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The Sustainable Hour no. 514 | Transcript | Podcast notes
Our guest in The Sustainable Hour no. 514 is energy analyst Tim Buckley who is known for his expertise in energy finance and the transition to renewable energy.
Tim Buckley is the Director of Climate Energy Finance, an organisation dedicated to accelerating the transition from fossil fuels to clean energy. His work primarily involves analysing and advising on the economic and financial implications of energy policies and market trends, particularly those related to renewable energy and climate change.
Tim has just returned from a research trip to China, which is leading the world in renewable energy and decarbonisation efforts, while Australia lags behind. China is focused on reducing emissions in the power sector, steel production, cement industry, and aluminum sector through recycling and green technologies.
Tim is a frequent commentator in the media, providing insights on energy markets and advocating for sustainable energy solutions. His research and analysis have been influential in shaping energy policies and investment strategies in Australia and beyond.
Tim has extensive experience in the financial sector, having spent over two decades in various roles including as a managing director at Citigroup, where he focused on equity research and investment analysis.
→ You can follow Tim Buckley on Linkedin.com
→ Tim Buckley was guest on The Sustainble Hour in April 2020, August 2017, April 2017, May 2016, and August 2014
“Let’s reform our government. Let’s vote for members of parliament that actually act and accept the climate crisis and want to act on it and want Australia to help China, Japan, Korea and India decarbonise their economy at record speed, we should partner with them, not attack them, not bash them, not criticise them, partner with them.”
~ Tim Buckley, Director, Climate Energy Finance
→ Subscribe to The Sustainable Hour podcast via Apple Podcasts
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We at The Sustainable Hour would like to pay our respect to the traditional custodians of the land on which we
are broadcasting, the Wathaurong People, and pay our respect to their elders, past, present and future.
The traditional owners lived in harmony with the land. They nurtured it and thrived in often harsh conditions for millennia before they were invaded. Their land was then stolen from them – it wasn’t ceded. It is becoming more and more obvious that, if we are to survive the climate emergency we are facing, we have much to learn from their land management practices.
Our battle for climate justice won’t be won until our First Nations brothers and sisters have their true justice. When we talk about the future, it means extending our respect to those children not yet born, the generations of the future – remembering the old saying that, “We do not inherit the Earth from our ancestors. We borrow it from our children.”
The decisions currently being made around Australia to ignore the climate emergency are being made by those who won’t be around by the time the worst effects hit home. How disrespectful and unfair is that?
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United Nations: Call to action on extreme heat
On Monday 22 July 2024, the Earth experienced its warmest day in recent history, according to the Copernicus Climate Change Service. On that day, the daily global average temperature reached 17.15°C (62.87°F), an increase from the previous record of 17.09°C (62.76°F) set just the day prior, on 21 July 2024. All this extra heat is wreaking havoc on the planet.
The UN Secretary-General’s Call to Action on Extreme Heat brings together the diverse expertise and perspectives of ten specialized UN entities (FAO, ILO, OCHA, UNDRR, UNEP, UNESCO, UN-Habitat, UNICEF, WHO, WMO) in a first-of-its-kind joint product, underscoring the multi-sectoral impacts of extreme heat.
Earth is becoming hotter and more dangerous for everyone, everywhere. Billions of people around the world are wilting under increasingly severe heatwaves driven largely by a fossil-fuel charged, human-induced climate crisis. Extreme heat is tearing through economies, widening inequalities, undermining the Sustainable Development Goals, and killing people.
The Call for Action calls for an urgent and concerted effort to enhance international cooperation to address extreme heat in four critical areas: Caring for the vulnerable – Protecting workers – Boosting resilience of economies and societies using data and science – Limiting temperature rise to 1.5°C by phasing out fossil fuels and scaling up investment in renewable energy.
“The balance of the polling suggests that people actually support moving forward with renewables becoming an even larger share of our energy source.”
~ Daniel Mulino, Labor MP
→ Sky News – 31 July 2024:
Polling reveals Australians ‘support moving forward with renewables’: Labor MP
“Labor MP Daniel Mulino says polling has revealed a majority of Australians are open to implementing more renewable energy into the power grid.”
→ Pearls and Irritations, John Menadue’s Public Policy Journal – 25 July 2024:
The Albanese government has created a climate vacuum, and we will pay the price
“What happened in 2011 with the happy-clappy “Clean energy futures” campaign? Public support fell, because the government tried to sell the answer without elaborating the problem. Now another Labor government is going down the same path.”
→ Report by Local Governments for Sustainability:
‘Climate Emergency Finance – a Call to Action’
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Transcript of The Sustainable Hour no. 514
Antonio Guterres, United Nations Secretary-General:
Earth is becoming hotter and more dangerous for everyone, everywhere. It’s a time for transformation.
Jingle:
The Sustainable Hour. For a green, clean, sustainable Geelong: The Sustainable Hour.
Anthony Gleeson:
Welcome to The Sustainable Hour. We’d like to acknowledge that we’re broadcasting from the land of Wadawurrung people. We pay tribute to the elders – past, present, and those that earn that great honour in the future. We’re broadcasting from stolen land, land that was never ceded, always was and always will be First Nations land. We have a great debt of gratitude for the ancient wisdom that they’ve honed from nurturing both their land and their communities for millennia before their land was stolen. And in that ancient wisdom lie so many of the answers that we need as we navigate the climate crisis.
