According to The Australian Financial Review, Australia powers Japan, literally, supplying more than one-third of its energy needs. For decades, Japanese investment in energy projects and Japan’s energy purchases have helped build Australian prosperity. But that’s been in fossil fuels and the bilateral economic relationship will need a total transformation as both countries pursue transition to net zero emissions by 2050.
Australia has work to do in improving its investment environment, not just for Japanese companies. Australia has become a net capital exporter in recent years after consistently being a net importer of capital because domestic savings were insufficient to fund growth. Australia needs foreign capital to help build the infrastructure needed for population growth, domestic energy needs and to become a green energy exporter. The new complementarity in Australia-Japan energy trade won’t be realised through market forces alone because of the large-scale national investment in infrastructure needed in both countries. An elevation of leadership, investment in both capital and human networks by government and industry from both countries and close co-operation is needed to transform the energy relationship. Anything short of that is likely to frustrate the energy transition and see the withering of energy as a pillar of the bilateral economic relationship. The energy relationship between Australia and Japan has to be entirely re-thought. Instead of Australia shipping raw energy to Japan, it is becoming cheaper and cleaner to produce intermediate inputs, processing more minerals in Australia, and exporting the embodied energy to Japan and beyond. https://www.afr.com/companies/energy/why-australia-needs-a-new-energy-partnership-with-japan-20240319-p5fdh0
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