Immersing yourself in the transition to a decarbonised economy

Over the past year, I think people have seen the opportunity of the transition to a decarbonised economy and they have continued to invest in business opportunities around this in both the Australian and global economies. This has happened on a range of fronts both in the mining and energy industries.?

Companies are targeting the materials that are required for a decarbonised economy and there is an understanding amongst mining companies that a decarbonised world still needs specific sorts of minerals and that's the opportunity for them.?

One thing we’ve seen since the last Energy and Resources Law Conference is that the fortunes of lithium companies have changed very significantly. In many cases, they’ve become very substantially market capitalised companies and have assumed a presence in the market that they didn’t have previously. They’re the current market darlings for mergers and acquisition activity.

We’ve also seen the Commonwealth Government identify that critical minerals are strategically important to Australia and have created policy and put real resources into creating practical outcomes for critical minerals companies. Though the Government would have been working on these policies for a lot longer, it’s fair to say that it's only over the last year that the rubber has hit the road. For example, they’re trying to develop potential customers for the products that Australian critical minerals companies produce and also encouraging the development of critical minerals projects generally in Australia. They’re not just trying to progress projects but also diversifying the supply for customers of those projects.?

In terms of challenges as we move towards a decarbonised economy, the single biggest challenge for energy companies is policy uncertainty. We don't have all of the policies in place for the energy transition and you can't just carry on as we are and expect to transition to a net zero economy.?

There is also investment uncertainty. A roadmap was laid out by the regulator, AEMO, for what's necessary to invest in energy infrastructure in order to achieve a decarbonised economy. These recommendations were made a couple of years ago and they haven't been implemented. Companies need to know how we get there. What will we do in terms of connecting the grid? How should we invest in transmission lines? How will the regulations for the energy grid change? The work of the Government has yet to play out in terms of the broad legal framework encouraging people into low carbon energy and clarity on where the investment will come from.

For the mining industry, the challenge is understanding what it means to be sustainable as an extractive industry. Many mining activities are high energy - they’ve got crushers and other processes for primary processing of materials and it’s hard for existing projects to switch. Often they’ve made a huge investment to start their project and it’s been planned on the basis of ensuring the project delivers the returns expected. So, if they haven't already got a decarbonised solution for energy then switching is very challenging and the motivations to switch without a strong regulatory backing like a carbon tax or a trading system are not necessarily there. New projects, however, have opportunities to look at renewable sources, like solar, particularly in remote environments that are not necessarily connected to the main grid. In any event, having solar and a battery that can serve the mine's needs is the opportunity and we are seeing mining companies with new projects looking at that.

There is a lot of detail in the energy transition and things like the Energy and Resources Law Conference is an unparalleled chance to immerse and educate yourself on things that are relevant to you. I’ve been attending these conferences for over 15 years and it’s always been a great opportunity to hear from peers and senior people in the industry on topics that are most relevant at a moment in time. Personally, I’m looking forward to hearing the panel session about moving to a low carbon economy and the practical challenges for energy transition. It's a long session with a number of panellists that will bring perspective from lawyers and other industry participants on the issues they’re facing at the moment. Other sessions I’m looking forward to include those that look at emerging technologies and sustainable financing, issues that are core to the transition of the industry to a more sustainable future.

Having attended many of the Energy and Resources Law Conferences in the past, I don’t think there is anything else like it for lawyers involved in the energy or mining industries. I encourage you to come along as I think this one's going to be a cracker.