Mik Aidt:
Two-thirds of young Australians experience eco-anxiety. That’s the recent research coming out from Orygen Institute, Australia’s leading youth mental health think tank. They found that 67 per cent of young Australians in the age between 16 and 25 reported that climate concerns negatively impact their mental health. And 76 per cent of these young Australians expressed concern about climate change. A significant number of them stating that their concerns have increased over the last years.
Mission Australia has also highlighted the environment as the top issue for young Australians. In their annual youth survey, the environment consistently ranks as the number one concern for young people. Anxiety and distress related to climate change and environmental degradation is growing among the youth. And does this matter for anyone?
This is the generation that’s going to build the future Australia. And they have every reason to be distressed and feeling anxiety when we have a government, the Labor government in Canberra, that keeps approving new co-projects and even defending in court that they don’t have a duty of care to consider the future of young people when they consider whether or not to allow another fossil fuel project to be started.
And they have just approved new gas exploration permits in the waters off the coast of South Australia, Victoria and Tasmania. While at the same time they’re handing over $14.5 billion over the last year in subsidies to the fossil fuel producers. That’s a jump up 31 per cent. Is that supposed to be acting on climate? Which was their election promise? The young people are right. The young people get it. And I believe we’ll see at the next election, which is coming soon, a big change in politics. It’s time for a real shakeup and it’s coming.
We’ll be talking more about that in another Sustainable Hour, because today we have a plan to focus on energy. But before we kick off, first let’s hear what’s been happening around the world. Over to Colin Mockett OAM, who’s got the global outlook for us.
Colin Mockett’s Global Outlook:
Hello, Mik. Well, look, I think what you’ve just done is neatly outline the structure that the fossil fuel industry has built for the way that we work as a government in Australia. But my roundup for this week begins in the Philippines, where a tanker carrying 1.4 million liters of industrial fuel capsised and sank off Manila a week ago. Despite local authorities struggling to contain the spill, an oil slick some 8 kilometres long has spread around the area where the empty Terra Nova sank in Manila Bay.
The incident both captures and symbolises the current problems posed by fossil fuels today. The vessel sank after unusual climate change related weather. Heavy rains fueled by Typhoon Gamy and unseasonable monsoons last Manila and its surrounding regions. All of them are blamed on climate change caused by burning fossil fuels. Now a large quantity of unburned fossil fuels is causing the local fishing industry to… well, it can’t work, it’s shut down. And the sunken ship is still leaking its toxic cargo.
Meanwhile, in Europe, it was announced that the record for the world’s hottest day has tumbled twice in one week. Now that’s according to the European climate change service Copernicus. That week was the week before just prior to the Olympics beginning in Paris.
On the previous Monday before the Olympics, the global average surface air temperature reached 1.71°C, breaking the record of 17.09°C set on Sunday. That beats the record set in July 2023, and the scientists have warned that records could still fall again during this northern summer.
Many of the parts of the world are experiencing powerful heat waves, including the Mediterranean, Russia and Canada. There are hundreds of out of control bushfires in Northern California, Canada and Russia. There are more than a hundred fires in the US, more than a hundred and twenty in Canada and scores in Russia. We don’t know the exact number.
Professor Rebecca Emerton, who is the climate scientist at Copernicus, who put out this report said about the current heat waves, while fluctuations are to be expected as the climate continues to warm, we are likely to keep seeing records being broken and each new record is taking us further into uncharted territory. China has also issued current heat alerts with central and northwestern areas of the country recording temperatures higher than 40 degrees, while Siberia, Spain and Greece are also enduring days of ultra-high temperatures. ‘The global average temperature usually peaks in July or August, during summer in the Northern Hemisphere,’ Professor Emerton said.
The Northern Hemisphere has large land masses like the U.S., Europe and Russia that warm up faster than the oceans that dominate us in the Southern Hemisphere.
The recent sudden rise in world temperatures is also down to significantly above average temperatures over large parts of Antarctica,” she added. Meanwhile, the World Health Organization released a report saying that worldwide, between the years 2000 and 2019, almost half a million heat-related deaths occurred every year.
‘The hottest day record has been broken once again because the world continues to burn huge amounts of oil, gas and coal,’ said Frederica Otto, senior lecturer of climate sciences at Grantham Institute of Imperial College London. Every broken record is a warning that our climate is heating to dangerous levels. These warnings are becoming much more frequent.
‘However, we have all of the tools, technology and knowledge to stop things from getting worse. It’s replace fossil fuels with renewable energy and get emissions down to net zero as quickly as possible,’ she said.
Now to Ethiopia, where at least 220 people died in landslides caused by recent heavy rainfalls. The region has been battered by heavy rains that caused flooding while other parts of the country are still locked in a severe drought. The UN reported that millions in the country face malnutrition due to climate-related conditions.
And finally, the Global Energy Monitor released a paper at the weekend stating that China now has twice as much solar and wind under construction as the whole of the rest of the world combined. It works out eight times as much as the USA. It also points out the significance of China becoming the world’s first electro state in terms of its already huge export markets. This caused some panic in both the EU and the USA at the inability of their car manufacturers to deal with their Chinese competitors, low priced electric vehicles.
And this in turn caused economists to predict that what is likely to be a world shift in industry, every nation’s economy and world politics. And that significant prediction ends my roundup for the week.
Jingle:
Listen to our Sustainable Hour – for the future.
Anthony Gleeson:
Okay, our guest today is Tim Buckley. Tim is a regular on the show. I think this is about the sixth time we’ve had him on – and always a wealth of information and insight about what’s happening on the energy finance front. So Tim, welcome! Thanks for coming back on!
