Fossil fuels could be wound back without massive layoffs: report

As Chinese state media appeared to confirm a ban on Australian coal, the Australia Institute's Centre for Future Work has found Australia could phase out coal, oil and gas industries without mass layoffs.

Around 133,000 people were employed in fossil-fuel jobs in 2019 - around 1 per cent of Australia's total jobs.

Approximately 50,000 of those jobs are in the coal industry.

But Centre for Future Work director Dr Jim Stanford said their analysis - commissioned by health and community services superannuation fund HESTA - showed the government could manage the transition by investing in incentives for early retirement and regional diversification over a 20-year period.

He said it would be "shockingly inexpensive" for Australia to support the small number of communities that relied on these jobs.

"Twenty years would be ambitious, and doable," Dr Stanford said.

"You've got a situation where you have to facilitate the replacement of 1 per cent of total employment. So you're adjusting it by one-20th of 1 per cent a year. You're looking at 6500 jobs per year.

"And because you're dealing with a 20-year period, and you're dealing with a workforce that is already relatively old if you do it right most of those workers can just retire. Or they can undertake other voluntary changes. [It] absolutely can be done without a single involuntary redundancy."

This was true even in regional areas that were the most heavily dependent on fossil fuel industries.

The centre identified only 11 areas across Australia where fossil fuel industries combined accounted for over 5 per cent of total employment.

Around one-quarter of fossil fuel jobs are located in these towns, which include Biloela, Rockhampton, Lithgow, the Lower and Upper Hunter, Maitland and the West Pilbara.

Dr Stanford said it would be just as accurate to describe those 11 communities as "healthcare-dependent" regions, as to call them fossil-fuel dependent.

"Even in most of those fossil-fuel regions, there's more people who work in healthcare than work in fossil fuel. So, you know, I've often said, we should call Central Queensland or the Hunter Valley healthcare-dependent regions not fossil-fuel dependent regions, because there's more work in health care than there is fossil fuel," Dr Stanford said.

"But there's many other sectors, construction, manufacturing, education, professional and scientific industries, that's the most rapidly growing sector in Australia is professional and scientific services. And many fossil-fuel workers, especially those who perform office based functions, like geologists, and technicians, will absolutely be able to transition into that growing sector."

However Dr Stanford said it was vital these transitions started sooner rather than later.

"Time is the best friend of employment transitions. The further in advance, you can announce what's happening, and allow employers, workers and industries to prepare for the better they can do that. And the more you delay and deny what's happening, the more you've set the stage for a chaotic breakdown," he said.

"The evidence is overwhelming and coming from everywhere, including China's announcement [this week] that Australia's economy will never be driven by fossil fuel industries again in the future, for economic and environmental and geopolitical reasons, these industries are going to phase out regardless of what the government thinks about climate policies. So if you actually want to help fossil-fuel workers, and the communities that depend on them, you have to move quickly to plan a transition."

It comes as Chinese state-owned tabloid The Global Times appeared to confirm Beijing had blocked imports of Australian thermal coal, after months of speculation.

Australia exported around $13 billion in coal to China last year.

But reports emerged last month that dozens of ships carrying Australian coal had been stranded at sea since September waiting to offload at China's ports.

Prime Minister Scott Morrison told reporters in Tasmania the reports had not yet been "clarified" by the Chinese government.

"So, until we are in a position to have that clarified, then we can only treat these as media speculation in the Chinese state-owned media," Mr Morrison said.

"That said, what is important to note here is that if that were the case, then that would obviously be in breach of [World Trade Organisation] rules. It would be obviously in breach of our on free trade agreement and so we would hope that is certainly not the case."

Trade Minister Simon Birmingham said while China was a "significant" market for Australian coal, it was not the largest.

However Senator Birmingham suggested there would be environmental impacts from China's decision.

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"Australian coal is around 1.5-times more efficient in terms of energy production than most other competitor nations, including Chinese domestic coal," Senator Birmingham said.

"That means that to get the same level of energy generation, China will end up having to use more coal from other sources and generate more emissions from those sources, which will do anything but help China in terms of meet some of the commitments it has made to the world around missions reduction as well.

"So, these actions, if true, would potentially constitute discriminatory action against Australian producers, potentially constitute a breach of the type of undertakings that China has made to Australia to the world in relation to their trade practices and potentially harm China's ability to meet the promises it has given to the world in terms of its emissions profile."