Australia may be running in both lanes of the clean energy race as a trading buddy of the United States and long-standing source of critical commodities for China.
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But it is barely out of the starting blocks on building the sovereign industrial base needed for an advanced, low-carbon, job-rich economy, a manufacturing summit has learned.
The nation does not need to be merely "a farm, a quarry and a nice place to live", Assistant Minister for Trade and Manufacturing Tim Ayres told the summit on Thursday.
Advanced economies led by the US want to end the dominance of China in every category of clean energy - from electric cars and factory-ready battery minerals to wind turbines and their components.
Under a framework of tax credits, loans and subsidies, the Biden administration is splashing more than $US1 trillion on clean energy and bold investment plans have been echoed in Europe, Canada, India, Japan and South Korea.
"We want to be beneficiaries, not victims, of the massive investments Americans are making in clean energy manufacturing," Mr Ayres said.
As a free-trade partner of the US, Australia stands to benefit from preferential treatment as a source of metals, minerals and know-how.
"But the IRA (US Inflation Reduction Act), of course, distorts global investment as well as growing global investment," Mr Ayres said.
He said Australia's response to the competitive challenge of the IRA would identify actions in response by the end of this year.
But steel and energy industry leaders urged more haste.
In Australia, nine-fold increases to wind and solar electricity generation capacity are required by 2050 to meet net-zero demands.
Energy equipment giant Vestas expects international demand for wind turbines to outstrip supply by 2025, when Australia's first offshore wind farms will still be in the planning queue.
"Even if you want a turbine, you might not be able to get it," Vestas executive Fredrik Andren-Sandburg said.
A research report by the independent Centre for Work released at the summit rejects the claim the federal government cannot afford to match the scale of the US subsidies and tax credits.
Adjusted for the scale of the Australian economy, up to $138 billion in fiscal supports for renewable energy-related manufacturing is needed - and doable - over the next decade, according to co-authors Jim Stanford and Charlie Joyce.
Australia's footprint is mostly limited to the bottom of the value chain - extraction and shipping rocks - they said.
The government has plans to value add to get more out of the country's rich endowment of in-demand minerals.
"Australia's critical minerals strategy? Lovely words but $500 million doesn't cut it," energy finance expert Tim Buckley said.
American economist Adam Hersh said the future of manufacturing in Australia extended well beyond batteries for electric cars as part of the Biden administration's "like-minded club".
"What brings me here is the climate crisis and the imperative for renewable energy," Dr Hersh told AAP.
"It's not all about the US sucking up the resources in manufacturing from the rest of the world."
Australian Associated Press