Tim Buckley:
Tony, very much happy to be here and that was a beautiful welcome of country, thank you.
Anthony Gleeson:
Yeah, so Colin, a week or so ago in Global Outlook mentioned Australian delegation that went to China. And the figure that he came up with in that was an EV popped out every 36 seconds, I think. I just found that unbelievable. Tell me your response to the incredible things you saw over there.
Tim Buckley:
Brilliant. Thanks, Tony. Yeah, just to confirm, as Colin has already introduced, we know the climate scientists have been spot on, if anything.
They’re too conservative. And we also know climate anxiety is real and rising. But I would like to just share that there is cause for hope. As Colin said, China is moving really, really fast as a matter of strategic national priority.
And so we hear in a lot of the Western media very negative comments about what China is doing wrong. What we rarely get is a balanced perspective of what they are doing right.
And whether it is about their national strategic priorities, whether it’s about global market dominance, whether it’s about new investment, new employment prospects, whether it’s about export prospects, whether it’s about partnering with emerging markets and about climate resolutions, solutions, it’s about all of those factors. And
I would maybe start by saying self-interest is always a powerful, understandable motive. Most countries, every country works in national self-interest and China is totally not alone in that front. So it was, as you mentioned, real privilege for me to accompany 22 other Australians working in the clean tech sector, in the climate sector, to have over a week looking around the greater Shanghai region, and seeing some of the world’s most progressive and largest clean tech companies. We got to see about six factories.
The one you mentioned is actually Tesla’s factory in Shanghai. It’s the outside of Shanghai. We went by fast train everywhere. It was just a beautiful way to travel. I’ll mention that because it’s a hell of a lot better than traveling by plane. And the speed you go at is just blowing like we were traveling at 345 kilometres an hour. And so you do 600-700 kilometres in two hours, you get off refreshed, you literally… The train leaves perfectly on time – you can rock up… We rocked up 10 minutes before the train left because you know they’re to go on time. And so you have no cues, you just walk straight on and it’s still as is like it’s actually still stiller and quieter than any Australian train. And it’s refreshing way to travel – and it’s about China’s dominance.
I mentioned that because like China leads the world in almost all of these sectors. You know, going back to the Shanghai factory – Tesla’s factory is the biggest EV factory Tesla has built in the world. And that is in Shanghai. Any Tesla you see in Australia comes from Shanghai. And yeah, it was staggering to see them producing a new electric vehicle every 36 seconds
It was then staggering to then walk the next day into NIO, a Chinese startup. It’s only producing 100,000 EVs a year. It only started a year ago. But why do I mention NIO? It’s got the largest fast charging network in the world. Sorry, battery swap systems. So you literally, we watched these consumers just driving off the road. They would literally sit in their car, turn the engine off – the AI would then reverse the car in, swap the battery, not one worker involved whatsoever. The passengers or the driver just sits there in the car in comfort for three minutes and then they drive off with a fully charged vehicle. So range-anxiety will really be a thing of the past.
But part of the other reason I mentioned NIO, so NIO is leading the world in that battery swapping technology and what they’re also doing, their factory was only built in the last 12 months. So comparing it versus Tesla, and yet the automation in the Neo factory was just mind blowing. Like maybe a quarter or a fifth of the workers that Tesla had. And that’s how many robots and like all these robots driving around all over the factory, going and getting the parts, bringing them back, putting the bay there, another robot picks the piece, the part up every 30 seconds and drops it into place, welders it in and maybe a quarter of the workers that Tesla had in its factory.
Now, Tesla built that factory a whole four or five years ago. So it’s now out of date. Now, what’s Tesla doing? Right next door to where we were in the Tesla factory, they’re building an entire brand new greenfield battery factory for Tesla to supply battery energy storage systems for the whole of China.
And so that’ll be one of the biggest new battery manufacturing facilities being built Greenfield right next door. And that shows the confluence of the technology disruption of the transport sector and the power sector, because where we’ve seen batteries technologies improve unbelievably in the last five years for EVs that then spills over into the power sector. So we have ultra low cost solar.
And as any climate luddite knows, the sun sets predictably every day. But with batteries now being absolutely world scale, brilliant technology, like twice, three times as strong as powerful energy density, half the price of where they were even two years ago, then you can actually save the solar from the middle of the day, time shifted to the evening peak. And therefore you can have batteries will supply the evening peak in countries like Australia, America, China, India, and most of the world where it’s sunny, maybe not Northern Germany or Scotland or New Zealand for some big chunk of the year. They’ve got lots of wind though. But the batteries then provide a massive, massive transformation of the world’s power markets as well as the disruption of the transport market. So the idea that hydrogen fuel cells might be the transport power system of the future is now dead and buried. know electric vehicles have won that race.
We saw it with our own eyes in Shanghai at Tesla’s factory and at NEO’s factory. And it is amazing. China is something like 55 per cent of the world’s EV production and sales. And as of last year, they’re also the world’s largest automotive country exporter. They overtook Japan last year. They overtook Germany the year before. They’re now number one in the world.
So they’re exporting brilliant new technology, which is all about energy security. It’s all about decarbonisation. It’s all about getting off the addiction to oil, imported oil, high emissions, imported oil, and moving to electrification of everything. So again, as Colin mentioned, it’s a point that’s been lost on the West that China has gone from being very, very fossil fuel oriented, particularly oil imported oriented, to now having the highest electrification of any major economy in the world. And that is an ongoing program.
