Australia is working to meet ambitious emissions reduction targets by 2030, but increasing barriers to foreign investment are making that goal harder to reach. Experts warn that current government policies may deter international investors, creating pressure on the country’s clean energy progress just five years before key climate benchmarks.
Foreign capital plays a significant part in Australia’s climate strategy towards net zero by 2050. However, investment appears to be slowing. Since 2022, the federal government’s Foreign Investment Review Board (FIRB) has raised application fees considerably, with the upper limit now around $1 million. While this has brought in $455 million in budget revenue, the higher costs and added bureaucracy are causing concern among potential investors. This comes at a time when rapid development of infrastructure like solar farms, wind turbines and battery storage systems is essential to achieve a 43% reduction in emissions compared to 2005 levels.
For global investment funds, these higher costs and complex approval requirements signal that Australia may be an increasingly difficult and costly place to invest. Legal and financial experts report that investors may need to submit up to four different applications for a single clean energy project with no certainty of approval. Delays and a lack of clarity could threaten projects already underway, putting 2030 climate goals at risk.
Adding to the challenge, proposed tax changes would expand capital gains tax obligations for foreign investors who back clean energy assets such as solar panels and transmission lines. Industry representatives say this move clashes with international best practices like those in the United States, where tax relief is commonly used to encourage green energy investment.
The clean energy sector is also calling for broader policy changes, including an innovation visa designed to attract skilled investors and entrepreneurs to high-growth industries such as renewables and technology. Supporters believe these measures could help deliver up to $800 million in productivity benefits to the Australian economy.
With more than 70% of clean energy investment coming from overseas, experts warn that making foreign investment more difficult could slow Australia’s emissions reduction efforts and cause the country to lag behind other advanced economies competing to grow green energy sectors.
