Pre-budget LNG and diesel rebate tax reform & The Green Metal Statecraft report

Highlights – The SEC Sydney conference

• Brilliant to see a full house standing room only for Minister Bowen’s talk.
• Great to have >8000 attendees to the wider trade hall and >100 speakers over two days in up to 8 theatres concurrently. So many people pulling in the right direction, reinvigorating.

Highlights – Fuel Tax Credit reform

• Whilst the Albanese government has ruled out FTC reform in next TUES budget, it is still a campaign CEF and our allies are working extensively on, maybe for MYEFO Dec’2026.
• Brilliant to see Twiggy, Chair of FMG, give a SEC keynote speech, and more than half of it was on the need for FTC reform starting in the mining sector. FMG is busy funding an ad campaign to elevate the topic and inform voters. Twiggy’s slide deck was mostly leveraging my CEF colleague Matt Pollard’s number crunching and work.

Highlights – The Cheaper Home Batteries Program and Accelerating capital deployments

• Almost every presenter at the SEC conference talked about the brilliant milestone of >10GWh combined across 380,000 new home battery installs in just 10 months.
• April 2026 was a record high, showing how much capital and skills can be deployed at speed and scale when the policy / economics are aligned.
• Treasurer Chalmers has allocated $7.2bn for the home battery scheme, and to-date $3.3bn has been deployed, including a $1bn in the month of April. Nothing like a single program in a single month deploying $1bn to kick up the momentum.
• CEF & Greenhouse are tracking budget and capital deployments in cleantech, decarbonisation, electrification and green metal value-add exports and since the start of 2023, an additional $90bn has been put on the table - $82bn federally and $8bn collectively from the states. This $8bn was bumped up nicely last week with the WA Government putting a $1.4bn Clean Energy Fund into the WA State Budget.
• We have tracked in CY2025 deployments of some $15bn, and in the first 4 months of 2026, we have tracked another $6bn (an $18bn run-rate). CCF and ARIA had been running campaigns to push the governments to accelerate the speed and scale of capital deployments, and we are seeing progress. From 1 July 2026 the new $5bn Net Zero Fund opens its doors, so there is capacity building. But good to see momentum improving.

Highlights – More RE share => lower energy prices

• AEMO QED report highlighted RE share in 1QCY2026 was 46%, after the record high 50% share seen in 4QCY2025. So we are making progress. We also saw reports the installed utility scale BESS capacity will treble in the next 1-2 years, making grid reliability better, and now batteries are the #1 price setting technology in the NEM, diluting the power of gas peakers in setting high prices at times of high demand. BESS => deflation
• And also worth thinking about the contrast of 2026 vs 2022: in 2026, petrol prices are up 50% vs the start of this year, but domestic gas prices are down 20% vs the start of this year, and electricity prices are down 12% as well. Last time we had a fossil fuel industry war back in 2022 when Putin invaded Ukraine, petrol prices doubled, gas prices doubled and electricity prices trebled. Chalk and Cheese. The gas cartel is in check in 2026, and RE shares are much higher, giving proof to the fossil fuel vested interests lie that RE => higher energy prices. The opposite, we now understand fossil fuel prices are hyper inflationary.
• And energy independence is a new key theme to add in support of electrification and decarbonisation. We will win this fight, we just need to go twice as fast.

Lowlights

• The Albanese government has ruled out a 25% LNG export levy, very disappointing. The government has made “now is not the time” their mantra to show a lack of political will, using the excuse their #1 priority is to secure oil imports for Australia and they don’t have the capacity to do two things at once. Very poor form, but we can never under-estimate the power of the incumbent fossil fuel industry, their lobbyists and their corrupting donations.
• We did secure an East Coast Gas reservation of 20% of production from 1 July 2027. Good and bad, it helps reduce energy cost inflation for sure, but it also means the hurdle for electrification and decarbonisation is harder, given methane is cheaper.

Main Story – Our Clean Energy Finance Report: Green Metal Statecraft: Policy, Investment and Technology Trends in the Green Iron Evolution

https://climateenergyfinance.org/wp-content/uploads/2026/04/CEF_Green-Metal-Statecraft_-Policy-Investment-and-Technology-Trends-in-the-Green-Iron-Evolution.pdf

• The decarbonisation and electrification of the global iron and steel industry is undergoing a structural recalibration, shifting from a period of speculative optimism on the now deflated hype regarding the rapid deployment of GH2, and into a slower decarbonisation trajectory.
• This report provides qualitative update of the investment, technology and enabling policy trends that will underpin the transformation of the iron and steel value chain.
• In aggregate the global sector is advancing unevenly, haltingly, sporadically and at a pace that remains deeply misaligned with the speed and breadth of decarbonisation of the sector – which contributes 7-9% of global emissions – demanded by the climate science.
• For every step forward on an individual project or market-level, the broader investment pipeline showcases an equivalent case study of project delay, cancellation, and restructure in the face of unresolved structural headwinds.
• Despite tens of billions in state aid, a strengthening carbon pricing mechanism, and supply-side and demand-side market forming mechanisms in the EU, the European investment pipeline has undergone a significant contraction in recent years. The investment trends, or lack thereof, of proposals progressing towards FID in Europe are indicative of structural headwinds. European electricity prices, even prior to the last two energy crises, remain 2-3x that of the US and domestic methane gas costs are 5x that of the US, and a similar order of magnitude higher than the rapidly emerging competing iron reduction region of the Middle East and North Africa (MENA).
• There remains a clear bankability gap for near-zero carbon routes for iron and steel production.
• Across both the EU and China, deep decarbonisation means a structural shift away from coal-based production pathways in blast furnaces (BF) and basic oxygen furnaces (BOF). High upfront capital cost intensities, exposure to higher operating costs in electricity and renewable hydrogen – notwithstanding strong public capital support, decarbonising mature lower-emission pathways in hydrogen-based direct reduced iron (DRI) and EAF smelting face major bankability gaps.
• Despite the US war on Iran, the MENA region is emerging as a strategically important DRI production corridor, with significant methane-based DRI capacity operational, and the largest development pipeline of new gas-based capacity. MENA’s competitive advantages in lower-emissions iron and steel production extend further into near-zero emissions manufacturing with some of the world’s best renewable energy resources, low costs of capital and less stringent regulations and approvals processes than the EU. MENA’s geographic proximity to Europe, existing DRI infrastructure, and access to competitive renewable energy position the region as the most credible near-term supplier of lower-emission primary iron to Europe's growing need for decarbonised iron and steel.
• At the current pace of decarbonisation, demand for DRI is expected to grow by 50% over the coming decade to reach 224Mtpa by 2035.
• The day we released our report, the US saw a FOAK 1.9Mtpa hot DRI plant reach FID at US Steel, co-located with 4 EAFs. This US$1.9bn investment is despite Trump’s anti-decarbonisation agenda, the economics simply work. A big step forward, even in the US
• Globally, we have a long way to go. It is a race, and Australia needs to get into the race. Australia is half the worlds iron ore exports, whilst China is half the world’s steel production. So there is a massive opportunity for the two biggest countries globally in the steel supply chain to work constructively together. But if we don’t want to work with China, they will take their capital and capacities elsewhere.

What’s coming up?

• 12 May 2026 we have the Federal 2026 budget
• 27/28 May 2026 CEF will be attending the Hunter New Energy Symposium in Newcastle to talk about the progress in the Hunter Valley on practical advances in the energy transition as it is occurring there.