Australia's greenhouse gas emissions have dropped, showing signs of a turning point in the country's most polluting sectors.
Emissions are at their lowest point since the COVID pandemic shut down the economy, dropping 2.1 per cent over the year to December 2025, according to the latest national greenhouse gas inventory update.
The significant drop is largely driven by clean energy replacing fossil fuels in electricity generation, but transport emissions also continued to fall, year-on-year, for the second quarter in a row since the pandemic.
That drop doesn't yet account for the surging demand for electric vehicles (EVs) since the start of the year.
The Federal Chamber of Automotive Industries reported EV sales have doubled in the past year, hitting a record high of 20 per cent of new car sales in May.
That figure more than doubles again if you include hybrid and plug-in hybrid electric vehicles, with the share of all electrified vehicle sales hitting 46 per cent.
Australia is projected to fall just shy of its 2030 climate targetand badly miss its 2035 target without significant changes, the climate change minister has revealed.
Delivering an annual climate statement to parliament, Climate Change Minister Chris Bowen said it was normal "for there to be a gap between projected emissions and a target 10 years in the future".
"As new policies are developed and implemented, the emissions outlook improves. That's what a target is for — to drive new initiatives and work," Mr Bowen said.
The Environment Department says Australia is on track to reach a 42 per cent reduction in emissions by the end of this decade, 1 per cent short of the legislated target.
But the department has warned in its annual statement that the country is far further behind on meeting the government's recently decided commitment to cut emissions by 62 to 70 per cent by 2035.
It says on current projections, emissions will fall by just 48 per cent instead.
While the government will fall short of its headline 2030 goal, it is still expected to meet its international obligations for this decade, as it will remain within the cumulative carbon emissions budget set under the Paris Agreement.
Chris Bowen has delivered the annual climate statement from the Climate Change Authority.(ABC News: Matt Roberts)
The United Kingdom's target is 81 per cent by 2035 from 1990 levels.
Professor Frank Jotzo, head of the Centre for Climate and Energy Policy at ANU, is more focused on the policy settings and regulations the Australian Government will need to apply to bring emissions down.
"A target in the 60 per cent range… is not a disappointment in terms of lack of ambition," he said. (re Australia)
"Achieving 65 per cent emission reduction by 2035 would mean halving emissions levels between now, 2025, and 2035.
"So that would be an enormous transformation of aspects of Australia's greenhouse gas-emitting sectors."
Even at 62 per cent, the floor of the newly-announced targets, Australia will need to work much harder because most of our emissions reductions so far have come from changes in the natural world, as opposed to cutting back on fossil fuels.
Between 2005 and March 2025, Australia's emissions decreased by 28 percent.
However, when you remove the land use sector, emissions have only dipped by a small 4 per cent.
How much do Australia's actions matter?
There will also be much conversation about whether Australia can have a tangible impact on the world's progress towards net zero.
Australia accounts for around 1 per cent of global emissions, but is also one of the world's top fossil fuel exporters. When those emissions are quantified, it rises to 4 per cent.
Prime Minister Anthony Albanese and Climate Change Minister Chris Bowen hand down a 2035 target more ambitious than Australia's Canadian or New Zealand allies, but below the United Kingdom's, which is one of the most ambitious in the world.
The next major climate commitment, one of the most significant decisions Labor will make this term, will strike a middle path between like-minded nations.
It is expected to be committed in a meeting of cabinet today, before being taken to New York next week, where other world leaders will also gather to confirm their 2035 targets at a meeting of the United Nations General Assembly.
The commitment follows the release of the first National Climate Risk Assessment on Monday.
In the year to March this year 2025, Australia's emissions totalled 440 million tonnes — 28 per cent less than in 2005.
On the current trajectory, emissions will be about 36 per cent lower than 2005 by 2030, 43 per cent lower by 2035, and 86 per cent lower by 2050 (not 100 per cent as legislated).
