This report finds that regional Australia is undergoing an economic transformation, with historical coal and gas heartlands like Central Queensland, The Hunter Valley and the Latrobe Valley in pole position to capitalise on the global shift to net zero emissions – with appropriate Federal Government leadership, investment and support.

Between February 2021 and March 2022, The Next Economy engaged with 505 people across Queensland, New South Wales, Victoria, Western Australia and the Northern Territory to assess the types of support regions with close ties to the fossil fuel industry need to diversify their economies and manage the transition to net zero emissions. Participants included representatives of all levels of government, the energy sector, a range of different industries, environment organisations, unions, economic development agencies, social services, universities and training institutions, Traditional Owners and First Nations representatives, and community members.

This report provides a summary of what people across regions with close ties to fossil fuels around Australia are saying they need to better manage change as fossil fuel use declines and renewable energy generation ramps up.

Despite the high degree of diversity represented by those engaged by The Next Economy in terms of geographic reach, sectors represented and political views, there was a surprisingly high level of consensus across all groups with regards to five key themes that emerged across the engagement activities:

1. The expansion of renewable energy and decarbonisation of Australia’s economy offers an historic opportunity to create a wide range of new industries and jobs in renewable energy generation, storage and transmission; critical minerals mining and processing; renewable energy component manufacturing; batteries; biofuels; and food and fibre processing. These industries are well suited to regional areas. We need more open and inclusive ways to bring people together so that they can move beyond politics to understand the range of economic opportunities on offer.
2. It is not enough to just focus on attracting investment to develop new renewable energy powered industries. Additional planning, regulation and investment is needed to manage the eventual decline of fossil fuel use which is impacting both the domestic energy sector as well as the international demand for Australian thermal and metallurgical coal exports.
3. The lack of government leadership and policy certainty at a national level is making it difficult for investment to flow and for new industries to develop. Even industry leaders are now calling for the Federal Government to develop the national targets, policy settings and regulations needed to de-risk investment and ensure development outcomes are positive and lasting.
4. Managing the decarbonisation of the entire economy (not just the energy sector) necessitates a more proactive, iterative, regionally led and inclusive approach to planning and coordination, one that is led by independent and well-resourced transition authorities with the power to coordinate change across all levels of government and across different sectors.
5. While there is already an abundance of investment opportunities across regional Australia and plenty of international finance available to invest in efforts to decarbonise the economy, we need more creative, diverse and responsive financial mechanisms to be able to meet the needs of regional communities in a meaningful and timely way.