More heavy industry may opt to curtail their operations in Western Australia unless more is done to help them decarbonise, a peak body has warned.
Key points:
- The CEO of Kwinana's Industrial Council is flagging a move away from fossil fuels
- Kwinana contributes $15 billion to the state's economy each year
- It's hoped workers losing their jobs will be hired by regional employers
The concerns follow Alcoa's decision to halt production at its Kwinana alumina refinery, with the loss of more than 1,000 jobs expected by the end of 2025.
"Industry in Kwinana is heading inexorably towards a decarbonised profile," Kwinana Industries Council chief executive Chris Oughton said.
"What that means is that the current scenarios where fossil fuels are powering industry need to change."
There are already clear signs of that transition in BP's Kwinana Energy Hub, where the company is seeking to transition its former oil refinery site into a facility that produces renewable fuels.
But Mr Oughton said not all companies would respond in the same way, with others likely to follow Alcoa's route.
He said federal and state governments needed to better facilitate the transition to net zero in the Kwinana industrial precinct, which pumps an estimated $15 billion into the state's economy annually.
In November, the WA government introduced a bill that would legislate its commitment to net zero emissions by 2050.
The bill also lays the groundwork for an interim emission reduction target for 2030.
"Industry currently in Kwinana uses 1.6 gigawatts of electricity to keep it running, [and] most of that is brown, which is based on coal-fired electricity," Mr Oughton said.
"That number has to change if we're going to meet the 2030 targets, from 1.6 gigawatts to 8 to 9 gigawatts, and that's got to be green electricity.
"That is a massive task."
Billions in economic output
Bankwest Curtin Economics Centre (BCEC) has found the broader Peel region supports around 44,360 jobs, with an estimated annual economic output of $23.3 billion.
Of this, Kwinana contributes $14.9 billion overall in economic value to the WA economy and provides employment for 18,400 workers.
That figure includes the roughly 800 direct employees of Alcoa, of whom all but 50 are projected to lose their jobs over the next two years.
Kwinana Mayor Peter Feasey said there could be a localised economic impact if those workers left the area, but he expected many would be hired by other regional employers.
"With that number of employees that are living in Kwinana, Cockburn and Rockingham that are spending their money in our local shops and local businesses, certainly there will be an impact at some stage," he said.
"[But] the state's currently experiencing some significant growth, and certainly within the Kwinana Industrial area, we've got some diversification of that economy."
Mr Feasey pointed to the AUKUS deal, which would see Henderson become home to nuclear-powered submarines, and the planned construction of a new industrial port in the Cockburn Sound as generating future jobs in the region.
Flow-on effects in other areas
Alcoa has conceded the closure of the Kwinana refinery may have flow-on effects to other parts of the business.
"Bauxite production at Huntly mine, which feeds both the Kwinana and Pinjarra refineries, will be reduced when Kwinana alumina production ceases," an Alcoa spokeswoman said.
The company has previously said its Wagerup and Pinjarra refineries were not expected to be affected.
But Waroona Shire president Mike Walmsley said he was well aware Alcoa's Wagerup refinery — which has been operating in the area for almost four decades — also has an expiry date.
In fact, the shire council has been planning for it by diversifying the use of land around the refinery and considering how the site could be repurposed.
"There are other industries on the horizon, and if Alcoa's not using that refinery for bauxite, there are other potential things that refinery could be used for," Mr Walmsley said.
"The shire's currently being inundated with renewable energy areas — solar, potentially wind. Also, a green hydrogen plant's been slated."
But he said he was far from rushing that transition.
"If it was to close in the immediate future, I think the effects would be quite huge. Alcoa do employ a lot of locals, especially up at the mine site."
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