The federal government on Thursday announced a 2035 emissions reduction target of 62-70% below 2005 levels. Importantly, it also released a net zero plan and blueprints for six major economic sectors. The target signals Australia is committed to a net zero economy. The plans will help guide the way in each sector.
Authors
- Anna Skarbek
Climateworks Centre CEO, Monash University
- Anna Malos
Climateworks Centre Country Lead, Australia, Monash University
- Katherine Quinn
Impact Manager, Australian Policy, Climateworks, Monash University
Our work shows Australia has the technologies to meet and exceed its new target. With solutions known and ready, the work now is to ensure they're deployed at scale.
Creating a safer climate needs more real-world action. So what measures are likely to be first off the rank?
1. Accelerating renewables
Renewable energy is crucial for Australia's climate action. It cuts emissions by replacing the fossil fuels in the energy sector, the nation's largest source of carbon pollution. It also helps other sectors decarbonise by, for example, providing clean power to run electric vehicles and industrial processes.
In this vein, the government on Thursday announced a A$2 billion boost for the Clean Energy Finance Corporation - a government entity that invests in renewable energy, energy efficiency and low-emission technologies. This will be especially important for helping industry and transport to access affordable, renewable electricity.
2. Modernising electricity use
Decarbonising energy supplies is important. So too is making shifts in energy demand. This involves changing the way homes and businesses consume electricity and gas - such as by using less, using it at different times, or even generating their own electricity.
For example, smart hot-water systems could reduce pressure on the electricity grid if timed to heat at times of plentiful energy, such as solar energy peaks. Analysis suggests this could also save consumers in Australia about $6.7 billion a year by 2040 .
The government's new electricity and energy sector plan committed to guiding these opportunities through a new demand-side roadmap. It will aim to reduce costs, improve reliability and create financial benefits for investors and consumers. It will be produced by governments and the Australian Energy Market Operator.
3. Improving energy efficiency in homes
The government's sector plan for the built environment will help decarbonise buildings through a range of measures. They include ratings and standards for energy efficient buildings and equipment, and obligations to provide this information when selling or leasing.
The government has also committed $85 million to improve the energy efficiency of homes and buildings.
The next step is ensuring information about these measures is available - and the policies are implemented and enforced. The funding should also be expanded, so all households can become more efficient. Climateworks research shows the right home energy upgrades - such as improvements to insulation and installing double-glazed windows - and appliance electrification can save households up to $2,000 a year.
4. Cleaning up transport
The government's plan for the transport sector emphasises the role of the New Vehicle Efficiency Standard . The standard requires car manufacturers and suppliers to reduce the average emissions of new passenger cars and light commercial vehicles over time.
This will help ensure Australians have access to different types of low- and zero-emissions vehicles. A review of the scheme next year will set targets to 2035. More focus on electrifying freight transport is also needed.
5. Building capacity in exports that matter
Reaching a net zero future requires phasing down fossil fuels. It also requires expanding the extraction and processing of mineral resources needed in a net zero economy - such as lithium, graphite and rare earths for EVs and high-purity silica for solar panels. The government's plan for the resources sector recognises these realities.
Australia is currently highly dependent on imported oil. Some industrial processes can switch from diesel and petrol to electricity or green hydrogen. However, other sectors - such as aviation and heavy freight - will need alternative fuels. The government this week announced $1.1 billion for local production of low-carbon liquid fuels.
6. Promoting cutting-edge new tech
The government has announced a $5 billion Net Zero Fund to help industry cut emissions and become more energy-efficient, and scale up manufacturing in low-emissions technology. This will kickstart new industrial processes and make investments in clean technologies less risky.
A major next step for the industry sector is the planned 2026 review of the Safeguard Mechanism , which limits emissions from Australia's largest industrial facilities. It's vital to ensure the Net Zero Fund and the review complement each other.
7. Using land well
The government's agriculture and land sector plan recognises the need to scale up carbon storage in the land (for example by protecting forests and increasing vegetation). It also noted these actions should help meet Australia's commitments to protecting biodiversity, allow for increased food production and involve First Nations people.
Our research shows land-use planning can be aligned to meet food, climate and nature goals.
Australia can go beyond our 2035 targets
The above list is not exhaustive. As the government's sector plans show, more work will be needed. And participation from across the economy and government is crucial.
The task goes beyond the 2035 targets, to reaching net zero emissions as soon as possible. As Climateworks research shows , Australia's emissions reductions in past decades have exceeded government targets.
It will take sustained and increasing effort to reach net zero. But the prize is worth it: economic gains, global market advantage, and energy and job security. It's an investment in a better future for workers, regions, companies and communities.
Anna Skarbek is on the board of the Net Zero Economy Authority, SEC Victoria, the Centre for New Energy Technologies, the Green Building Council of Australia, and the Asia-Pacific Advisory Board of the Glasgow Financial Alliance on Net Zero. She is CEO of Climateworks Centre which receives funding from philanthropy and project-specific financial support from a range of private and public entities including federal, state and local government and private sector organisations and international and local non-profit organisations. Climateworks Centre is a part of Monash University.
Climateworks Centre receives funding from a range of external sources including philanthropy, governments and businesses. Businesses such as mining companies and industry associations have previously co-funded Climateworks' research on industrial decarbonisation, and may benefit from policies mentioned in this article.