In other words, it’s all about moving from imported oil to electricity. And we know as Minister Bowen says in Australia, it’s actually quite straightforward to decarbonise your electricity sector. It’s harder to do other sectors. So as Saul Griffiths says all the time, let’s just electrify everything and then decarbonise as we electrify it. Quite staggering seeing what’s going on in China.
Mik Aidt:
So Tim, what do you think Australia looks like in that perspective?
Tim Buckley:
Well, we’re both a laggard, but also a potential leader. So the negative is, and I it’s worth just bearing in mind, it’s a really harsh word. We are a petro state, but you’ve got to know what you are before you can actually shift.
And we’re up there with Russia and Saudi Arabia. So anyone that thinks Australia is a great leading nation and we’re, yeah, okay. We’re also a petro state. We exported $220 billion of fossil fuels last year. The industry, multinationals mostly, tax avoiding multinationals, made about $150 billion gross profit last year. That is why we have entrenched delusion, disruption, denialism and delay on both sides of our major political parties. It’s really hard to break the addiction, but we have an enormous opportunity.
Colin Mockett:
Yeah, we’re not just a petro-state, Tim. We’re a petro-state that hasn’t in any way modernised. We’ve still got 19th century thinking about exporting coal and burning coal. But look, I’d like to get away from that you’ve been and seen the future. Can you see a way, first of all, can you see the new world order, how it’s going to roll out in the next 10, 15 years with the advancement of one sector? And I’d also like to add in there that Tesla, the factory that you saw, is an American factory using the communist system of working and existing, if you like. So it’s clearly moved out of political lines. Whereas the situation with climate change in Australia is all about politics. If you can get a huge multinational American company working hand in hand with the biggest communist country in the world, then clearly that’s a group that very much outside of our understanding of politics. So how can you see things working from here onwards?
Tim Buckley:
Colin, that’s a really important point. And for all that Elon Musk does a lot of really dumb things like backs Trump, he’s also, as you’re saying, working with the Chinese. And that is the lesson we should take as a nation that China is our number one trade export partner. They are 30 per cent all-Australian exports go to China, we need to treat them like a partner. And we need to actually show a little bit of respect because they are actually leading this global race to the top that we all have to do. And we can crowd in and support them and we can profit from them. It’s a win win. So I’ll just riff off what you’re saying, Colin, because I think it’s so important. We do need optimism, we do need hope. And I am actually more hopeful today than I’ve ever been.
Much as we are a petro state, the Albanese government is trying to decarbonise our domestic economy, even as they’re continuing to profit in our export economy. And so when Minister Bowen talks about getting to 82 per cent renewables by 2030, we might miss it by a year because of the climate wars reigniting, but we are actually making serious progress. We’re at 39per cent. So we’ve seen that double in the last five years. We’ve got to double it again in the next five years.
And then we’re at 82 per cent. And then the question becomes, how do you do the last 18 per cent? Now, I might put aside the last two or 4 per cent and say, how do we get to 95, 98 per cent? I think that’s really straightforward. Whereas five years ago, it was actually really problematic. And Oliver Yates at the Smart Energy Council a couple of weeks ago gave a presentation which I found really, really confronting and really inspiring.
Part of why I was pre-warm was I had a stand up argument at the back of the bus as we were driving to the Tesla factory with Oliver and I was arguing diversity is great and in most systems it is great and I was saying we need offshore wind, we need batteries, we need pumped hydro storage, we need interstate grid transmission, and Oliver’s going, ‘No!’ – in his usual way he just goes ‘no’ – ‘batteries have already won the race like they’ve won it in China. They’re wanting in terms of the firming of the power system of the future. And what he was saying, really, he actually presented that at the Smart Energy Council and just challenged the whole room to say, look, the deflation in battery pricing in the last two, three years, like 50 per cent or more reduction goes hand in hand with a 50 plus percent reduction in solar prices, which means that the firming of ultra cheap zero emission solar power is very, very price competitive today and it’s available at massive, massive scale, thanks to all the factories China and Korea are building right now.
And so you’ve actually got a massive, massive disruption. And so we are saying we really need to pivot our thinking from the out of date thinking of two years ago, right? Not 20 years ago, two years.
Now, Oliver Yates, anyone that doesn’t know him, is the founding CEO of the Clean Energy Finance Corporation. He’s been in the energy sector for decades. So he’s a real thought leader, but he was on the tour in China with me and we were looking at these battery factories, these e-fee factories. We went through one of the biggest, well, the biggest solar module manufacturing companies in the world factory, and it was literally spot the worker. There was so much robotics, there was no workers in the manufacturing line.
The workers do quality control because and and see ATL, the biggest battery company in the world, China, it’s got 38 per cent global market share didn’t exist 15 years ago. Now it’s the biggest in the world. And they literally record errors in their production process in the parts per billion. And so we face spot if a worker spots a problem, they stop the line because they actually don’t want to keep producing because they’re producing so bloody fast.
What Oliver was getting at was if you fast forward and solar, like we had the privilege of catching up with Professor Renata Regan and Professor Martin Green in Shanghai, because obviously the center of the world is Shanghai when it comes to solar and batteries and EVs. So of course they were there having dinner with 400 of their PhD students from the University of New South Wales. And so I had the privilege again of talking with Renata and Martin after I stopped drawing because I just admire both of them so much. They just… they’ve changed the world. Sorry, ‘draw’ maybe the wrong word. I mean, or of them, their generosity and contribution to mankind for the last 40 years is unbelievable.
