Australia and the USA have committed to enhancing bilateral cooperation under a Climate, Critical Minerals and Clean Energy Transformation Compact, establishing a climate and clean energy as a central pillar of the Australia-United States Alliance. 

Despite the considerable geographic distance between the two economies, Australia and the USA make for ideal partners on critical materials. The former is an established mining giant, with ambitious plans to grow its critical minerals sector, expand downstream processing and help meet future global demand.  The latter is the world’s biggest economy and is seeking to build a new clean energy economy through a combination of grants, loans, rebates, incentives, and investments.

A White House statement notes that the Compact is a framework designed to coordinate policies and investments to support the expansion and diversification of responsible clean energy and critical minerals supply chains, accelerate the development of markets for established and emerging technologies, meet the growing energy and adaptation needs of the Indo-Pacific, and enhance the region’s role as a driver of resilient and sustainable global prosperity.

Under the Compact, Australia and the USA intend to:

·      Accelerate the expansion and diversification of end-to-end clean energy supply chains.

·      Promote responsible, sustainable, and stable supply of critical minerals. 

·      Drive the development of emerging battery technologies.

·      Support the development of emerging markets for clean hydrogen and its derivatives.

To achieve these objectives, the White House statement mentions additional industry engagement, more collaboration on projects and standards, the promotion of robust emissions and accounting methodologies and continued assessment of clean energy job projections. 

The coming months will see both parties work to agree on key actions. The relevant departments and agencies from both countries intend to coordinate the implementation of respective clean energy supply chain strategies and develop a new action plan by the end of 2023 to encourage stronger industrial collaboration and accelerate progress towards climate goals.

Australia and the United States are also establishing a ministerial-level Australia-United States Taskforce on Critical Minerals, to be led by principals from the U.S. National Security Council and Australia’s Department of Industry, Science and Resources, with engagement from key stakeholders.