New report on the sector’s energy and investment needs
16 July 2025
The AFGC is proud to publish a new report assessing the energy and investment needs of the Australian FMCG manufacturing sector through to 2030.
A collaboration with Oxford Economics, the report documents the sector’s energy challenges. As the third-largest industrial energy user in the country, FMCG manufacturers face rising and volatile energy prices, potential shortfalls of natural gas, and concerns around the continued stability of the electricity grid.
Gas is a particularly salient challenge for the sector. Around 40 per cent of the sector’s energy comes from gas, which remains irreplaceable for certain high heat manufacturing processes.
According to Oxford Economics’ modelling:
- The sector’s energy use could rise by 35 per cent to 220 petajoules by 2030 as the industry aims to grow turnover to $250 billion
- Up to $13.7 billion in investment could be required by 2030 to facilitate the sector’s energy transition
The sector also faces significant challenges attracting the investment required to achieve its 2030 growth goals. Along with the considerable investment required for the energy transition, the sector also needs investment to improve productivity and drive growth.
Oxford Economics’ modelling indicates that the sector’s growth capital investment needs are likely to total $38.1 billion between FY24 and FY30, focused on three main areas:
- Growth and new product capacity
- Automation and efficiency
- Business as usual capital
This is in addition to the potential $13.7 billion in energy transition investment, and represents a considerable increase to the $26 billion invested in the sector over the previous seven years to FY24.
Overall, Oxford Economics’ assessment identified four potential incentive schemes to promote investment in the sector:
- Grants to fund specific projects
- Capital allowance tax incentives to bring forward depreciation expenses
- Targeted tax incentives to provide tax offsets for specific areas of expenditure
- Operating cost reductions to reduce specific business expenditures
The AFGC’s advocacy for the sector needs is strengthened when reputable organisations such as Oxford Economics provide fact-based reports to reinforce our work. The support provided by AFGC working groups on this project, as well as the stewardship of the Oxford Economics team, has delivered a sensible, structured and collaborative path forward for government and industry.
If you have any questions or feedback on the report, please contact rick.umback@afgc.org.au.
Scott McGrath
Director – Government and Media Relations
