Natural gas critical to developing advanced manufacturing in Victoria, says PACIA

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Ms Samantha Read, the CEO of Australia’s Plastics and Chemicals Industries Association (PACIA), has called on the Victorian Government to ensure that any further inquiry into the State’s gas industry be swift and efficient.

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The reaction from PACIA – Australia’s pre-eminent national body representing the $40 billion chemistry industry – comes after the Government indicated that there would be a further review into Victoria’s gas industry.

“We are pleased that the Government is committed to taking a science-based approach. Victoria is Australia’s manufacturing heartland. It depends on a reliable supply of domestic natural gas. We need to be developing the next generation of Victorian manufacturing jobs without delay,” Ms Read said.

“There is significant opportunity for an advanced manufacturing sector, enabled by Australian gas and chemistry, to meet unprecedented global and domestic growth. These are exactly the types of opportunities that will drive a new phase of development in Victoria. But this won’t happen without the certainty required for investment.”

Ms Read also highlighted that Australia’s chemical industry is the nation’s second largest manufacturing sector employing more than 60,000 workers nationally, including more than 20,000 in Victoria.

She said the industry is unique in using natural gas not only as a clean source of energy, but also as an essential and non-substitutable feedstock for chemicals and plastics manufacturing.

“The Australian chemistry industry contributes significant value-add to 10% of all Australian domestic gas, using it as an essential ingredient in the chemistry required to make a whole range of critical products, such as fertiliser and silage wrap for our crops; innovative packaging to keep our food fresher for longer; and cleaning products for maintaining health and hygiene in our homes and hospitals,” Ms Read added.

“A recent report by Deloitte Access Economics reveals the potential for severe side effects resulting from gas supply tightness and cost increases. The Report projects $118 billion in lost output by 2021 to the Australian manufacturing sector alone, based on the current gas price projections and other factors.”

Ms Read also warned of serious consequences throughout Victoria’s core industries if the country doesn’t realise its “energy advantage”.

“Domestic gas supply is a national issue that requires coordinated leadership from State, Territory and Federal Governments. We look forward to continuing to work with all jurisdictions to address the urgent challenges in gas market transformation,” Ms Read said.