The compact will see the United States grant the Australian company domestic status so that it can benefit from American green subsidies.
With a new compact, Australia and the United States have announced a bilateral commitment to collaborate on legislation to promote the green energy transition in both nations. Under the Climate, Critical Minerals, and Clean Energy Transformation Compact, the two countries will embrace common energy targets and policies.
Australian Prime Minister Anthony Albanese announced at a press conference that President Biden will support Congress taking steps to recognize Australian suppliers and operations as domestic in the United States for the purposes of the Defense Production Act. This effectively allows Australian green enterprises to benefit from subsidies and protections offered to US corporations under the Inflation Reduction Act, which has caused a swath of businesses throughout the world to relocate to the US to take advantage of its benefits.
The compact aims to expedite the growth of green energy supply chains, invest in breakthrough battery technologies, and encourage the development of green hydrogen technologies in Australia and the United States. Australia created a $1.4 billion fund earlier this month to support the advancement of green hydrogen technologies in the country. The newly formed Australia-United States Taskforce on Critical Minerals will collaborate to increase worldwide access to minerals such as lithium, thereby accelerating the global energy transition.