Welcome to TIQ's December Strategic Insights Update. This monthly newsletter highlights global macroeconomic, geopolitical, trade and investment insights and their relevance to Queensland. For more information, contact us.
Key global insights
Toyota will trial a hydrogen-powered van as part of a pilot on Australian roads. It comes as an AFRIntelligence report outlines Australia’s natural hydrogen advantages amidst growing global demand, highlighting the opportunities to develop Queensland’s hydrogen industry (see the Queensland Hydrogen Industry Strategy).
The relative scarcity of lithium and the reliance on refining in China (which refines approximately 60% of the world’s lithium), is driving research and development on alternatives to lithium-ion batteries. The Queensland Government has invested $24 million in zinc-bromine and iron flow batteries, while there are also opportunities for commercial development of sodium ion and vanadium (of which there are deposits in Queensland) batteries.
HSBC Australia has allocated USD $150m to a new venture fund which allows venture-capital backed start-ups (primarily in the tech sector) access to USD $10-30m loans without having to give up equity or set a valuation. The fund could accelerate growth of start-ups looking to commercialise quantum science research and development in line with the Queensland Quantum and Advanced Technologies strategy.
Enviva, the leading producer of wood pellets for power generation, and major supplier of pellets for energy production in the EU, UK, Japan and South Korea, reported USD $85.2m losses in Q3. The company’s future is uncertain; with winter approaching in the northern hemisphere, Enviva markets could be looking for alternative energy sources.
After years of deflation and low inflation and stagnant wage growth, Japan is seeing its fastest price growth in more than 30 years and fastest wage growth since the 1990s. While global supply shocks have sparked most of the uplift, structural and generational shifts are contributing to Japan’s emergence from decades of low-growth. Growing consumer spending could increase Japanese appetite for Queensland goods and consumer products.
The Clean Energy Council says that 2023 is set to be the worst for large-scale renewable investment since reporting began in 2017. With investment lagging, the Federal Government will underwrite risk of investment in 32 GW of renewable energy and clean dispatchable capacity. The decision is set to drive growth by providing certainty for investors in renewable energy and storage.
Africa will be the second-fastest-growing major region in 2024, just behind Asia (Source: EIU). The strongest growth is set to come from East Africa (Ethiopia, Kenya, Uganda, Rwanda, Tanzania and the DRC). For FY22/23, Queensland’s top three exports to Africa were sorghum ($43.6m), wheat ($13.3m), zinc ($3.8m).
Water shortages in the Panama Canal, brought on by severe drought, are decreasing ship throughput (registration required), with some larger vessels having to reduce total container volume by up to 40%. This is particularly impacting grain vessels - thin margins mean they unable to pay auction prices for available slots.
Sustainable Aviation Fuel Update
+ SAF is not produced at commercial-scale in Australia, but Queensland is well-placed to lead.
+ The state is home to significant SAF feedstock such as tallow, biomass and agricultural residues.
+ The Queensland Government, Qantas and Airbus are supporting a Jet Zero biorefinery feasibility study.
+ The Queensland Government has also signed an MoU with Qantas to further develop the local SAF industry.
+ The UN’s COP28 climate conference in Dubai has concluded with a historic agreement to ‘transition away’ from fossil fuels to enable the world to reach net zero by 2050.
+ The landmark agreement also calls on nations to triple renewable energy capacity, and to double energy efficiency by 2030, and to adopt 'economy-wide emissions targets’.
+ COP28 recognises the role of finance as an enabler of climate action, with collaboration between governments, financial institutions and investors key to achieving climate objectives.
Have You Seen?
The Australian Government’s newly released 2023-2030 Australian Cyber Security Strategy
China Eastern will operate seasonal services between Shanghai and Cairns during February 2024, re-establishing connectivity with China and presenting trade and tourism opportunities
The Economist’s ten trends to watch in 2024 (registration required)
McKinsey’s sector net zero transition tracker
Austrade's weekly economic update - subscribe here
Last published: 11:10 AM, Thursday, 14 December 2023