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Can Kevin Rudd revive the green manufacturing dream?

Australia’s ailing car manufacturing industry will receive a A$200m funding boost. And all cars in Commonwealth fleets will have to be Australian-made. The policy was announced today by Kim Carr, Minister…

If cars aren’t the way to go in manufacturing, maybe we should look to green technology. Flickr/Michael Caven

Australia’s ailing car manufacturing industry will receive a A$200m funding boost. And all cars in Commonwealth fleets will have to be Australian-made.

The policy was announced today by Kim Carr, Minister for Innovation, Industry, Science and Research.

Australia’s manufacturing industry is in trouble. But are cars really the way to go?

Cars contribute 14% to Australia’s greenhouse gas emissions. Green cars and green technology might be a way to clean up the manufacturing industry and help reach our emissions reduction target.

But green manufacturing policy has struggled to achieve anything in the past. So what can we learn?

A failed attempt

Just hours after retaking the Labor leadership, Kevin Rudd reaffirmed his commitment to Australian manufacturing:

I never want to be prime minister of a country that doesn’t make things any more. There’s a big future for Australian manufacturing under this government.

In Rudd’s first term as prime minister the industry’s “big future” was tied to green technology. The most significant attempt at this green manufacturing policy was the New Car Plan for a Greener Future, presented as a great step forward and unleashing a decade of green revolution.

Ford, General Motors Holden and Toyota received 80% of the funding between them. Unfortunately handing over this money failed to stimulate the promised innovation, shown by average CO2 emissions from Australian-made vehicles. In 2010 Australian vehicles emitted 247 grams of CO2 per kilometre. The widely accepted standard for a green car is 120 grams CO2 per kilometres. By this definition, no car currently manufactured in Australia qualifies as a green vehicle.

The employment outcomes were even more dismal. The industry lost 13,000 jobs over the last five years.

The failures of Rudd’s first attempt to secure the future of the Australian automotive industry via green innovation highlight the challenges of green car manufacturing in Australia.

The Australian government and the three Australian subsidiaries of General Motors, Ford and Toyota have little capacity to effect significant change within the local industry. Instead the creation of a green Australian automotive industry is primarily in the hands of the global parent companies.

Unfortunately as the Australian automotive industry is a relatively minuscule player, producing just 0.003% of cars globally in 2012, there is little incentive for these parent companies to invest in Australian manufacturing. This also limits the bargaining power of the Australian government and the local subsidiaries as they compete internally against other larger and cheaper manufacturing plants.

Ford’s decision to cease manufacturing in Australia in 2016 is set to further diminish Australia’s position in the global automotive industry.

A big future?

There are two directions the Rudd government could take to respond to the challenges facing the Australian automotive industry.

The first of these is to establish Australia as a niche green vehicle industry. Future government assistance could be dedicated to ensuring that highly efficient cars are produced at the cutting edge of global automotive production.

However, the economic realities of the global industry are likely to put the brakes such a plan. Car manufacturing has shifted to low-cost countries such as Thailand and Indonesia. Unless the global parent companies receive substantial ongoing government assistance it’s doubtful they will maintain their operations in Australia.

This assistance would have to be largely on their terms, and would be unlikely to include rigorous environmental improvements.

The other direction the Federal government could take would be to accept that the days of car manufacturing in Australia are numbered. Instead, the government could offer substantial financial incentives to the industry. This could take the form of an industrial package for a green transition.

While there are challenges for such a proposal, there are also possibilities. For a smooth transition the need to involve workers, communities, business and government in planning and developing a green industry.

Those currently working in the local car industry could adapt their skills for green technologies for transport, mining, or even renewable energy.

The recent changes to the car benefits tax may accelerate the end of automotive manufacturing in Australia as it has the potential to further reduce the sales of locally produced vehicles. But lack of consultation with the industry and quick implementation do not make for a smooth or fair transition.

There could be a big future for Australian manufacturing, but it won’t be secured by handing out large amounts of money. There’s an opportunity for a fresh approach to green manufacturing.

Kevin Rudd must work closely with the automotive industry to ensure that the skills and expertise of its workers are not wasted.

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12 Comments sorted by

  1. James Hill

    Industrial Designer

    Overseas there are several diesel powered cars which qualify as "green" according to those CO2 emissions figures, and which are argued to be just as good as electric vehicles, when the use of fossil fuels to produce the electricity is taken into account.
    Secondary Bio-diesel refers to a process utilising waste cellulosic plant material, where 2kg of old newspapers are said to yields 1 litre of bio-diesel.
    Please note that this is waste material not food stocks.
    A cursory surfing of the web reveals this information.
    So efficient small diesel vehicles rival and exceed the efficiency of electric vehicles, though some will regard this with disbelief, and when secondary processes allow the diesel to be synthesised, sustainably from plant waste, then what is stopping Australian industry from producing both the vehicles and the fuel?

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    1. David Arthur

      resistance gnome

      In reply to James Hill

      "... just as good as electric vehicles, when the use of fossil fuels to produce the electricity is taken into account."

