Australia is making strides towards increasing its climate and clean energy ambitions, with the International Energy Agency (IEA) recommending that the country continues to strengthen its policies and long-term plans to ensure it meets its targets. The IEA review finds that Australia can make sufficient progress on emissions reductions by 2030 to align with the goal of net zero by 2050. However, stronger efforts are needed to improve energy efficiency and boost clean energy investment.
Australia's success in clean energy transition would support the country's economic diversification and industrial growth while providing long-term resilience against global energy market shocks, according to the new IEA report. The country is a major exporter of both fossil fuels and critical minerals used in many clean energy technologies.
Since the IEA's last review in 2018, Australia has passed the Climate Change Act in 2022, which doubles the target for emissions reductions by 2030 and sets the goal of reaching net zero emissions by 2050. The Australian government also signed up to the Global Methane Pledge in 2022, joining 130 governments who are collectively targeting a reduction in methane emissions of at least 30% by 2030.
The Australian government has presented a host of policy strategies to fast-track the country's energy transition, including the Rewiring the Nation Plan, the National Energy Transformation Partnership, and National Energy Performance Strategy. The IEA review welcomes these strategies.
IEA Executive Director Fatih Birol said, “Australia is an important player in global energy markets that is helping to meet today's needs while advancing the transition to clean energy. Our new report sets out the steps Australia can take to accelerate its own clean energy transition securely and affordably.”
Australia has yet to complete a comprehensive assessment of climate change impacts on the energy sector outside of electricity. The energy sector – from production and generation to transport and distribution – will need to be more resilient to better cope with ever more disruptive storms, flooding, wildfires, and heat waves. A national-level energy sector plan that lays out future steps for climate resilience is needed.
Australia also has the potential to play a key role in providing critical minerals and new technologies for clean energy transitions globally. It produces cobalt, rare-earth elements, and lithium, of which it is the single largest producer. In 2022, Australia's Hydrogen Energy Supply Chain (HESC) project produced and transported liquified hydrogen to Japan, the world's first such shipment. Australia has a broad range of demonstration projects for low-emission hydrogen and carbon capture and storage development, which are also critical for the decarbonisation of industrial sectors where emissions are hardest to reduce.
With the 2022 Climate Change Act doubling the target for emissions reductions by 2030 and setting the goal of reaching net zero emissions by 2050, Australia is seeking to update its existing strategies, starting with the preparation of a new emissions reduction plan for 2050. In this report, the IEA provides energy policy recommendations to help Australia effectively manage the transformation of its energy sector in line with its goals.
