Australia and the US have announced a bilateral agreement to collaborate on legislation to aid the green energy transition in both countries with a new compact. The Climate, Critical Minerals, and Clean Energy Transformation Compact will see the two countries adopt shared energy goals and policies. This will in effect allow Australian green businesses to benefit from subsidies and protections provided to US companies under the Inflation Reduction Act.
In a joint statement, the Australian Prime Minister and the US President said that they will establish a joint forum in order to set the compact’s agenda. With the compact, Australia and the US aim to accelerate the proliferation of green energy supply chains, invest in novel battery technologies, and support the development of green hydrogen technologies.
Earlier this month, Australia announced a $1.4 billion fund to aid the growth of green hydrogen technology in the country. Through the newly established Australia-United States Taskforce on Critical Minerals, the two countries will work together to expand global access to minerals such as lithium, which will expedite the global energy transition.
REGlobal’s Views: The recent upheavals in commodity and energy markets have raised new concerns around supply chains of critical minerals required for energy transition. As reserves for most of the rare earth metals and critical minerals are concentrated in just a few countries, more such bilateral agreements can be expected in the near future.