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Australia continues to back gas while on road to net zero in Future Strategy report
22/5/2024
The Australian government has acknowledged the role of gas as a ‘transition’ fuel ‘out to 2050 and beyond’ in its new gas strategy. However, the strategy has been criticised by some environmental organisations for continuing to support a fossil fuel whose emissions contribute to climate change. Meanwhile, the government’s latest budget offers financial support for renewables and hydrogen.
Gas will continue to play ‘a critical role’ in Australia’s economy in the future, ‘underpinning jobs, investments and economic growth’, according to the Australian government, which has published its Future Gas Strategy featuring the six principles it will use to ‘guide policymaking about gas to support the transition to net zero by 2050’.
The Strategy’s objectives are to support decarbonisation of the Australian economy, safeguard energy security and affordability, entrench Australia’s reputation as an attractive trade and investment destination, and help Australia’s trade partners on their own paths to net zero.
It aims to support the six decarbonisation plans that will set out pathways for Australia’s industry sectors to transition to net zero. These plans are being developed under the government’s Net Zero Plan, which is expected to be released by April 2025.
However, environmental organisations have criticised the government’s continued support for the gas sector, arguing that its emissions contribute to climate change and the focus should instead be on renewables, energy storage, energy efficiency improvements and other low-carbon solutions.
Meanwhile, the government’s recently announced 2024–2025 Budget includes an A$22.7bn ($15bn) green manufacturing support package that aims to make the country a ‘renewable energy superpower’. The Future Made in Australia package introduces a number of tax incentives to support the renewables and hydrogen sectors, including a $6.7bn renewable hydrogen production tax incentive of $2/kg beginning 2027–2028, $1.7bn to promote net zero innovation in areas such as ‘green metals and low-carbon fuels’, $1.5bn to support battery storage and solar panel supply chains, and a $7bn production tax incentive for the processing and refining of critical minerals.
The government is also looking to ‘strengthen and streamline approvals’ through ‘smarter use of data, better decision-making processes and appropriate resourcing'.
Commenting on what is claimed to be ‘the biggest clean energy Budget in Australia’s history’, the Australian Clean Energy Council’s Chief Executive Kane Thornton says: ‘This is a budget that puts renewable energy at the centre of our economic future. [It] is doubling down on clean energy, which will deliver lower electricity prices, thousands of jobs in the clean economy and will set Australia up to fulfil its potential as a clean energy superpower.’
He continues: ‘The support for green hydrogen is another massive step for our nascent green hydrogen industry. This will help Australia stay in the global race to produce green hydrogen and low-carbon liquid fuels and deliver on the enormous global demand for clean energy, fuels and green metals.’
He adds that the Budget ‘recognises renewables firmed by storage as the way to replace old coal and expensive gas, delivering the cleanest, cheapest form of energy for Australia’s future’.
‘The Clean Energy Council has long advocated for a response to the US Inflation Reduction Act and this Budget delivers on that,’ he concludes.