So, you know, they were saying, ‘No, you haven’t seen anything yet. There’s another 20-30 per cent improvement in solar cell efficiency.’
And so I’m hearing a little bit of solar modules are now so dirt cheap that it doesn’t matter if they drop another 20 per cent in price because they’re already literally 10 cents a watt. They’ve come down from $8 a watt 10 years ago to 10 cents today, U.S. cents. But if you get a 20 or 30 per cent improvement in quality over the next five years, you get a 10, 20, 30 per cent improvement in the cost competitiveness of solar delivered because if you’re 30 per cent better technology efficiency, then you get a 30 per cent reduction in the balance of system costs. It’s just amazing.
Anthony Gleeson:
The positive energy that’s coming from you right now is just so palpable. We tend to hear so much negativity around the future, but you’ve seen the future and so excited about it.
Yeah, the only thing that’s stopping us at the moment is from being there and being part of that is the political will. I just want to go back. There are people that often say, that China is opening so many coal mines. Are you able to dispel that myth at all? Or what’s happening on the coal front in China?
Tim Buckley:
Yeah, Tony, it’s definitely not a myth. Let me dispel that comment. It is a quarter of the story, though. So the framing we hear from the Murdoch media is that it doesn’t matter what we do because China is still building a new coal plant every week, every two weeks.
They were last year, this year they’ve actually reduced the number of coal plants they’re building by about 30per cent. But it’s 100 per cent too many. But what they did do in the last six months is China installed 133 gigawatts of new wind and solar projects. So I’ll say that again: 133 gigawatts!
Just to put in context, Australia in the integrated system plan from the Australian energy market operator says by 2050, we are going to increase our wind and solar installs sixfold, 600 per cent by 2050, like 25 years from now. And China will have done that in six months. Sorry, I’ll remove the word. They might, they did. They did it in the last six months. So in six months they did what Minister Bowen wants Australia to do in the next 25 years. So there is no ‘if’ about it. They’ve already done it.
And by the way, solar and wind installs in China are up 25 per cent. Momentum slowed because last year they were growing at 100 per cent year on year. This year they’re only growing at 25 per cent. I’m being sarcastic. It’s just staggering the momentum of China.
Colin Mockett:
I’d like to add here too that, when you’re talking about history from two years ago, I’d like to take you back to the of ten years ago when Germany under Angela Merkel was building new coal-fired generators. again, the Murdoch press and all of the, I don’t know what you’d call them, the Murdoch press, we’ll just leave it at that, they said, well look, this is what’s happening. They’re building new coal-fired outfits in Germany. In truth, Angela Merkel shut down all of their nuclear generators. The coal-fired ones that she built at that time were interim measures, and now they’ve closed down because they’ve put in so much solar and wind, wind especially in Northern Europe. look, almost certainly the Chinese coal-fired power stations are interim measures and we’re supplying them and we’re going yippy yippy we’re making lots of money selling coal to China without realising that it’s going to finish within the next couple of decades because China is going to wean itself off of coal and onto renewables as have many other nations but they’re doing it faster.
Tim Buckley:
Colin, that’s right and maybe to going back to Tony’s question, why are they still building new coal? And I hesitate to say this because I don’t want the LNP Luddites or the National Party Luddites to misquote it, but they’re building really flexible, modern new coal-fired power plants in China right now. They’re building flexible coal because they know they have to manage an unbelievable two, 300 gigawatts of new wind and solar every year.
And that requires huge amounts of firming capacity. so they’re using coal. They don’t have gas peakers the way we do and the way America does. Although our gas peakers are unviable today because the gas cartel has pushed the price of gas in the Australian market up to five times what America pays. We in Australia, like the third largest fossil fuel exporter in the world, the third largest gas methane gas exporter in the world. we our domestic gas prices five times what it is in America. So bring on batteries because we can’t afford to use our own gas thanks to the cartel. But I’m doing my rant about the gas cartel gouging everyone in Australia. But there’s nothing like being gouged and abused to actually encourage the Australian people to move away from
So electrifying everything, installing batteries, buying EVs, having vehicle to grid charging, it’s all now absolutely doable thanks to China. And so China is using these flexible coal-fired power plants, but what they’re more focused on doing, like in the last six months, they built 18 gigawatts of flexible coal. They built 133 gigawatts of renewable energy. But what they’re also doing is building about 20 gigawatts per six months of new batteries. And that’s double what they installed the year before. And that’s double the year before that.
So they’re just building huge amounts of batteries. They’re building huge amounts of pump, hydro storage. They are spending about 70 billion U.S. dollars a year this year on new grid transmission. So up 25 per cent year on year, because you need a huge amount of grid transmission because China is a huge country like Australia is. They’ve got huge low population density in their West, but the population’s all in the East. So they’re having to build 1,500 kilometer grid connections. And so what they don’t want to do is build a grid connection and then just put solar down it for literally six hours a day, 25 per cent of the time. It’s windy six hours a day, that gets you up to 12 hours per day. They then want to put some pumped hydro storage down it they want to put batteries down it, but they’re using coal for the last 25per cent. So they get 100 per cent utilisation of their grid transmission, even as they accelerate.
So I’ll go back to the real positive aspect. Our forecast is that China will reach peak emissions this year. Now, maybe they actually achieved it last year. We don’t know history. You can only evaluate that statement. There is always going to be volatility. So our forecast is China will peak and then plateau emissions six years ahead of nationally determined contributions that they committed to in the Paris agreement. So they’re six years ahead of what they said that they would do. China likes to do and then say.
