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Media release: Natural gas & the manufacturing crisis - industry identifies shovel-ready remedies

1 August 2022

The Australian Alliance for Energy Productivity (A2EP) has consulted with its members and industry to identify more than 5PJ of natural gas savings that can be achieved in the next 12 months and a further 20 PJ that can be achieved within three years to bolster the Victorian Gas Substitution Roadmap. A2EP is a not-for-profit organisation that represents a wide range of stakeholders in the commercial and industrial sectors.

While the recently released Roadmap is a welcome contribution, its recommendations focus mainly on residential gas consumers.

Together with our members and partners, A2EP has identified business sector actions that will reduce gas consumption to address the enormous financial pressures that result from rising energy prices. These shovel-ready measures can lower costs to operate, sustain firms and jobs and keep manufacturing onshore.

The impact of high gas prices, particularly in Victoria, has already put pressure on a number of manufacturing businesses, including Kagome and Flickers, with Advance Bricks shutting down citing unviable gas prices. Australia’s manufacturing capacity is being irreversibly diminished and crucial manufacturing jobs are being lost.

Part of the significant savings we have identified come from energy efficiency and part from fuel switching to electrification. Our modelling shows that the increased electricity demand can be shifted to periods of high renewable electricity production and/or low grid utilisation, thereby avoiding increased peak load on transmission and distribution networks.

We have identified five high priority technologies to achieve these reductions in Victoria. All are available off-the-shelf and shovel-ready. All are ‘no regrets’ investments. All result in commercial and emissions benefits with an extra plus: improved energy productivity. All of these technologies are expected to generate local content greater than 50% and stimulate jobs across manufacturing, contracting, consulting and trades.

With ongoing price and supply pressures facing commercial and industrial gas users in Victoria, our industry members see opportunities - opportunities to do more to reduce gas dependency, support businesses and help decarbonise. We call for supplementary strategies from the state and federal governments that can assist Victorian business and contribute to climate response.

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**CORRECTION - a previous version of this release, distributed on 29 July 2022, implied that two businesses, Kagome and Flickers, were closing down as a result of energy price pressures. This is incorrect and we sincerely apologise to these companies.**


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