The Albanese Labor Government will introduce a domestic gas reservation scheme that will require gas exporters supply a proportion of their total production to the Australian market - equivalent to 20 per cent of exports, from 1 July 2027 - ensuring Australians have the affordable gas they need.
The 20 per cent domestic reservation will put strong downward pressure on domestic gas prices, shield our industry and households from global price volatility, and ensure Australia's energy security by avoiding potential gas supply shortfalls.
It is a key plank of our plan to build Australia's energy sovereignty, alongside growing our fuel reserves and supporting more fuels made in Australia to stay in Australia.
Secure and affordable gas is key for our Future Made in Australia agenda, particularly for nationally significant, trade exposed industrial users who can't currently electrify.
Gas has an important role to play in our energy system as we transition towards 82 per cent renewables. Unlike coal, gas power generators can be turned on and off in a couple of minutes - providing the ultimate backstop in our energy grid.
Australia has benefited from the development of a liquefied natural gas (LNG) export industry through export revenue, royalties and taxation, job creation and economic development.
But a decade of policy failures under the former Coalition Government left Australia with supply shortfalls and surging gas prices - an environment that has led to the closure of facilities critical to Australia's sovereign capability.
In 2022, during the global energy crisis that followed Russia's illegal invasion of Ukraine, the Albanese Government acted, quickly recalling Parliament to shield Australians from surging international gas prices, and secured 644 petajoules of extra gas supply - all measures that the Coalition opposed.
Since then, the Albanese Government has continued to strengthen our energy security while remaining a reliable, trustworthy trading partner in our region and delivering overdue energy market reform.
This landmark reform will give gas producers and gas users the certainty they need to invest and enter long-term contracts underpinning domestic manufacturing. That investment leads to jobs and energy security for more Australians.
The domestic reservation will respect export contracts entered into before the Government's announcement on 22 December 2025, ensuring exporters can continue to meet their full export commitments.
Australia is committed to remaining a reliable energy partner to our region.
Australia's gas exports are critically important to the assurances we have received for future supplies of petrol, diesel and fertiliser.
The new Domestic Supply Obligation powers will be jointly administered by the Minister for Resources and the Minister for Energy and Climate Change, in coordination with the Minister for Industry and Innovation.
The Government will legislate the new domestic supply obligation and commence further targeted consultation on the final design details.
Quotes attributable for Minister for Climate Change and Energy, Chris Bowen MP:
"We've been acting to shield Australians from global energy shocks by investing in reliable, sovereign renewables and keeping more of the gas we need onshore.
"Our sensible, practical policies mean we will avoid gas shortfalls and will be able to protect consumers from global energy price spikes."
Quotes attributable for Minister for Resources, Madeleine King MP:
"The domestic gas reservation is a great outcome for Australians, as it will put downward pressure on domestic gas prices and ensure Australia will remain a trusted and reliable supplier of LNG to our export partners.
"The reservation also gives industry the certainty it needs to ensure ongoing investment into Australia's gas industry.
"The outcome follows extensive consultations with the industry and international stakeholders, and means Australians can have confidence that they will be able to access long term and plentiful supplies of affordable gas."
Quotes attributable to Minister for Industry and Innovation and Minister for Science, Tim Ayres:
"A Future Made in Australia is about securing Australia's industrial capability - and secure and affordable gas is critical to strong local manufacturing firms.
"Gas isn't just an energy source for heavy industry - it can also be a feedstock - and putting downwards pressure on price through the reservation is particularly important for those facilities.
"Using Australian gas, for Australian industry - that's central to Australia's economic resilience."
