resulted in a 142 percent increase.
The report claimed WA risked being left behind unless it moved beyond the traditional “dig and ship” model.
“For decades our prosperity has been built on the extraction and export of resources,” said Alan Duncan, co-author of the report and director of the Bankwest Curtin Economic Centre.
“This model has served Western Australia incredibly well, but the next chapter will look different.
“The question is not whether we have the resources. The question is whether we can create more jobs, more industries and more long-term value from them before they leave our shores.”
“The challenge is to ensure that today’s mining wealth becomes the industries, jobs and financial value of tomorrow.”
Alan Duncan, Director of Bankwest Curtin Economics Centre.
According to the report, the resource sector currently contributes $200 billion to the state’s economy each year; Iron ore produces about $126 billion, accounting for more than 80 per cent of WA’s concession revenue.
However, the report claimed that iron ore will be responsible for the decreasing share of production over time, while demand for critical minerals such as lithium is expected to increase.
This despite US lithium giant Albemarle is shutting down We established the Kemerton lithium hydroxide processing plant in February.
Report co-author Silvia Salazar said WA had the opportunity to build on its existing strengths if it acted now.
“We have the minerals, expertise and global reputation to be leaders in the industries emerging from the global energy transition,” Salazar said.
“But success is not guaranteed.
“Other countries are competing tightly for the same opportunities, and if we want to capture a larger share of global demand we will need the right energy, infrastructure, skills and investment environments.”
Mining and oil royalties provide the Western Australian government with almost $10 billion in 2025; This amounts to approximately one-fifth of total state revenue.
Duncan said the level of confidence underlined the need for coordinated action across government, industry and society to reap the full benefits of the transition.
“WA earned almost $10 billion from limited resources last year, which raises an important question: What are we leaving for future generations?” he said.
“A wealth of resources has helped build our hospitals, schools, roads and public services. But these resources will not last forever.”
The report also examined a range of alternative fiscal environments, including copyright reform, changes to resource taxation regulations and a hypothetical public equity stake in a major LNG (liquefied natural gas) development.
A hypothetical 30 percent public equity interest in a new $50 billion LNG project could create a long-term revenue stream that extends well beyond the productive life of the resource if returns are invested through a future funding model.
“The difference between one financial arrangement and another can reach billions of dollars over the life of a project,” Duncan said.
“The challenge is to ensure that today’s mining wealth becomes the industries, jobs and financial value of tomorrow.”
Holly Thompson is a journalist at WAtoday specializing in education and the environment.Connect with: X or email.