So I think it’s going to be a real landmark year for China. And I only really study the power sector. And I’m now doing a lot more work on steel, which I’ll come back to to answer Colin’s comment about the positive for Australia. But staying on the theme, we think that they will peak emissions in the power sector this year. Like year to date, coal power generation’s up 2per cent, renewable power generation’s up 18 per cent. And so you can see the growth. If they keep installing more renewable energy with every month, they’re gonna literally hit peak emissions. If they didn’t do it in April 2024, they’ll have done it sometime this calendar year. I’m pretty confident on that.
But what they’re also doing… Rio and BHP reckon that China peaked steel production two years ago. Now China produces 54 per cent of the world’s steel. and steel, it’s a horrible number. The Chinese steel industry has 1.8 billion tons a year of carbon emissions, but they might’ve peaked carbon emissions in steel two years ago. And what they’re talking about doing is a lot more scrap recycling and a lot more green iron in China over the next five, 10 years and a lot more electricity generation to power their steel mills. So building electric arc furnaces powered by renewable energy. And so we actually could see emissions in steel come down quite significantly. David Fickling of Bloomberg is a Sydney based Bloomberg opinion writer globally. He highlighted that the Chinese cement industry might have peaked emissions two or three or four years ago.
Because you might have heard that the Chinese property sector is collapsing. Now, not the economy. I’ll be very clear. The economy is growing at 5 per cent per annum. The property sector is coming off 30, 40, 50, 60 per cent for new starts. Now, that means a lot less steel, a lot less cement. And then they just put out a couple of weeks ago, China put out a aluminium sector emissions target, and they expect to reduce emissions in the next two years by 10, 20, 30 per cent. Same thing, moving to renewables, lot more scrap recycling.
So China is actually driving the world on recycling of batteries, aluminium, steel recycling. Why? Because they don’t want to be dependent on Australian raw material exports forever. And in fact, within 20 years, they won’t need a lot of our critical minerals because they’ll be recycling 95 per cent of all their batteries, and they’ll actually get all of that critical minerals they’ve already bought stored in the batteries and then reprocess. But I know that was a long rant, but to me, the biggest opportunity for Australia is all ahead of us.
And this is why we have to focus on the positivity for our economy. If we go from being exporting 980 million tons a year of iron ore to exporting say seven or 800 million tons of green iron every year, we will export embodied decarbonisation to our trade partners. We will build massive wind farms, massive solar farms using all of our low population density land mass up in the Pilbara and in Northern Territory and Queensland. And when we can export embodied decarbonisation. So we will go from exporting 125 billion a year of iron ore, zero value dig and ship iron ore to maybe exporting $250 dollars a year of low emissions green iron instead. So that is 125 billion uplift, which is a huge opportunity for Australia.
Mik Aidt:
What’s the Chinese view on nuclear?
Tim Buckley:
Yeah, it’s a really good question. And it’s again, subject, I’d call it misinformation. It’s not a half truth. It’s a 133 to one truth. Why? Because China in the last six months built 133 gigawatts of wind and solar, and they built 1.2 gigawatts of nuclear. Now, okay, before energy experts come in and shoot me down: Yes, nuclear in China runs about 75, 80 per cent of the time and wind and solar runs 25 per cent of the time. So they produce three times much more nuclear energy per gigawatt. So maybe the 133 to one is only 40 to one, but China, nuclear is a rounding error in China. They have, they are really committed to it. And I think one of the ironies of what Dutton is saying is, he wants to use the best technology in the world, I assume. Like he doesn’t want us to use 50 year old nuclear technology. He wants to use the fourth generation technology. There’s only one fourth generation nuclear power plant in the world. And you guessed it, it’s in China. So he’s proposing to use Chinese technology, even though he’s anti-China. It doesn’t, there’s no logic to it. It’s all just disinformation and outright lies and fact-free spin to get re-elected so that his fossil fuel proponents can make another decade or two of profits.
Jingle:
Scott Morrison:
This is coal. Don’t be afraid. Don’t be scared.
Senator Whitehouse:
At the heart of this conflict is a battle between truth and science and power and lies.
Anthony Gleeson:
Tim, it was interesting to hear your comments about recycling. Is that something that you see while you were there, see a real commitment towards?
Tim Buckley:
It’s actually part of the, we all know China is a planned economy. They have five year plans. I wish Australia had a five year plan. Albo is trying to introduce one. It’s called the Future Made in Australia. I’m 100 per cent behind that. I want it to be more ambitious and more aggressive, because we’ve got to seize this huge once in a century opportunity. But, yeah, China’s got a five year plan and a 10 year plan. And you see recycling and sustainable growth, small and beautiful.
You see strange comments, they’re very Chinese comments, but President Xi talks about small but beautiful. He talks about recycling. He talks about diversifying away from Australia. And that is why they are going hugely into recycling in steel, scrap steel, in aluminium and in batteries. But it’s not just China. Tesla, the chief technology officer of Tesla at the founding left about six years ago. He’s built the single biggest battery recycling plant in the world in America. It’s called Redwood Materials. It’s inspiring. It’s a it’s not a listed company, but they they put their details on on the web. So you have a read of Redwood Materials. So the biggest battery recycling plant in the world is already in operation in America.
