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Industry funds urge tax incentives to invest in energy transition

Mike Taylor4 December 2023
Money bag and hourglass

Industry superannuation funds are seeking the removal of regulatory barriers to clear the way for greater investment in energy transition projects.

The major industry funds, AustralianSuper, ART, CareSuper, Cbus, HESTA, Hostplus, Rest Super, UniSuper, noting that they represent around $1 trillion of industry super capital, and industry super fund-owned IFM Investors, are backing a blueprint which identifies policy solutions to help drive greater investment into energy transition.

The blueprint, Super-powering the energy transition, makes a series of recommendations for the Federal and State Governments which they argue could help enable investment that deliver returns and helps Australia achieve its net zero target faster.

The policy levers outlined in the blueprint include fast-tracking planning, expanding investment opportunities in transmission and a financial bridge to facilitate delivering risk-adjusted returns for fund members, while minimising costs to households, and the impact on local communities.

“These focus on a range of potential areas for investment and complement the recent expansion of the Commonwealth Government’s Capacity Investment Scheme, which is a significant and welcome contribution to improving investment certainty for renewable energy generation and storage,” the funds said.

They pointed to the fact that Governments including the US and UK and those in the EU were introducing incentives to attract investment in clean energy at scale.

As a result, capital from industry super funds is being directed to energy transition projects in jurisdictions where they can generate stronger risk-adjusted returns for the working people they represent. For example, IFM has signed a MoU with the UK government which includes an intention to invest A$20 billion in UK infrastructure by 2027, with a particular focus on the energy transition.

The Blueprint sets out three key areas of policy reform that could help scale up investment in the energy transition in Australia, while generating appropriate risk-adjusted returns for industry superannuation fund members, and include:

  • Transmission – roll out transmission lines to renewable energy zones by:
    • Enabling distribution network service providers, with the right performance, safety and workforce record, to deliver greenfield transmission projects.
    • Reducing the impact of new transmission infrastructure on consumers’ energy bills through concessional finance or availability payments for new projects
  • Batteries – accelerate investment in batteries by:
    • Delivering the expanded Capacity Investment Scheme and removing regulatory barriers to investment in community batteries.
  • Sustainable Aviation Fuel – develop a local sustainable aviation fuel industry by:
    • Introducing a production tax credit to help catalyse investment in a domestic industry
    • Establishing a sustainable aviation fuel certification framework
    • Developing a market which enables sustainable aviation fuel credits to be recognised and traded.

Accelerating superannuation investment into Australia’s energy transition has the potential to create jobs and avoid costs for households and communities.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Wildcat
2 months ago

Just remove the regulatory hurdles to molten salt nuclear reactors. No govt money needed, no new transmission lines, no batteries from child slave mines from the Congo.

They can’t melt down, nor blow up. Most of the waste is recycled and the half life is massively less than the heavy/light water current reactors.

They can be installed on current coal pwr station sites and literally plugged into the existing grid.

Grant concessions to private operators if the govt doesn’t want to pay. About half the cost of the nbn if it wants them in public hands. Will be way cheaper than undeveloped technology, esp in energy storage, more reliable and lower running costs.

The death rate from renewable technology in 10 years exceeds the death rate from nuclear waste storage since the human race started using nuclear power.

🤔

Has Shoes
2 months ago
Reply to  Wildcat

100% agree!

Remove the prohibition! Nuclear has gone a very long way since the “Rods in Water” technology.

100m x 200m footprint would be sufficient to run WA’s power needs, and all the Triso (fuel) needed over an 80 year period can be stored on site.

Interestingly, the main argument against nuclear these days is the years it takes to decay (40 years) – but plastic takes 5 times longer!

Last edited 2 months ago by Has Shoes