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The Australian chemistry industry welcomes measures to secure reliable energy - 15 March 2017

The Australian chemistry industry has welcomed action by Prime Minister Turnbull to meet with energy producers to directly address Australia’s gas energy crisis.

Chemistry Australia CEO Samantha Read said, “We are encouraged by outcomes from the meeting. It’s now crucial that non-partisan agreement can be reached, together with cooperation from industry, to ensure communities and business get the gas we all need to function.”

“The industry has been warning of the emerging crisis for four years. In 2014, the Deloitte Access Economics Report forecast losses of $118 billion in manufacturing output and 14,500 jobs between 2014 and 2021 in net present value terms. The crisis is now materialising. It’s here and now. This is an unacceptable situation considering our significant advantage in natural resource reserves.

“We are hearing reports of businesses in the industry scaling back or closing significant Australian operations because of the price increases and lack of availability of gas. These operations are not disappearing; they are moving to other markets with more favourable conditions for investment, where gas supply is more reliable and pricing is more affordable.

“This not only represents the immediate impact in job losses and reduced GDP; it also represents lost opportunity. That lost opportunity becomes an intergenerational loss in investment, jobs and innovation. Value chains are eroded, and Australia’s economic complexity suffers.

“The Australian chemistry industry supplies inputs to 109 of Australia’s 111 industries, so this has flow on effects right through Australia’s economy. And investments in this industry are long-term, so decisions made today impact over 30 years.

“Chemistry Australia has been very active in developing initiatives to promote stronger collaboration between industry and research, to improve our innovation ecosystems and rates of commercialisation and help Australia compete. To be frank, this is all academic if we can’t get the basics right. There is no innovation without energy.

“Gas is particularly essential to the business of chemistry, it’s important for process energy. It is also an essential and non-substitutable feedstock for advanced manufacturing.

“The Australian chemistry industry uses 10% of Australia’s domestic gas for its molecular properties to create a huge range of products essential to our everyday lives. These include fertilisers for our crops; cleaning products for health and hygiene in our homes and hospitals, and smart packaging to keep our food fresher for longer.

“The Government’s seven-point plan is a welcome step towards energy and feedstock security. The long-term solution is to bring on new supply, from more suppliers, into a well-functioning market. We support the ACCC’s recommendation for a case by case assessment for gas exploration, to ensure the responsible development of gas reserves. States need to urgently reassess their moratoria,” said Ms Read.


Media contacts:
Krista Imberger – [email protected] or 0439 318 290
Claire Selby – [email protected] or 0448 028 876

Chemistry Australia is the national voice for the strategically significant $40 billion Australian chemistry industry, one of the largest manufacturing sectors in the country. The industry employs more than 60,000 people and contributes more than $11.6 billion to GDP in industry value add. Ranging in size from small family-owned businesses to national and multi-national enterprises, Chemistry Australia members include chemicals manufacturers, importers and distributors, logistics and supply chain partners, raw material suppliers, plastics fabricators and compounders, chemicals and plastics recyclers and service providers to the industry.


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