In a keynote speech to a Committee for Economic Development of Australia, Koutsantois said the “easiest and most economically efficient” path to net zero would be the reintroduction of a carbon tax.

But he blamed the Coalition under Tony Abbott – “a certain opposition leader who then became Prime Minister” – for the current situation.

“It’s going to be a very, very difficult transition because we haven’t chosen the most economically efficient path, and I blame the Canberra bubble, the Canberra politics for that,” he said at Thursday’s forum.

Koutsantonis also said South Australia would have higher standard of living if it processed its own iron ore rather than export it.

“If we decide to continue just to export ores, that’s fine. That’s a good standard loot, but we could have so much more,” he said.

“Japan, Korea and Germany are net importers of ores and their energy, but they have the highest level of complexity and manufacturing base of any country in the world.

“How they could possibly compete against Australia? It doesn’t make sense. We should be wiping the floor with them in terms of cost. And that’s I think the message. We can compete and we should compete.

“There will be a premium for grading steel and there will be a premium for decarbonised minerals, and the question we have to ask ourselves as a state is, do we want to pick that up and make it our own? Do we want to be part of that upscaling, that complexity in our economy? Or do we want to just continue to export ores?”

Koutsantonis said SA would continue to rely on gas, which made up 26 per cent of the state’s energy mix as it transitions to solutions such as hydrogen and grid-scale batteries.

“The thing about hydrogen is that it has other applications as well, which is the most exciting part about what the government is trying to do,” he said.

“What that 26 per cent of gas does is make sure we can have that 47 per cent of wind and 27 per cent solar.

“What we are attempting to do of course is to decarbonise a lot of industries, because the decarbonisation story isn’t just about trying to remove carbon from the atmosphere. It’s also about investment, wealth creation, prosperity and beneficiated products.”

Energy Minister Tom Koutsantonis said SA will need to rely on gas during the transition to net zero. Photo: SA Government/Labor Party

Koutsantonis said that South Australia was ahead of schedule on clean energy targets and would reach 100 per cent net renewables by 2027.

According to the Energy and Mining department, South Australia generates almost 70 per cent of its energy from renewable sources, with a target of 100 per cent net renewable energy by 2030.