And I rarely talk anything but negatives about Glencore. But Glencore is building the biggest battery recycling factory in Europe, as we speak now. Recycling is going to go through the roof. Logically, there is not going to be a scarcity of lithium and critical minerals in 20 years time. The IEA and every denier who quotes scarcity of raw materials for batteries is wrong. Yeah. Look, I’d like to move you on a little bit from there onto the aviation industry, You pointed out earlier on sensible and smooth and quiet the train services advanced. There are advanced high-speed trains all around the world except for Australia. But could you see a time when we would have high-speed trains at least linking all of our capital cities and using a lot less plane and aviation? Because aviation uses so much
Could you see a way that the aviation industry would move forward in say 40, 50 years time? Yes and no. When it comes to Australia, we are a very, very long way away from everywhere and we have a very low population density. So when I talk about China using fast trains, I can see that being eminently sensible in Europe. In fact, France, I think, banned short haulage planes because they got a good train system.
But Australia’s got a really low population density. So the logical place to do it is between Sydney and Melbourne and maybe Brisbane and Sydney. We know Barnaby Joyce was all for an inland railway system. It’s just pure speculation and idle gossip that he bought his country property to profit from the building of the inland railway system. I would never suggest that about Barnaby Joyce. And I would never suggest the National Party wants to actually do compulsory acquisition of farmers lands to build a railway line, even though, because we know he’s anti compulsory acquisition of farmland to build a grid transmission we need. Obviously he wouldn’t be inconsistent in his messaging.
But to me, the economics against fast trains in Australia, it’s always been challenged. Like try building a fast train 100 kilometres out of Sydney. I the price of land in Sydney is obscene. We’ve got all the constraints of national parks and water and got a beautiful city obviously where I live, but try building a massive new railway line, it’s going to cost you an arm and a leg. Now, we probably should do it, but we probably should have built it 10, 20, 50 years ago. It’s really problematic. Whereas China doesn’t have that problem. As we discussed, they’re a command and control economy. But even once they’ve built it, like the number of people, every single chair and every fast train I went on was full because they’ve actually got the population and they can just mandate, by the way, you’re not going to fly, you are going to catch a train.
And by the way, it’ll be twice as fast anyway. But what maybe going back to China, I probably got the China bug, but I was talking to an Australian who moved to China when he was 20 and now he’s 45, give or take, and he runs a Chinese based battery manufacturing company. So you think I’m bullish about batteries. He makes me look conservative, but I caught up with him and he was going, ‘Tim, we export our batteries by train.’ China… you might have all heard of the Belt Road Initiative. China proposed to build a railway line from Shanghai all the way to Germany. It’s operational. So he exports his batteries by train. He said it takes 18 days. I put it on on one end, it gets off at the other end. It doesn’t go by ship. It doesn’t go by plane. It goes by train. And so China has built this enormous railway lines all the way to Europe because they want to export all of their brilliant world leading technology to Europe. But what it also does is opens up all of the countries in between all the stans across as Bekistan and some of those countries are bigger than Australia by landmass, but they got a population of five million people. So and they got brilliant wind, those planes that Genghis Khan invaded a thousand years ago, that’s beautiful wind territory, beautiful solar territory. And if you’ve got a railway line, you might as well put power lines alongside the railway line and export power. So China’s all over it. So it could work in America. Although I think the number one product that’s carried on trains in America is coal, or it used to be five years ago. That’s right. Coal consumption in America is down 70 per cent in the last decade. So that number might be out of date, but we need to actually repurpose our trains, make them viable and make them fast. It’s going to be hard and costly for Australia, but should we be flying from Melbourne to Sydney? No, we should have a fast train.
Tim, you mentioned green iron. Can you explain or tell us what that looks like and why we don’t have it now? What do we need to do additionally to what we’re doing now to have a green?
Yeah, the LMP federally has made big song and dance of ‘Twiggy Forest got it wrong. Twiggy Forest has pulled out a hydrogen.’ He hasn’t. He’s actually consolidating and he’s reorienting. So the key phrase that Twiggy actually – or Twiggy’s lieutenants – announced last week a couple of weeks ago, they talked about scaling back their massive green hydrogen expectations globally because we know that there isn’t a ship in the world that can green hydrogen and there won’t be for another decade or two it freezes something like minus 250 degrees Celsius. It’s just unfathomable the technology innovation required to ship green hydrogen.
So what they are actually doing is pivoting back to their core business, which – last time I checked – Twiggy Forrest is the third largest exporter of iron ore in Australia. He now wants to export green iron to China, Japan and Korea. And that’s why he said the company a target of zero emissions, scope three, exported emissions by 2040.
Now, BHP says that’s impossible because you can’t tell China what to do. But Twiggy is proposing to work with steel partners who want to decarbonise rapidly. So if Australia moves from exporting unprocessed dig and ship iron ore, which is what we do today, 100 per cent of our iron ore is we shift to green iron, you can reduce the entire steel manufacturing supply chain globally, their emissions by 70 per cent.
And so think about… I’m definitely not a chemist, I’m a financier, but I’ll risk going into chemistry. Iron ore is FeO3 or Fe2O3. You know, there’s a couple of units of iron bonded with oxygen. And so what you do is you split the hydrogen in H2O, take the hydrogen and you use the H2 to bond with the O3 in the iron ore, that creates water as a by-product and you get the iron.