      Hopefully, fossil-derived electricity will be phased out over the next couple of decades, as will fossil-derived transport fuels.

      What is stopping Australian industry producing vehicles and fuels? Perhaps overseas ownership of major corporations in vehicle and fuel industries is stifling innovation in their Australian branch operations?

      It may be unfashionable to suggest that globalisation is not the panacea that the IPA would have us believe, but Australian innovation can best be facilitated by government partnership with Australian-owned companies.

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    2. Gerard Dean

      Managing Director

      In reply to James Hill

      Mr Hill

      You are correct that some of the new, high technology turbo charged diesel engines use less energy than the much touted hybrid cars such as the Toyota Pious, sorry Prius.

      Where you leave the world that I live in, the real world, is in believing that there is enough waste material. Firstly, converting organic material such as waste wood, paper, cooking oil and algae into liquid fuels is horrifically complex and expensive. It is far more difficult than extracting energy out of food such as corn, sugar cane or wheat.

      Even if it became practical, there just isn't enough of the material to supply the gargantuan amount of energy we use in Australia every day. A case in point was the dream that used cooking oil could be refined into jet fuel - an nice idea - until it was realised that one A380 aircraft would use all of Victoria's recycled cooking oil just to taxi to the end of the Tullamarine runway.

      Gerard Dean

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    3. James Hill

      Industrial Designer

      In reply to Gerard Dean

      Now, now, Mr Dean, in that other real world the fact that UCG and GTL produces fuel at a reported cost of 30c/l casts serious doubts upon your assertions regarding the difficulty and expense of synthesising fuel from waste.
      Take a few moments for the reality to sink in, please.
      Using the same modular technology as used in Chinchilla Qld by Linc Energy to produce syngas from waste instead of coal would probably replicate the results of German researchers who report two kilograms of old news papers producing one litre of bio-diesel or avgas, if you wish.
      Enough there, for profits down the line and fuel excise, at a retail price of $1.60/l for imported petro-diesel?
      So you will forgive me Mr Dean, if this reality is found to be preferable to yours?
      Thanks for the reply.

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  2. Bart Brighenti

    Farmer

    It is just shameful that All government cars were not Australian made in the past. Its a no brainer but we have free trade lemmings running Canberra.
    I also heard that Nick Xenaphon (IND) and John Madigan (DLP) have ordered and paid themselves for Australian made crockery for parliament house rather then keep eating off imported plates.
    I was at parliament house and they were selling imported juices in the eating areas, Maybe Rudd should also make sure that he supports Australian producers as well.

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  3. ops two048

    logged in via email @incybr.com.au

    I applaud this article for daring to suggest that perhaps we should stop throwing away endless amounts of .au dollars subsidizing the profits of foreign predators. I am appalled by the lickspittle lack of comment that has greeted this outrageous ideation.

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  4. Gerard Dean

    Managing Director

    The author's view that the Australian car industry is in its death throes is not far off the mark, however his opinion that converting over to green manufacturing is a mirage.

    Australian manufacturing is on the ropes for several reasons; lowering of protective tariffs against low cost suppliers, poor export focus especially if the manufacturer is foreign owned and perhaps mos importantly, obliteration by the Chinese government/manufacturing/commerce conglomeration. This last group have destroyed…

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  5. Harry McNally

    logged in via email @decisions-and-designs.com.au

    James Hill talks about small efficient turbo diesels and future bio-diesel and I had a similar choice in mind for my next car. But I've reconsidered because, while that will be necessary for people who regularly travel long distances, my urban use of a vehicle would be easily done with an all-electric car. I can hire a car for holiday or country business trips. I should leave bio-fuel supplies accessible for the people that will rely on them.

    Like David Arthur, I think we can (and will) move…

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    1. James Hill

      Industrial Designer

      In reply to Harry McNally

      There were "electric trucks" with batteries, and with motors in each wheel pre WWI.
      So a century later it shouldn't be too hard to produce electric vehicles.

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  6. Geoff Upton

    Secretary

    If my memory serves me correctly Toyota's Hybrid Camry was a product of Rudd's New Car Plan For a Greener Future.
    A car which has excellent reviews both here and overseas.
    Whilst it is not a volume seller, it has increased market penetration for hybrids and potentially could be the sort of niche product we put resources into.
    It is a pity GM and Ford couldn't have been more innovative instead continuing to make cars nobody wants.

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  7. Bart Brighenti

    Farmer

    What is it with this theory that we cant use food stocks, have a look around, farmers are walking off the land, productive land with all its infrastructure abandoned, trees getting pulled out and fruit dumped to the ground and all this replaced by cheap, low standard, subsidised food that should have been used to feed poor people in these countries, instead multinationals pillage poor countries to mislabel it and sell it at western prices.
    At least if food production continued to be grown here for green energy even with subsidies, we wouldn't be losing the production base as we are now ,and when a number of people die as they will from tainted food imported here and it becomes favourable for politicians to actually do something, we will still have the people , experience and want to produce food for people. it may also just fill the void as we wait for better green technology.

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