At the risk of over-simplifying and pre-empting the CCA's sophisticated, detailed modelling: 65 per cent or less means no carbon tax, 75 per cent or more means carbon tax.
And second, many farmers are very unhappy about new transmission lines and wind turbines going on or near their land, which are needed because wind and solar farms are not going where the old coal-fired power stations are.
The approval for the Woodside project is conditional on the North West Shelf operations becoming net zero by 2050, which will mean a huge extra demand for carbon offsets, or Australian Carbon Credit Units.
In fact, if the government announces an ambitious 2035 target this week while maintaining and expanding the nation's fossil fuel infrastructure, the only way there will be enough offsets to achieve it will be if there's also a carbon tax to pay for them.
Economist Ross Garnaut and public policy expert Rod Sims, founders of renewable energy think tank The Superpower Institute, have suggested that a carbon tax be applied to exports as well as domestic use, but Friday's approval of the Woodside project makes it clear that won't happen.
As for the full electrification of the electricity grid needed to achieve net zero by 2050, it will likely either have to be done despite protesting farmers, or through the near-universal adoption of household and business rooftop solar with batteries … or with nuclear power.
Energy Minister Chris Bowen says Australia is "by and large" on track to hit its 2030 emissions goal but concedes the need to "do more", leaving the door open to a carbon tariff on cement and other products pending an expert review.
Mr Bowen said the newly approved North West Shelf expansion would not jeopardise emissions goals because the site was covered by the safeguard mechanism and legally required to ratchet down its own emissions toward net zero.
What's next?
The government will soon decide its 2035 target, subject to the advice of the independent Climate Change Authority, and is bidding to host the next global climate conference.
Mr Bowen said Australia was "by and large on track" to meet its legislated target of reducing emissions by 43 per cent by 2030, despite new figures this week showing flatlining progress in 2024.
Labor approved a 40-year expanded licence to Australia's largest oil and gas project, Western Australia's North West Shelf, in a move criticised by environmental groups.
Mr Bowen said the decision by Environment Minister Murray Watt was made according to the "very strict criteria of the environmental approvals legislation", which does not allow consideration of emissions impacts and which Labor has so far failed to reform.
The Australian government's decision to increase gas mining in WA for the next 45 years did not consider cultural and environmental impact, global warming and climate change.
"Suddenly, a project which is now allowed to go ahead until 2070, it's going to ring alarm bells in a very, very, very big way."
Some weeks more than others, climate change really bears down on Australians.
This week, the news carried images of eerie orange skies as dust storms whipped across landscapes dried from record-breaking droughts. Further north, homes were submerged in floods exacerbated by heavier rain from a warmer climate.
At least not under Australia's current laws, where the climate harm from fossil fuel projects doesn't have to be considered.
How can Australia approve a fossil fuel mega-project that will run until 20 years after the world is meant to reach net zero emissions?
"I think the average punter out there is basically saying, 'Hang on, this is about climate change and 2070, what are we doing? What in the hell are we doing?'" lamented Greg Bourne from the Climate Council.
The North West Shelf is already Australia's third-highest emitting facility in the country, producing about 6 million tonnes of greenhouse gas each year.
That's just the direct emissions from extracting and processing the gas and doesn't count emissions after the gas is sold, shipped, and burnt at its final destination.
Some estimates put the total lifetime emissions from this project at the equivalent of a decade of Australia's current emissions.
A decade. Think of it as pushing out Australia's climate goals by another 10 years.
It's not just climate experts warning that the world needs to stop expanding fossil fuels: the International Energy Agency says there is enough existing coal, oil, and gas projects to supply the world and stay the course to net zero.
"The world is awash in gas, primarily coming out from the Middle East, but lots coming out from America and so on like that. I think our Australian companies fool themselves into thinking that they're going to be the last company standing, pushing gas out there,"
"Climate change is one of the most significant challenges facing the global community and one of the greatest threats to Australia's way of life.
"It is time to act. It is time for procrastination to end … We cannot any longer afford to be complacent on this issue."
