Australia's emissions have fallen by 9.7 million tonnes over the past year, with more renewable energy, cleaner cars and practical emissions reduction in industry helping drive the decline.
The latest Quarterly Update of Australia's National Greenhouse Gas Inventory shows emissions for the year to December 2025 were 2.1 per cent lower than the previous year, with lower coal, gas and petrol use cutting electricity emissions by 3.8 per cent and transport emissions by 0.6 per cent.
This is the second consecutive annual fall in emissions for transport pollution outside of COVID, suggesting Australia's overall transport emissions may have peaked as more motorists choose cleaner, cheaper to run vehicles.
Minister for Climate Change and Energy Chris Bowen said this was a positive trend.
"EVs have grown from less than 4 per cent of new light vehicle sales in 2022 to more than 20 per cent in the first four months of 2026. Our New Vehicle Efficiency Standard is making sure Australians get more choice of efficient vehicles that save money at the bowser and cut emissions."
Meanwhile more renewables and battery storage are changing the grid for the better. In 2025, battery discharge in the National Electricity Market (NEM) almost tripled compared to 2024, reducing expensive gas-powered generation during evening peaks by 30 per cent.
Alongside record-breaking wind generation and strong large-scale solar generation, the battery boost pushed gas generation to its lowest quarterly level since 2000, resulting in the cleanest NEM Australia has ever seen with 0.44 tonnes of emissions per megawatt hour, and NEM emissions 32 per cent lower than 2005 levels.
Minister Bowen said the results showed the practical benefits of building Australia's cleaner, cheaper and more reliable energy system.
"The latest quarterly update is further proof that what's better for the planet is better for your pocket; more of the cheapest form of new energy, more storage to back it up, and lower emissions as a result," Minister Bowen said.
"With over 4 million household solar systems and more than 400,000 home batteries supported by our Cheaper Home Batteries Program, we're seeing the results of consistent and considerable cuts in electricity grid emissions."
The results come as the Coalition has promised to scrap Australia's emissions reduction targets, pause the cheapest new energy coming into the grid, and rely more on ageing unreliable coal.
Falling emissions across transport, electricity and stationary energy were partially offset by increased emissions from industrial processes and product use, mainly due to increased steel production.
The Albanese Government's reformed Safeguard Mechanism is also delivering real reductions from Australia's largest industrial facilities. Net emissions from Safeguard facilities fell 5.5 per cent over the year and are now more than 12 per cent lower than when reforms began.
Facilities are installing new technology to cut potent nitrous oxide emissions, using electrification and deploying carbon capture and storage where it can reduce industrial emissions. Some of these projects have reduced nitrous oxide emissions from their facilities by 95% or more.
Australia's overall emissions in the year to December 2025 are estimated to be 24.5% below 2005 levels, reflecting the incorporation of updated Land Use, Land Use Change and Forestry sector estimates from the National Inventory Report 2024 released earlier this year.
Land sector emissions are subject to ongoing variability, reflecting both improvements in measurements and the impact of extreme weather events such as La Niña. The National Inventory Report 2024 data reflected updated measurements for previous years as data becomes more precise but also confirmed the downwards trend in emissions overall.
Australia is making steady progress in emissions reduction, backed by practical policies including the Capacity Investment Scheme to boost cleaner, cheaper renewable energy and the reformed Safeguard Mechanism and New Vehicle Efficiency Standard to cut emissions.
The quarterly update of Australia's emissions is available at https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-quarterly-update-december-2025