So I’m calling it green iron because the way you split the water, the H2O into hydrogen and oxygen, you release the oxygen in the atmosphere, you split it with electricity. And obviously if it’s gonna be green, it’s gonna be wind and solar powered. So that is what the hype about hydrogen’s about. Green hydrogen, is about splitting water into hydrogen and oxygen and that creates a energy and a chemical that can then bond with the oxygen in the iron ore so that we strip the oxygen out and we rather than shipping iron ore we ship green iron and so that is about 70 per cent of the emissions generated when we make steel but Australia’s got to be realistic about that if we don’t do then China is going to do it in Guinea and they’re going to do it in Brazil and they’re going to do it in Canada and they’re going to replace their reliance on Australian iron ore. And so if we don’t do this, threat to our single biggest export iron ore is very, very substantial. Like we could say our iron ore exports dropped by 50 per cent if we don’t solve this energy transformation opportunity.
Mik Aidt:
So Tim, having said all this, you mentioned this is a once in a century opportunity for Australia. So in brief and in short, how do we make it happen with all the politics that’s going on and everything?
Tim Buckley:
I think it’s actually quite clear. And as you guys know, I’m a supporter of the Teals, but the Albanese government is showing a little bit of courage and spine and they’ve articulated a vision for Australia – need to double down and go twice as fast, but the ‘Future Made in Australia’ needs to then have an export orientation as well. We can be exporting decarbonisation, embodied decarbonisation in all of our exports.
Green iron rather than iron ore. Green aluminium rather than aluminium. Rather than exporting bauxite, we can process it into aluminium, green aluminium, export that. And so this is massive value uplift for our country.
We can do lithium hydroxide rather than lithium spodumene. We could add hundreds of billions of dollars a year to our commodity exports and export our brilliant world leading renewables. That is the competitive advantage. And so I am all about let’s reform our government. Let’s vote for members of parliament that actually act and accept the climate crisis and want to act on it and want Australia to help China, Japan, Korea and India decarbonise their economy at record speed, we should partner with them, not attack them, not bash them, not criticise them, partner with them.
Colin Mockett:
That’s brilliant. And that’s a wonderful note to leave on, Tim. But I don’t want you to leave and think, look, I’ve finished now because there’s so many outstanding threads that are left. So can I now invite you back at the next time that you can make it? Because I’d like to carry on this conversation in many different directions. But in the meantime, it’s been great to talk to you again today. Thank you.
Tim Buckley:
Thanks, Colin. Really appreciate being here and happy to do it again, because we are nowhere near winning this race. We’ve barely even got our shoes on and China is a decade ahead of us. We need to remind every single politician in Australia, state, federal and at the local level, that this is a huge opportunity for us as a climate crisis that’s an existential threat but it’s also a massive opportunity for our economy.
We’ve got to get out of the historic thinking and move forward and let Australia play a world leading role and let us work with China because China is leading the world. There are going to be thousands, tens of thousands, hundreds of thousands of jobs. If we stop being a dig and ship country and we start being exporting embodied decarbonisation, there are hundreds of thousands of new jobs for our children.
Mik Aidt:
If we were to boil everything you’ve said in this hour down to maybe one or two words, what would your ‘be’ word be?
Tim Buckley:
Be energised. The optimism. We need everyone to pile in. We need to be energised and we need to be optimistic.
Colin Mockett:
Be energised. I’ll go with that.
SONG
Michael Franti: ‘Brighter Day’
Antonio Guterres:
Ever more fierce hurricanes, floods, droughts, wildfires, rising sea levels, and the list goes on. To tackle all these symptoms, we need to fight the disease. And the disease is the madness of incinerating our only home. The disease is the addiction to fossil fuels. The disease is climate inaction. And leaders across the board must wake up and step up.
And that means governments, especially G20 countries, as well as the private sector, cities and regions acting as though our future depends on it because it does. All countries must deliver by next year nationally determined contributions or national climate action plans aligned to limiting global temperature rise to 1.5° degrees Celsius. The International Energy Agency has shown that fossil fuel expansion and new coal plants are inconsistent with meeting that limit.
I must call out the flood of fossil fuel expansion we are seeing in some of the world’s wealthiest countries. In signing such a surge of new oil and gas licenses, they are signing away our future. The leadership of those with the greatest capabilities and capacities is essential.
Countries must phase out fossil fuels fast and fairly. They must end nuclear projects. The G20 must shift fossil fuel subsidies to renewables and to the support of vulnerable countries and communities. And national climate action plans must show how each country will contribute to the global goals agreed at COP28 to triple the world’s renewables capacity and end deforestation by 2030. And they must also cut global consumption and production of fossil fuels by 30 per cent in the same time frame. And we need similar 1.5°C-aligned transition plans from businesses, the financial sector, cities and regions, following the recommendations of my high-level expert group on net zero.
The message is clear. The heat is on. Extreme heat is having an extreme impact on people and planets. The world must rise to the challenge of rising temperatures. And I thank you.
The Majority Project social media video:
Hello? This is an emergency. Excuse me, hello? Hello? Hello? Hello? Hello? Hi. This is something that’s really fucking important. Can you please listen to me? This is an emergency! Oi! Looks like no one’s listening.
No, no one has been listening. That’s a big part of this emergency. Okay, so what are you trying to say?
Thank you. I’m just saying that this climate situation is really, really scary. I mean, the world’s getting hotter, people are dying, governments are like, whatever! Even though we know that it’s way worse than governments will ever admit, we still go on with our days… like, time is up. We are deep in the danger zone now. Okay? What am I meant to do? Go out and glue myself to the M25?
You could, but the good news is you don’t need to. Across the country there’s people like you and me already getting together to really get effective climate action happening. We really need you.
Really? I can make a difference.
Yes, you’re already doing it by starting this conversation.
Are you in?
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