Submission – Productivity Commission Consultation on Investing in Cheaper, Cleaner Energy and the NetZero Transformation
In September 2025, Green Energy Statecraft submitted the following to the Australian Government’s Productivity Submission.
We welcome the opportunity to contribute to the Consultation on Investing in Cheaper, Cleaner Energy and the Net Zero Transformation.
We submit that bold, forward-thinking policies will be needed to truly create the conditions under which Australia can become not only more competitive, but a more innovation-driven economy capable of sustained prosperity in an era of rapid global and technological change.
We are the Green Energy Statecraft Project, a policy innovation and research initiative committed to advancing the strategic, institutional, and policy foundations required to accelerate the clean energy transition while building enduring sovereign capabilities in Australia and beyond. Our team is comprised of policy scholars, practitioners, and industry experts, working to bridge applied research with actionable policy design that delivers environmental, economic, and geo-strategic value.
Australia’s productivity growth has stalled, despite years of incremental reforms and world-class research institutions. To reverse this trend, we believe Australia now needs a potent blend of pragmatic improvements to current policy settings alongside new, ambitious concepts for productivity reform.
The proposal in this submission belongs to the latter category: the establishment of a Clean Commodities Trading Initiative (CCTI) to help kickstart Australia’s Clean Commodities Industries like green iron and sustainable aviation fuel and maximise the innovation- and productivity-related gains for the nation.
By establishing Australia as an early mover in clean commodity production, the CCTI would create opportunities for the development of specialised equipment manufacturing, engineering services, and other high-value activities in the clean commodity supply chain. These knowledge-intensive industries offer precisely the kind of high-productivity, high-wage jobs that are central to Australia’s economic future.
The CCTI’s approach to performance incentives further enhances its economic impact. By building incentives for continuous improvement into offtake pricing, the CCTI would drive producers to innovate, making these industries long-term research and development powerhouses. This focus on innovation aligns perfectly with the government’s ambition to boost productivity and stimulate private sector research and development.
What is the CCTI?
The Clean Commodities Trading Initiative (CCTI) is designed to address one of the biggest obstacles preventing large, first of their kind clean commodity projects like green iron from actually happening in Australia: a lack of guaranteed demand for innovative green products at a bankable price.
Without the certainty of guaranteed demand at a bankable price, project proponents and their financiers lack the confidence they need to make a final investment decision. This has led to the current situation – where we have a lot of talk about the ‘potential’ of green iron in Australia but no actual projects – or related innovation gains.
The CCTI offers a straightforward and relatively low risk solution to this problem. It proposes that government entities enter into offtake contracts to support the early-stage production of new clean commodities such as green pig iron, sustainable aviation fuel (SAF), and green ammonia.
By stimulating demand, the CCTI fills the gap that current policy instruments like production tax credits (PTCs) cannot for early mover projects. It is also designed for the Australian and regional environment, recognising we cannot ‘outspend’ trading partners such as China, the EU or US.
The CCTI would enable Australia to move quickly, but also more responsibly and effectively. Specifically, it would allow us to:
Provide the appropriate level of support for targeted early mover projects so construction and production can start as soon as possible;
Accelerate the innovation and learning associated with these major projects which will reduce future costs and help kickstart more new projects;
Ensure that taxpayer dollars are not going just one way; the CCTI is about sharing the financial upsides of these early clean commodity projects wherever possible, to benefit all Australians.
In this submission we explain the current challenges; why CCTI can breakthrough the early project stalemate; and how the initiative can be designed to mitigate potential risks to the Government.