A sustainability focus is vital for manufacturing’s future
Energy is a vital resource for the manufacturing sector, and with electricity and gas becoming more expensive and harder to access in Australia, the pressure is on to find a solution.
“Energy costs are one of the key input costs in manufacturing. The more expensive and unstable our energy system, the more difficult it is to make the economic case for building new manufacturing plants, or making necessary re-investment in existing plants,” said Mark Chellew, Chairman of Manufacturing Australia, in a statement.
It’s important that manufacturing businesses and the Australian government work together to manage energy costs and ensure that the necessary energy continues to be available in the future.
Energy costs are a major problem for the manufacturing sector
Expensive and unstable energy is placing a significant burden on Australian manufacturing businesses, and could prevent the industry as a whole from extracting maximum value. According to Ben Eade, Manufacturing Australia’s Executive Director, the past decade has seen Australia’s electricity prices double, despite a notable decrease in its reliability. He argues that government has been a major contributor to the current energy challenges, and it needs to intervene and revisit policies on both electricity and gas.
“Australia has lots of gas. We should be able to have the best of both worlds: gas for manufacturing and gas for export. But unless State Governments intervene in their State’s interest, where successive federal governments did not, we will instead see manufacturers go to the wall because they cannot secure gas at competitive prices,” he said.
Manufacturing businesses must partner with the government to ensure energy will be accessible in the long term.
Manufacturers are part of the solution
Yet its not just the government that has the power to incite change. Mr Eade argues that large energy users such as manufacturers will also play a key role in solving the problem.
“We can help to underwrite investments in new supply and support new producers into the market. But to do that the policy settings need to be right, ensuring local users see the benefit of increased production,” he explained.
This will not only allow manufacturing business to gain easier access to the energy resources they need, but can deliver significant economic benefits as well.
“Whenever we introduce energy efficiency – whenever we maintain responsible workplace practice with regards to keeping our teams happy and healthy – at the end of the day that always has an economic upside,” said Kendall Waller, National Product and Technical Manager of Australia manufacturer Premium Floors.
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