We are all on a journey towards a low-carbon future. Many opportunities exist for bilateral and regional cooperation on tackling the collective challenge of reducing global emissions to combat climate change.

With the world’s most populous and fastest-growing economies, the Asia-Pacific region emits the largest volume of greenhouse gases, producing about half the world’s carbon dioxide. At the recent 2022 Asia-Pacific Economic Cooperation (APEC) Summit, President Xi Jinping outlined China’s desire to enhance decarbonisation cooperation with regional partners to protect the environment and promote green lifestyles for everyone. China has an important role to play in achieving global net zero.

China is leading the way in a number of areas of the global decarbonisation and energy transition. It is adding more renewables annually than Europe, India and the United States combined. At the same time, global efforts are being made to invest in new manufacturing technologies and build critical mineral supply chains. This will also provide new opportunities for China.

Climate Change is a Common Challenge

Most countries now have climate goals in place. In 2022, the Australian Government set a new target to reduce greenhouse gas emissions by 43% below 2005 levels by 2030. This will put Australia on track to achieve zero emissions by 2050. The Australian Government introduced several initiatives including, an enhanced safeguards mechanism; upgrading the electricity grid to support more renewable electricity; and tax incentives to accelerate the adoption of electric vehicles. This is a significant step up in Australia’s ambition.

The Australian Government has made clear its vision for Australia, with abundant mineral resources and renewables potential, to become a clean energy superpower. To do this, policies have been adopted to foster innovation and incentivise investment to promote breakthroughs in technology, whilst also reducing emissions across all industry sectors. Australia will remain a reliable energy and resources supplier and investment partner beyond the transition.

The composition of Australia and China’s bilateral trade makes us ideally suited as partners to address the climate challenge. China is Australia’s largest two-way trading partner by far, and a significant source of investment. Mineral resources and energy trade is the bedrock of our trading relationship. But there is also much untapped potential.

China has an Important Role to Play in Supporting Global Decarbonisation

The Chinese government has also set its own historic carbon peaking and neutrality targets. It is committed to peaking carbon emissions before 2030 and achieving net-zero emissions by 2060. These are concrete steps in China’s carbon neutrality plan.

The Australian Embassy’s assessment is that, based on Beijing’s current policies and trajectory, China is on track to meet its 2030 target. But we predict that achieving the 2060 target will be much harder, as it will involve a substantial transformation of China’s industrial base.

China’s success in developing new clean energy supply chains puts it in a prime position to invest in new manufacturing globally to support the global transition to renewable energy. This has also driven down the cost of renewables globally.

China now has the largest carbon market and the largest clean electric power generation system in the world. Despite currently being the world’s largest coal consumer, China also leads the world in every zero-emissions technology. There is much for the whole world to gain from these innovations.

Opportunities for Future Collaboration

Low-carbon (energy) technology is now where the focus of governments, business and research sectors needs to be, for cooperation and innovation. China’s strengths in green technology and Australia’s renewable energy potential—underpinned by our energy and resources bilateral trade—can facilitate successful partnerships.

Our two governments attach great importance to addressing climate change. Following Australian Foreign Minister Penny Wong’s successful visit to Beijing in December 2022, Australia and China agreed to resume dialogue on climate change as a bilateral priority. We intend to build on these discussions with a view to promoting practical outcomes that will make a difference. Our two countries are well positioned to engage in such work and make this kind of progress. Not only at the government level, but also in business and research partnerships.

New Manufacturing and Clean Energy Supply Chains

Like China, Australia has significant natural resources with huge potential in solar and wind power, as well as significant potential to develop clean energy products such as green hydrogen. Our complementary economies have much to gain by facilitating and supporting the innovation required to tap into these strengths. This will help contribute to energy and resources security for our two countries and the world as a whole.

Australia’s significant natural resources also include critical minerals, which will play an important role in global decarbonisation efforts. Australia has many of the mineral elements the world needs to make advanced technology like solar panels, batteries and electric vehicles. Australia is the world’s top producer of lithium, rutile and the second largest producer of zircon and rare earth elements.

China is playing a key role in the global clean energy transition. It has already made a significant contribution to Australia’s energy market. This started with the supply of solar and wind systems. More recently, China became the leading supplier of battery electric vehicles in the Australian market, growing at 50% per year from a low base. Australian consumers are looking forward to more models coming to market in 2023.

Technology Sharing

China has the technology and investment power to make progress in clean power generation and supporting infrastructure upgrades. Australia’s renewable energy industry is ripe for collaboration, with a strongly skilled workforce and business executives already pivoting in this direction. Australia’s energy market has begun the transition—one in every three residential buildings now has solar panels. In the past five years, the proportion of Australia’s electricity that comes from renewables has almost doubled, from 16.9% in 2017 to 32.5% in 2022. But a lot more needs to be done. Australia has a target of 82% renewable electricity by 2030, a substantial increase from the current level of one third.

Industry Research Collaboration

Our region can benefit from improved low-carbon industrial processes. Supply chains for clean energy technologies such as solar cells, batteries and hydrogen, improved energy and industrial efficiency and fuel switching are aimed at preventing the creation of emissions. Carbon capture, utilisation and storage (CCUS) complements the transition by addressing emissions that currently cannot otherwise be abated, including from industrial processes like steel or cement manufacturing.

China has signalled a strong desire to work with partners to find solutions to combat climate change. By seizing the opportunities before us through bilateral and regional collaboration, we can find ways to accelerate the transition to net zero. A multi-faceted approach is critical for achieving optimal low-carbon outcomes and leveraging innovation to mitigate global climate change. As we all continue on the low-carbon journey together, there will be opportunities and rewards for all. In so doing, we give ourselves a better chance to save the world.