Australia’s industrial sector faces transformative change to meet global and domestic emission reduction targets. Our current policies are not up to the task. A 21st Century industry policy to deal with a 21st Century problem can underpin Australia’s successful transformation to a world-leading energy superpower. This report presents the case for, and describes, such a policy.

Australia’s industry policy today is a mix of direct grant schemes with poorly articulated objectives and ill-structured scope, and ineffective regulatory policies. Both are routinely open to lobbying by vested interests.

Australia needs an overarching policy framework with consistent, targeted policies linked to clear goals, developed and executed in sustained collaboration with industry. The federal government has a clear economy-wide target for 2030 and 2050. It should set a near-term emissions reduction goal and emissions budget for the industrial sector.